Page 4 - bneMag February 2021_20210202

4 I Companies & Markets bne February 2021
Former cabinet chief Janos Lazar openly calls for protectionist measures against foreign retailers at a conference on December 4.
Hungarian official threatens to wage war on foreign retailers
Tamas Szilagyi in Budapest
Multinational retailers in Hungary may be bracing for a tough period after former Prime Minister’s Office leader Janos Lazar argued that Hungary should pursue an openly protectionist policy to crowd out multinational retailers. Hungary has already reintroduced a progressive sectoral tax hitting larger companies, while sparing local retailers operating with franchise models.
Agriculture is one sector of the economy that has not benefited from regime change or accession to the European Union, Lazar said at an online agricultural conference organised by the Portolio business website on December 4.
Despite funding coming from the EU during the last two seven- year budgets, agriculture is lagging behind. "We are a country that exports raw materials and imports finished products," said Lazar.
The next EU budget cycle is Hungary's last chance to be a self- sufficient country with a strong food industry, he argued. Over
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the next 7+2 years, thousands of billions of forints will have to be made available for agriculture, he added. Hungary should follow the examples of Poland and Slovakia, which have a higher share of processed food made locally.
Lazar said that it would be in the national interest of Hungary to dominate this market.
In numbers this would mean boosting the share of the Hungarian-owned processing industry and domestically produced food consumption to 80% each, leading to an 80% share in contribution of the sector by local producers.
Foreign retailers under pressure
Earlier this year, the Court of Justice of the European Union (CJEU) ruled that Hungary’s progressive sectoral tax on retailers in Hungary is compatible with European Union rules. A few weeks later Hungary’s parliament approved a turnover- based tax for companies. The tax exemption applies only for annual revenue of HUF500mn (€1.38mn), or less.