Hungary to ban Sunday shopping at large (foreign-owned) retailers

By bne IntelliNews December 2, 2014

bne IntelliNews -

 

Hungary's parliament is set to discuss on December 3 a bill banning large retailers from operating on Sundays, a senior official from the ruling Fidesz party told media on December 1.

The Hungarian government is ready to support the proposal from junior coalition partner the Christian Democratic People’s Party (KDNP) to ban shops from opening on Sundays, said Antal Rogan, who heads Fidesz' parliamentary caucus. The ban is a "first step" to making sure that no one works on Sundays, according to MTI. 

Under the proposed bill, only shops where the owner or a member of his family works will be allowed to open, the official explained. The original proposal was for the ban not to be applied on stores of up to 400 square metres. However, that prompted complaint of discrimination. 

Many see Fidesz's policies in  sectors such as retail, banking and utilities as dictated by the interests of domestic players. Critics accuse the party of close connections to domestic retailers, including CBA, Coop and Real, which run many smaller stores. It is little coincidence that the trio have gone against the sector's resistance to the proposed clampdown on Sunday shopping. CBA chief Laszlo Baldauf has been forced in the past to deny speculation that he is a major source of funding for Fidesz. 

Thick skinned

Critics of the Fidesz government have long accused it of hammering international retailers, such as Tesco, Spar and Auchan, which have been hit by high taxes and other legislation since it came to office in 2010.  

On November 18, a bill was introduced that will mean chains with an annual turnover of more than HUF50bn (€163mn) will be forced to close if they fail to report a profit over two successive years.

The government claims large chains have been deliberately running at a loss in recent years, using dumping prices to increase market share. While the big international retailers can afford the losses, the tactic is driving smaller local retailers into the ground, according to the bill.

The same day, lawmakers approved a significant hike to a supervision fee for food retail chains, which will raise costs on the sector hugely. However, the ownership structure of the local chains means they will duck the legislation. Analysts at Portfolio.hu suggested the bill could  "blow Spar and Auchan out of the water". 

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