Hungarian gov't sends tough message to Spar in response to Austrian chain's accusations
Spar has recently argued in several forums that the Hungarian government had discriminated against foreign-owned retail chains in Hungary by imposing a special retail tax. It also blamed the price freeze on several foodstuffs for is losses.
The retail chain also said that a person close to the Prime Minister had planned to acquire a stake in their Hungarian operation, and the cabinet had indicated that this would ease the windfall tax on them. Hans Reisch, CEO of Spar's Austrian parent company, also claimed that the Hungarian government's measures were not just discriminatory but also failed to serve the interests of consumers.
Spar submits that the measures in question are clearly incompatible with EU law as they violate, in particular (. . .) the free movement of goods and the freedom of establishment and the charter of fundamental rights,
according to a complaint submitted by Spar to the EU in early March.
According to the complaint, a copy of which was seen by the Financial Times, the government’s intervention has increased Spar’s costs by about € 90 million, leaving its business there with a loss of almost € 50 million in 2023. Spar is the second-biggest foreign retailer in Hungary by turnover.
The Ministry of National Economy responded in a statement on Monday, firmly rejecting these accusations and stressing that all government measures serve to protect Hungarian families and the utility bills reduction scheme.
It was explained that 'extra profit' taxes were introduced in different sectors where companies generated extraordinary income. These revenues support the Overheads Protection Fund, which aims to alleviate the financial burden on families. The Ministry of National Economy has stressed that the Court of Justice of the European Union has approved the windfall tax on retail trade, so all other claims are unfounded.
According to the ministry, the government's aim was to curb food inflation, and the measures are said to have been successful. The government also blames Spar for not agreeing to these measures, which they say is against the interests of Hungarian consumers.
According to the Ministry of National Economy, it is not the measures that are behind Spar's accusations, but the company's own economic problems. They say the chain is inefficient and operates at higher costs than its competitors.
Rather than taking steps to strengthen its efficiency and competitiveness, and engage in price competition on the market, it is spreading unfounded falsehoods in desperation,
the ministry said in a statement.
The Hungarian government says that only companies that respect consumers' interests and offer good quality products at affordable prices to Hungarian families should remain in the market.
Spar has also lodged a complaint with the European Commission against the Hungarian government's practices, which they call discriminatory and restrictive of competition, and the case is expected to continue. Last summer, the EU executive also criticised the retail levy in its country report.
Cover photo: László Róka
