Due to the fear of expropriation, the Salzburg-based Spar trading group is withdrawing assets from Hungary, as part of which they have given part of the asset management rights to the management of their subsidiaries in Northern Italy, Slovenia, Croatia and the Swiss market contributing to the market here, said Hans Reisch, Spar Austria. group CEO in an Austrian food industry magazine.
We previously wrote regarding the fact that the Austrian Spar supermarket chain complained to the Hungarian government at the European Union regarding the special tax. The company asked Brussels to intervene in the matter.
Since then, the Austrian newspaper Kronen Zeitung has reported that there are new developments in the case. As it was written, the managing director of Spar in Austria, Hans K. Reisch, also asked the European Commission to
TO INITIATE PROCEEDINGS FOR BREACH OF OBLIGATION AGAINST HUNGARY BECAUSE OF THE SEPARATE TAX.
According to the paper Reisch sent a letter to Margrethe Vestager, the Commissioner responsible for competition law, Thierry Breton, the Commissioner responsible for the internal market, and the EU directorates-general responsible for the matter. They also added that Hans K. Reisch is not fighting this battle alone:
AUSTRIA MINISTER OF ECONOMY MARTIN KOCHER AND FOREIGN MINISTER ALEXANDER SCHALLENBERG SUPPORTED HIM IN THIS.
According to the newspaper, the two ministers jointly wrote a letter to Ursula von der Leyen, the committee’s chairwoman, criticizing the steps, which they said were discriminatory once morest Spar and disregarded fundamental freedoms.
According to the Spar leader, Viktor Orbán is “harassing” him
A Food newspaper In his article on Friday, the head of Spar states: the group reacted to Hungarian Prime Minister Viktor Orbán’s “harassment” of large food chains with special taxes and price freezes by filing a complaint with the European Commission and reorganizing Spar’s operations in Hungary in order to protect the company. “From Orbán’s claws,” it explained Economx economic portal.
Spar Austria wants to protect its assets from the clutches of Viktor Orbán, who has already asked the commercial multi: allow his relatives to invest in the Hungarian subsidiary. Basically, the Hungarian government wants to take over the ownership of our company through a share
– said Hans Reisch in his statement according to Economx. As he said, this is not an isolated case. He recalled that the European Parliament stated in June of last year that it was “deeply concerned” that a large number of companies were falling into the hands of Hungarian oligarchs. In addition, foreign actors are increasingly complaining regarding mass violations of the Hungarian authorities and attempts at intimidation, and the pressure on commercial companies is increasing.
We asked the Prime Minister’s Cabinet Office to comment on the Spar leader’s claims, and we asked if it is part of the government’s plans to acquire a stake in Spar? We received the following response:
The special retail tax was declared legal by the Court of Justice of the European Union. These are the facts, all other claims are baseless!
Spar’s complaint was nothing new in that foreign supermarkets had been complaining regarding the government’s special tax since 2022 (although at that time their officials only dared to comment on it anonymously).
The head of the Spar Group explained in the Austrian magazine that in order to prevent expropriation, the Hungarian business branch was divided into two parts: the company group withdrew the land and building rights from Hungary, as well as the wholesale and logistics rights, the management of which was transferred to Switzerland. There, Spar operates the subsidiary Aspiag Management AG, which participates in the operation of the chain in several European markets.
We gave our assets and real estate to our subsidiary Aspiag. Because we know that Orbán does not want to enter Switzerland, and we wanted to make it difficult for him to access Hungarian businesses
– said Reisch. The supermarket business operated by Spar Magyarország Kereskedelmi Kft., on the other hand, is now connected to the mother country, Austria. The department benefits from group taxation and, according to Hans Reisch, saves 10 million euros a year.
The Hungarian managing director of the company, Gabriella Heiszler, gave a major interview to our newspaper in April 2023. Then, among other things, he said regarding the special tax that “the other issue is that there is still no profit, let alone extra profit, and even today we still do not understand why it is determined in proportion to sales revenue”.
They went to the government in Brussels
The Lebensmittel Zeitung recalls that the Hungarian government recently raised the special tax for retail companies from 4.1 percent of net sales to 4.5 percent, which caused the drop in revenue of the country’s largest chains to jump from 2.7 percent at the beginning of 2023 to 4.1 percent. It should be noted that the Hungarian food market is dominated by Tesco and Auchan in addition to Lidl and Spar in second place.
According to Economx’s European industry sources, in April 2023, the representative of the Hungarian subsidiary already participated in the meeting of the EU Budget and Audit Committee, which decides on EU subsidies – he did this on behalf of the other local multi-chains under the auspices of the European trade association, Eurocommerce. The food chains have already submitted several submissions to the committee, attacking the Hungarian government’s decisions on the special tax and, for example, the price cap.
This Hungarian Nation when asked, Spar’s Austrian parent company confirmed that, to their knowledge, all foreign-owned retail companies had already spoken to Spar Austria in Brussels.
Spar takes up the gauntlet
Spar – with around 14,000 employees – is the fifth largest employer in Hungary. The group operates two logistics centers, two meat plants and one mixed plant, as well as 368 direct stores, and 273 locations are managed in a franchise system.
The operational business in Hungary is working, but the special measures, i.e. commercial taxes and the maximum price control of basic foodstuffs, are ruining it – complains the boss of Spar, emphasizing that at least one possible expropriation has now been prevented.
However, giving up the Hungarian business is out of the question, because their income situation here is “very comfortable”
Hans Reisch emphasized. THE Couriers said that Spar has so far invested a total of 2 billion euros in Hungary. They have regarding 180 million euros in assets here, so “it’s not that easy to pull out and maybe give things up. We are so strong in the Hungarian market that it would be grossly negligent. We’d rather fight.”
(Cover photo: Márton Mónus / MTI)
Business Talks ’24
Business conference
Don’t miss the year
of your business conference!
Get it
get your ticket now!
Follow Index on Facebook too!
I’m following you!
