Hungary’s government mulls action against big brewers

Hungary’s government mulls action against big brewers
By Levente Szilagyi in Budapest September 11, 2017

The Hungarian government is reportedly ready to submit a bill to ban Heineken’s use of a five-pointed red star on its logo to the parliament. The cabinet is also mulling new measures to curb the dominance of multinational beer makers in Hungary.

The campaign against multinational beer companies would fall in line with the government's aggressive stance towards companies or sectors seen as strategic areas of the economy. The new session in parliament could also see the revival of legislation targeting retailers.

“The legal barriers now have been cleared and it is up to the Fidesz caucus whether the bill will be submitted to parliament,” government commissioner for trade policy Kristof Szatmary told pro-government Magyar Idok daily. The bill had previously been shelved for several months. 

The European Commission has revealed in a statement that it has no objection to a Hungarian regulation to ban the commercial use of symbols that could refer to or remind people of oppression by totalitarian regimes, such as the former communist regimes in Central Europe.

The government offensive against Heineken began in March, when the Dutch brewer got into a trademark dispute in Romania with a small ethnic-Hungarian rival. Csiki brewery, which is owned by ethnic Hungarians in Romania, was forced to change its name due to its similarity to Heineken's Ciuc brand that is sold in the country.

The government campaign was launched as a counter measure to protect the ethnic Hungarian brewery, Janos Lazar, chief of the Hungarian prime minister’s office, confirmed in March at a weekly press conference. The Dutch brewer eventually agreed to drop its objection to the use of the Csiki brand name, but that did not stop the government from submitting the bill, referred to in the media as "lex Heineken".

The bill proposes punishing the commercial use of “symbols of tyranny” by up to two years in prison and maximum fines of HUF2bn (€6.5mn), although legal analysts have said it is uncertain whether it would meet constitutional standards. An earlier law banning the public display of the red star in Hungary was struck down by the Constitutional Court and later by the European Court of Human Rights.

The government is also planning to come up with a set of proposals to curb the dominance of multinational brewers, said Szatmary. Big companies impede the access to markets of small Hungarian-owned craft breweries, he said, citing a finding of the competition office from 2015, which found that three multinational breweries dominate some 90% of the market and impede competition from smaller rivals with restrictive agreements to gain market share in that sector. The GVH called on the companies to drop the volume they sell under exclusive contracts with hotels, restaurants and other catering outlets.