Share of import significantly lower in Hungarian retail chains

The future of agriculture and the food industry depends on Hungarian consumers: on their decision whether to buy domestic or foreign products – researchers of Agrár-Európa Tanácsadó Kft. and Kopint-Tárki Zrt. concluded at the presentation of Agrármonitor’s latest volume. An increasing number of people look for Hungarian products in the stores, but their number is not high enough to improve considerably the position of Hungarian food production. This year, agricultural production fell by 10 percent. At the same time, behind good quality and price, the Hungarian origin of a product has become the third most important decision-making factor. Cereal yield was 25 percent lower than last year, rape yield was 14 percent lower and in the case of maize, the downturn could be 15-20 percent. Agricultural production could fall back as much as 8-10 percent this year, with the sector’s added value lagging 10-15 percent behind last year’s. The domestic food market is shrinking (by 2.6 percent) and production in the first six months fell by 2.2 percent; domestic sales were down by 3.3 percent, but export augmented by 4.4 percent. In the first five months of the year, the value of food export in Euro fell by 8.1 percent, while that of export decreased by 9.5 percent. We mainly exported base materials and imported highly processed products in growing numbers. By analysing import data, we can see that multinational companies produce well-known Hungarian brands like Sport chocolate bars or Globus canned meat abroad, because it is more cost effective. According to Márton Szabó, senior researcher of Kopint-Tárki, 24-36 percent of products sold by foreign-owned chains came from abroad, while the same ratio at Hungarian-owned chains was 20-21 percent. Kopint-Tárki’s findings indicate that the proportion of import hardly changed (12-13 percent). International competitiveness of the Hungarian agriculture and food industry is reflected by the foreign trade balance of individual product groups. Hungary was a net importer of cheese, margarine, chocolate, biscuits, other food products, spirits/liqueurs and cigarette in 2008. Some say a retail chains are more likely to import products from the country of the company which owns them, but after examining milk, cheese and wine imports by different retail chains, Kopint-Tárki did not find this statement justified. They also concluded that Hungarian food producers would have to fight hard to gain back the market shares they lost in the past few years. They have to accept that import is here to stay and cannot be considered some kind of “market disturbing” factor – especially not in the export-oriented sector of agriculture. Not only consumers, but also producers will profit from increasingly fierce competition by their increased competitiveness – given that a level playing field is provided for both domestic and import products.