Annus horribilis – ”1992 is not a year on which I shall look back with undiluted pleasure”.

The summer of our discontent

The troubles didn’t start last year, just as the British Empire didn’t fall overnight. 2022 actually started much earlier, with Covid and its long aftershocks, only to be followed by a sudden strengthening of the negative trends caused by the war and the energy crisis. Inflation was already at a 20-year high of 9.5% in April. FMCG volume sales slightly dropped, meaning that only higher prices drove the expansion. In the summer the “extra profit package” unexpectedly hit the trade, which was feverishly looking for profitability, but extending the scope of the public health product tax (NETA) and increasing its sum also caused problems for the some members of the Branded Goods Association.

Accelerate and brake

How long is it possible to speed up and slow down the economy at the same time, stepping on both the gas and the brake – as this has been happening for some time, as a result of diverging monetary and fiscal measures? In 2022 and also this year, government measures have directly intervened in market processes, sometimes cancelling each other out. Shall we have more domestic products on the shelves? More “flagship” domestic brands? Fewer imported goods? At the same time, lower food inflation? Meanwhile consumers aren’t well either. They have been caught off guard by the higher energy bills, the biggest inflation in Europe that brought the previous consumption boom to a halt first, and then drove it into the ground. Lucky brand owners only saw their volume sales fall by less than 10-15% in the first quarter of this year.

Sense and sensibility

Value creation takes money – brand owners pay for R&D, innovation, more transparent supply chain operations, ethical marketing; they have high costs but consumers can’t really afford their price premiums anymore. Brands are suffering now and will continue to suffer for some time. The good news is that if there really wasn’t a consumer demand for value-creating manufacturer brands, they would have disappeared long ago. But the brands are here, and they plan to stay. What we need now is an honest dialogue between market players, and an honest confrontation, even with ourselves, but certainly with our partners. Market players depend on each other more than ever before. If next year turns out to be better than this year, it will be a minor miracle. A marvellous year, annus mirabilis. //

Strong Brands for a Strong Hungary

Established in 1995, BGA Hungary is the collective voice of the local FMCG brands. Our mission is to create for brands an environment of fair and vigorous competition, fostering innovation and guaranteeing maximum value to consumers now and for generations to come. We believe that our brands help create a strong economy, rich culture, and prospering society.

Bacardi-Martini • Beiersdorf • Bonduelle • Borsodi • British American Tobacco • Brown-Forman • Bunge • Cerbona • Coca-Cola • Coca-Cola HBC • Colgate-­Palmolive • Coty • Danone • Detki Keksz • Dr. Oetker • Dreher • DunaPro • Ed.Haas • Eisberg • Essity • Ferrero • Freudenberg • FrieslandCampina • GlaxoSmithKline • Globus • Heineken • Hell Energy • Henkel • Hipp • Intersnack • Jacobs Douwe Egberts • Johnson & Johnson • Kaiser • Kométa • Kotányi • L’Oréal • LEGO • Maresi • Marketing Art • Mars • Mary-Ker • Mogyi • Mondelēz • Nestlé • Nordzucker • Nutricia • Partner in Pet Food • Pepsi • Pernod Ricard • Philip Morris • Pick • Prémium Kert • Rauch • Red Bull • Roust • Sága Foods • Savencia • Sió-Eckes • Sole-Mizo • Soós Tészta • Szentkirályi • Target Sales Group • Tchibo • Törley • Unilever • Univer • Upfield • Vajda Papír • White Lake • Zwack Unicum