New chances for the food industry

The Fidesz government promises to create better positions for Hungarian food products and already established a parliamentary committee that will examine the privatisation of the sugar industry and the country’s position in the EU’s sugar reform.

The next step could be examining the complete food industry privatisation, a plan for which has already been made. At the May meeting of ÉFOSZ (Federation of Hungarian Food Industries) news broke that the performance of the domestic food industry kept declining in 2010, by 0.4 percent. This negative trend could only be stopped if tax and administrative burdens would be reduced and a long-term strategy would be established on government level. ÉFOSZ already compiled a list of suggestions for the government one year ago about how to improve the competitiveness of the Hungarian food industry. Although the government reduced the administrative burdens of enterprises in the last 12 months, the food industry suffered from growing raw material and energy prices and from very high, 25-percent VAT. As regards the food processing sector, the issue of further extra taxes emerge from time to time, but politicians seem to have realised that the food industry is a strategic element of national economy, a sector where Hungary could pull ahead. Actors in the food sector support the government’s goal of the country’s food self-sustainment. In order to achieve this and to fight back food export, the concept should give more emphasis to modern food processing companies, alongside small, local enterprises that are also capable of preserving traditional values.