Research and Markets: Despite the Excise Duty Hike, Some 43 Local Distillers in Hungary Welcomed the June 2009 Receipt Of a HUF3.2bn (EUR11.4mn) Grant

DUBLIN--(Business Wire)--
Research and Markets
(http://www.researchandmarkets.com/research/35b9d5/hungary_food_and_d) has
announced the addition of the "Hungary Food and Drink Report Q4 2009" report to
their offering.

The Hungary Food and Drink Report provides industry professionals and
strategists, corporate analysts, food and drink associations, government
departments and regulatory bodies with independent forecasts and competitive
intelligence on Hungary's food and drink industry.

In the Food and Drink Business Environment Ratings for Q409, Hungary remains in
second place out of the 14 major Central and Eastern Europe (CEE) markets
surveyed in the matrix. Hungary lost its pole position to Russia during the
previous quarter, mostly due to the sharp deterioration in both its economic
outlook and consumer confidence, with domestic consumption growth expected to
contract by some 6.5% in the course of the year. Despite enjoying advanced
regulatory and infrastructural environments, companies operating in Hungary also
have to contend with ageing and falling population numbers, a return to the
traditional preference for locally made produce and the rising demand for
private-label and discount goods.

Additionally, from the start of July 2009, the value-added-tax (VAT) was raised
from 20% to 25%, while excise duties on fuel, alcohol and cigarettes also
increased. A higher excise levy will further discourage investment in the
alcoholic drinks market, which is already suffering from declining beer
consumption, for the third year running. However, at the same time, VAT on
staple goods (including bread and dairy products) was lowered, in a bid to help
the consumer weather the current adverse economic conditions. Overall food
prices are not expected to rise as drastically in the course of the year as in
the previous two, under pressure from recessionary factors.

Despite the excise duty hike, some 43 local distillers in Hungary welcomed the
June 2009 receipt of a HUF3.2bn (EUR11.4mn) grant, sourced from both national
and EU budgets. Local authorities are protective of their nascent palinka
industry, which has been posting double-digit growth over past years. The
development has been driven by the security provided under the EU's 'protected
designation of origin' certification, with the shrinking population numbers also
prompting local players to look abroad for revenue growth.

In the meantime, the Hungarian meat processing industry remains an interesting
longer-term proposition. According to a study by market research company AC
Nielsen, despite contracting overall retail volumes, meat value sales reportedly
increased by 6% year-on-year (y-o-y) in the year to May 31 2009, illustrating
the strength of the Hungary's meat market. To this end, in June 2009, leading
Czech food company Hamé bolstered its presence in Hungary by acquiring the
canned meat business of Globus. Already present in the market through its
domestic subsidiary Hamé Hungaria, the acquisition represents a promising
expansion move for Hamé, which is expected to at least double its share of the
Hungarian canned meat industry. On the other hand, stung by the effects the
crisis had on its operating environment, Globus was a likely target. In March
2009, Globus reportedly pulled production of its meat range, after a combination
of demand weakness and an increase in operating costs forced through a
restructuring programme.

Key Topics Covered:

* Executive Summary
* SWOT Analysis
* Business Environment Ratings
* Food
* Drink
* Mass Grocery Retail
* Industry Forecast Scenario
* Market Overview
* Competitive Landscape
* Appendix
* Country Snapshot: Hungary Demographic Data

Companies Mentioned:

* Nestlé Hungary Kft
* Fornetti Group
* Cerbona
* Sió-Eckes
* Heineken Hungária Breweries
* Dreher Breweries (SABMiller)
* Borsod Breweries (InBev)
* Coca-Cola Beverages Magyaroszág Kft
* Tesco
* CBA Kereskedelmi
* SPAR

For more information visit
http://www.researchandmarkets.com/research/35b9d5/hungary_food_and_d

Research and Markets
Laura Wood, Senior Manager,
press@researchandmarkets.com
U.S. Fax: 646-607-1907
Fax (outside U.S.): +353-1-481-1716

Copyright Business Wire 2009