Hungary plans to "restrict" activities of international retailers

By bne IntelliNews May 19, 2016

The Hungarian government is looking for solutions that would allow it to "restrict" the participation of multinational companies in the retail sector without provoking the ire of the EU, the head of the Prime Minister’s Office told journalists on May 19.

Although Lazar Janos did not revealed details of the plan, the announcement suggests yet another threat for international retailers. Hungary’s ruling Fidesz party has a long track record of putting pressure on international investors, especially in the retail sector, as well as banking, telecoms and energy.

“The government is now examining what legitimate solutions exist in the European Union” to restrict the participation of multinational companies in the retail sector, said Lazar, according to Index.hu. He added that there are “many examples” of multinationals’ activities being restricted for “consumer protection reasons."

The government is trying to find ways to “support those, who work with Hungarian base materials”, said Lazar, but failed to clarify to which market participants he was referring. He noted that agricultural production has recently failed to boost GDP growth.

The government could seek to support the country's agriculture sector with a well-organized mass catering service, he said. “However, unless the Hungarian processing industry comes together with a strong retail sector, we cannot really help,” he explained.

Lazar’s announcement comes a month after the government decided to abolish the Sunday shopping ban in the country. Many claimed that the ban was part of a campaign to curb the large international retailers that dominate grocery sales in Hungary to the benefit of local groups, many of which - such as Coop - are said to be close to Fidesz. An attempt last year to introduce a progressive tax on retailers - which also targetted large international groups such as Tesco and Spar - was scuppered by Brussels.

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