Economy 4 December 2014, 12:17pm

Hungary EcoMin changes stance on Sunday shopping ban proposal

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Hungary’s Parliament started a debate on the Sunday shopping ban late on Wednesday. A state secretary at the Economy Ministry revealed for the first time that the cabinet is backing the proposal submitted by the Christian Democrats (KDNP), the small ally of the ruling Fidesz party. This means the government and the ministry have decided to support the idea of keeping stores closed on Sundays and holidays just when an increasing number of professional organisations are objecting to the proposal.

While the Economy Ministry is preparing for the fourth round of talks with professional trade bodies after the third round on Wednesday, the government has just decided to give its backing to the proposal that would have all stores - with a few exceptions - closed on Sundays.

András Tállai, parliamentary state secretary at the Economy Ministry, told his fellow lawmakers the following on Wednesday night:

the whole issue is about a clash of interests
economic interest will not be damaged
consumption will not decrease just because the goods cannot be obtained on any of the seven days of the week
consumer habits will be different as a result of the measure which could even increase competition between retailers
the state does not expect that the measure will lead to lower budget revenues
the government is not concerned that the measure will lead to layoffs, arguing that they will need just as many employees because
purchasing power will remain unchanged. Shopping opportunities will be restricted only in time, whereas the quality of goods and services will be the same
there will certainly be people who will resent that they cannot go shopping in larger stores on Sunday, but this is not a real conflict of interest
the Hungarian economy is strong enough to concentrate on human and employer aspects, and in view of these interests the cabinet stands behind the proposal.

Quite a U-turn

Let’s see what thoughts were provoked in the Fidesz party by a bill submitted by the KDNP in 2010-2011 on work-free Sundays. Then Prime Minister Viktor Orbán’s Fidesz party did not back the notion, citing an alleged study by the Economy Ministry that found tens of thousands of jobs would be put on the line by the measure.

An impact study made by the Economy Ministry uncovered competitiveness issues, as well, partly because there is no ban in the European Union on Sunday work. So if Hungary forced stores to leave their doors closed on Sunday, certain economic players would be placed a competitive disadvantage, Fidesz argued then.

As regards the current proposal, we believe, it is totally wrong to expect competition to be strengthened by the shopping ban. The impact would be quite the contrary, in fact. By allowing a select group of stores to be open on Sundays the cabinet would restrict competition. We would not call it competition boosting, either, that the remaining stores will have to deal with more consumers on the remaining six days. There is a better word to describe that situation: congestion. Or crowd. Take your pick. Stance rethought

The state secretary’s remarks suggest that the ministry is now on a different standpoint on the issue than even a few weeks ago. Economy Minister Mihály Varga first said about the proposal that when every fifth people take care of shopping on Sundays, it is unwise to implement restrictions such as this.
On 6 November he said the cabinet had not made up its mind about the matter yet, whereas PM Orbán already backed the proposal.

Meanwhile, consultations with the profession were in progress, helmed by Béla Glattfelder, state secretary in charge of economic regulations at the Economy Ministry.

We still do not know what modifications will be made to the original proposal, but in view of what Fidesz caucus chief Antal Rogán said on Monday, it looks likely that the 400 square metre threshold will either be eliminated or changed.

The original proposal of the KDNP was to ban stores with a shopping area of over 400 square metres from opening on Sundays and holidays. Rogán’s remarks, however, suggest that this limitation would be scrapped from the draft and every store, except family businesses, would need to be closed on the last day of the week.

It is possible that an exemption from the rule will be granted not on the basis of store sizes but in relation to ownership. But there were reports about lowering the upper limit of either the shopping or gross area of the stores to 200 or 150 square metres. The ministry’s comment about the seeking of a compromise solution likely refers to this subject.