After restricting tobacco retailing to national tobacco shops the Hungarian government plans to make alcoholic beverages available only in licensed stores, weekly Figyelő reported on Thursday, citing its own information.
A country of 1 million alcoholics
Following the tobacco market “we have reached a point in alcoholic beverages trade where alcohol will be available only at vendors that have a special license to sell," Figyelő said.
The number of alcoholics in Hungary could grow from the current 800,000 to one million within a few years, warned toxicologist Gábor Zacher earlier this month. He said 30,000 people die from drinking-related illnesses annually and there are about 2.5 million (!) heavy drinkers in the country, which means nearly every family is affected.
Alcoholism does not depend on how much you drink, but on how strong a habit drinking has become, he told public television M1 on 3 January.
Figyelő raised the subject in an overview which discusses the key events that may form the local scene by the 2018 elections, including potential sources of domestic and foreign conflicts, in an attempt to predict whether calm or tense times await Hungary.
Imposing restrictions on the market of alcoholic beverages will most likely trigger skirmishes within the governing party for positions so it may generate new conflicts there, the paper said.
Figyelő also highlighted that according to the website of the Parliament, the cabinet plans to amend the excise tax law this spring (it may be passed by June), therefore
it would not be surprising if this package included details of the relevant legislation on a new sales monopoly.
One of the subheadings of the story reads “booze monopoly is on its way".
According to Figyelő, the cabinet will interfere with market economy processes on the market of alcoholic beverages too, after creating national tobacco shops. This is not the first time the implementation of this measure comes up. It was raised back in 2014 and last year, as well.
Booze biz buzz is back again
In September 2014, business daily Napi Gazdaság learned that the concept of monopolizing alcohol selling was already finalized and the government started consultations with the affected market players.
To Portfolio’s inquiry, the Government Information Centre denied the validity of the report, saying "The government has not addressed the issue of alcoholic beverages; no proposal has been made and it is not on the agenda of the government."
A week later, weekly HVG also reported, citing its own sources, that the question about national liquor stores was not whether the government would create them or not, but which alcoholic beverages should be affected.
The unnamed sources told the weekly that as the wine lobby proved successful enough, the government would monopolise the retail selling only of spirits, i.e. allow it only to hand-picked stores. This way beer and wine could be purchased elsewhere too, not only in national liquor stores, which would be created the way National Tobacco Stores were.
Look for interesting coincidences
Figyelő recommends keeping an eye out for any new investors that have recently made or will make an appearance on the market of liquor production.
The paper does not mention any specifics in this regard, but hvg.hu reported last week that three companies, CBA-Baldauf Ltd., Lázár-Holding Ltd. and Alfa Investment Ltd., owned by Fidesz supporters, are launching a liquor factory. AlcoWorld will have a HUF 20 million registered capital and the majority owner will be Alfa, while the two other companies will hold 19.99% each. The head of the company is Alfa’s Aleksandr Glus who was born in the Soviet Union (in the town of Gorodok, now in Ukraine) but who has residence in Hungary too.
Alfa is owned by Glus and was founded last autumn, shortly before the founding of AlcoWorld became official. Lázár-Holding is the real estate and asset management company of the Lázár brothers, the owners of retail chain CBA and CBA-Baldauf Ltd. is an interest of the Baldauf family, also the owners of CBA.
HVG said the establishment of AlcoWorld has to do with the fate of Ukraine’s Nemiroff vodka, an interest of the Glus family.
If there were no exceptions, the new legislation would once again deliver a blow to retail chains that deal almost exclusively in alcohol selling (liquor retailers and wholesalers, small liquor stores, wineries, etc.), but it could take its toll also on the turnover of food retailer chains. Strict monopoly on alcohol selling to consumers is in place in several countries all around the world. In Sweden, for instance, Systembolaget, a government owned chain of liquor stores, has such monopoly status, except for restaurant and bars, where alcohol can be sold for immediate consumption (bottles must be opened and cannot be brought home).
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