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bne September 2018 Companies & Markets I 11
already cancelled a contract with Magyar Sportmarka, which raises questions about the viability of the company’s plans.
At present, 20-30% of the materials used are locally made, but that ratio is expected to double within two years, and the goal is to reach 90% in three years, the CEO added.
Keeping production in Hungary may not be the most cost- efficient way of operation, industry sources say. Local garment producers outsource much of their work abroad. Among neighbouring countries, Ukraine is the obvious choice, but
it is still much cheaper to have goods produced in China or Vietnam than in Hungary, due to labour costs.
It is unusual for sports clubs to switch suppliers in such a hasty manner, pointed out some analysts, who suspect that the deals struck by Magyar Sportmarka and the clubs were not solely inspired by business considerations but were rather based on political motivations.
There is no logic in replacing the products of a well-known inter- national company with decades of research and experience with that of an unknown small company, with no track record, one Hungarian sports economist wrote on social media. In his view, the emergence of 2Rule is just another example of the corruption engulfing Hungarian football, ruled by political aspirations.
Taxpayers pay for Orban's passion
Orban is an avid football fan and has built a stadium next to his house in Felcsut, his home village, and has begun a large- scale stadium construction programme. Over the past eight years, the government has spent hundreds of billions of forint on upgrading or building new stadiums, even in small towns with only a second or third division team.
In 2011, parliament approved legislation to allow companies to sponsor sports clubs directly through tax deductions, commonly known as the TAO-scheme.
In the past eight years, the budget’s shortfall from the TAO- scheme reached HUF500bn. Not surprisingly, the football
“Orban is an avid football fan and built a stadium next to his house”
academy operating in Felcsut has been a major beneficiary of the programme, receiving tens of billions of forints of corporate money.
Despite the flashy stadiums popping up in small towns, and the generous state subsidies, football fans do not have much to celebrate as Hungary is placed 51st on the FIFA rankings and its top clubs rarely go through the second or third rounds in international championships.
The maker of the 2Rule brand has received some marketing support from state news television, which broadcast the company's press briefing live when the products were showcased last week, a rather unusual gesture in favour of a privately run business. State television may have breached ethical and legal rules, experts say.
Despite all the publicity, the 2Rule brand got off to a shaky start as all the first division clubs wearing their shirts were defeated in the first matches of the season.
Austria’s Oesterreichische Kontrollbank to facilitate trade with Iran despite US sanctions
bne IntelliNews
Austria’s Oesterreichische Kontrollbank (OeKB) is prepared to defy US sanctions and facilitate trade between Austrian companies and Iranian counterparts, the chairman of the Vienna Chamber of Economics has
said according to a July 25 press release put out by the vice president of the Iranian Chamber of Commerce, Industries, Mines and Agriculture (ICCIMA).
The move would fly in the face of US sanctions due to take effect
in August as part of the Trump administration’s plan to put Iran in an economic stranglehold to force concessions on its role in the Middle East. But as a relatively small market player that offers credit facilities to small and medium sized enterprises, OeKB may not be substantially exposed to the American finan- cial system or market and thus might not suffer sanctions.
ICCIMA vice president Pedram Soltani is touring the European Union, following up on opportunities for Iran to escape the US
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