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Foreign-owned retail chains received another war message from the government, and government commissioner János Lázár would drive them out of the Hungarian market. How much? Boltmatek of boxing.
The retail card has reappeared in government, at least as indicated by the fact that Government Commissioner János Lázár essentially declared war on foreign retail chains at Friday’s Agricultural Sector conference. The politician said in a newspaper report that the government’s future plans include displacing foreign retail chains, for which an openly protectionist policy will be followed. We have to be offensive in this, because there have to be Hungarian national retailers, said János Lázár. According to him, this market should be dominated by Hungary for its own benefit.
Questions
It is not yet clear what steps the government is planning, exactly how it plans to disrupt foreign networks. It is also a question of whether or not it would displace all foreign chains interested in the retail sector.
So foreign-owned drug store chains like Drogerie Markt or just Rossmann, maybe furniture chains like Jyske and Ike; and whether technical distribution networks, including MediaMarkt, are affected by the plan. Or the “war message” is only for those chain stores that mainly sell food. Namely Aldi, Auchan, Lidl, Penny Market, Tesco, and Spar. In the latter scenario, it is likely that János Lázár referred to the strengthening of the Hungarian food industry in his presentation on the displacement of foreign chain stores.
On Saturday we contacted the chain stores about what they had to say about János Lázár’s ad. Tesco and Spar have stated that they do not wish to comment on the János Lázár announcement. (As soon as we receive responses from other chain stores, it is expected to be only on Monday, this weekend, we will update our article or report on the reaction of companies in a new article.)
7 billion a day
In any case, the government has selected a huge market, with the six chain stores involved (Aldi, Auchan, Lidl, Penny Market, Tesco and Spar) achieving a total net income of almost HUF 2.6 billion last year, according to the latest official report of the company. (There are chain stores, including Tesco or Lidl, that do not report a calendar year, but rather a business year that runs from March to the end of February.)
Simply put, this means that Hungarian customers spent a daily average of HUF 7 billion net on the affected chain stores. So we are talking about billions and billions, and that is the level that the government targeted banking, energy, and the media.
Old story
János Lázár’s current war message is not surprising. According to the Index, Prime Minister Viktor Orbán said at a forum in Poland in the fall of 2016:
“There are four areas in which we need national capital to grow above international. These are the media, banks, energy and the retail network. There are three of us, we are broken on the fourth. We are forced to work on new ideas. Unfortunately, the commercial networks are smarter than us. A few more years and we will succeed. “
However, without concrete plans, it is not yet possible to predict what changes are expected.
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