Better performance from the food industry, combined with market loss
Tamás Éder, president of the Federation of Hungarian Food Industries (ÉFOSZ) told that the food sector performed 1.4 percent better in 2016 than in the previous year. Despite this good performance there are structural problems in the food industry: the growth was smaller in key segments such as meat, milk, fruit and vegetable processing.
The president stressed the importance of the VAT cut, which definitely had a whitening effect on the sector. This step was absolutely necessary in the food industry, because in certain areas the size of the black economy was immense. Both legislators and market players learned a lot from this measure, and now the task is to implement further VAT cuts. However, despite the good indicators, the domestic competitiveness of the Hungarian food industry didn’t increase. Food industry export increased more, by 1.6 percent than the domestic performance, which had to be around plus 1.2 percent to have the 1.4 percent average growth.
Although food consumption was up 3 percent in Hungary, consumers put more import products in their basket. Generally those products do badly which are purchased by consumers every day. When buying these, Hungarian consumers are driven by price. Hungarian food companies can’t compete with the lower prices of import products until they invest in technological development – for which they need state funding. Mr Éder added that 2016 was the most profitable for those food companies that employ more than 9 people. //
![](https://trademagazin.cdn.webgarden.io/wp-content/uploads/2018/01/%C3%89der-Tam%C3%A1s_opt-300x300.jpeg)
Tamás Éder
president
ÉFOSZ
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