”This is a political product” – The Secretary General of the Hungarian National Confederation of Trade Unions spoke about the margin freeze and the retail crisis

By: Trademagazin Date: 2025. 07. 24. 12:25

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It cannot be justified professionally, but it can remain – this is how the current situation of the margin stop can be summarized, which Katalin Neubauer, Secretary General of the Hungarian National Trade Association (MNKSZ), spoke about on Della, the 24.hu podcast. According to her, the measure is more of a political tool than an economic solution, and she is confident that the government will be convinced to eliminate it during the August negotiations.

The margin stop distorts the market and pushes out small businesses

“The margin stop is a political product, the tip of the iceberg,” said Katalin Neubauer, adding that the real problems of the retail sector are much deeper rooted, primarily stemming from a lack of efficiency. According to the Secretary General, maintaining the measure after August can no longer be justified on professional grounds, although she is aware that maintaining the margin stop may be of paramount importance to the government from a political point of view in order to influence inflation data.

The measure not only causes price pressures, but also distorts competition: turnover is clearly diverted from smaller shops to larger stores, as they can maintain regulated margins on the affected products. This process only intensifies the structural change that has already begun: small shops are weakening, while discount chains and online commerce continue to gain ground.

Melon war, fines, store closures: pressure intensifies

The imbalances in the retail system are well exemplified by the “melon war” taking place on the seasonal fruit market: tensions between producers, traders and consumers are increasingly heightened as the season progresses. This year too, extreme end-consumer prices have emerged, which clearly illustrates the market distortions.

The seriousness of the situation is shown by the fact that nearly 600 fruit and vegetable traders closed their shops last year alone, partly due to economic pressure and partly due to government regulations. According to the MNKSZ, the official measures – such as the often disproportionate fines – put Hungarian-owned small shops in a particularly difficult position, which would need protection anyway.

Katalin Neubauer highlighted that the negotiations planned for August will not only be about the margin freeze, but also about the competitiveness of the entire sector. The aim is for decision-makers to assess the future of retail not only from a political perspective, but also on a professional basis, especially in light of the survival chances of domestic players.