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Hungary pursues foreign supermarkets

Friday, December 05, 2014 - 01:37

Multi-national supermarkets could be driven out of Hungary, after the government raised their inspection costs and threatened to shut them down if they fail to make a profit for two years. Hayley Platt reports.

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It's one of France's biggest supermarkets. But this branch of Auchan is in Budapest. Around 7 out of 10 of Hungary's top retailers are foreign-owned. That's something the government isn't happy about. It says they undercut local firms and wants to drive them out. It's raising inspection charges and changing the law so it can shutdown any store that doesn't make a profit within two years. (SOUNDBITE) (English) GOVERNMENT SPOKESMAN, ZOLTAN KOVACS, SAYING: "We see many cases of distortion; unreasonably low prices, dump prices, going for net losses for years to come because they [foreign supermarkets] can afford it, so these are the practices and signs that should be wiped out." Auchan isn't impressed, calling the move discriminatory, even though France - along with Germany and Austria - operates similar laws. Britain's Tesco is also assessing the impact on its business. As are Lidl, Aldi and the Metro Group. Bryan Roberts is from Kantar Retail. SOUNDBITE: Bryan Robers, Director of Retail Insights, Kantar Retail, saying (English): "Most companies when they enter a new geography will make losses for five, six, seven years, if not longer. So to try and penalise businesses that try to grow and create job opportunities in your country seems to be a bit of a strange move. And no doubt the big multinationals will be consulting with their lawyers." A survey by a Hungarian trade organisation showed the majority of shoppers don't want to see the foreign stores leave. It's also feared some Hungarians may even cross into neighbouring countries to continue shopping in their favourite stores.

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Hungary pursues foreign supermarkets

Friday, December 05, 2014 - 01:37