End of market reshuffle

Last year was a good and stable period for the Hungarian canned food industry which processes one million tons of fruits and vegetables annually. While 2004 brought losses for the industry owing to the over valued HUF, last year was better and 2006 is expected to end with profits. Hungarian enterprises maintained their market positions in the domestic market, while exports to the EU increased, though Russian export showed decline. Immediately after the accession to the EU, cheap stocks from the EU were dumped on the new markets. Last year saw the end of the rearrangement period in the market and leading manufacturers with a strong background successfully stabilised their positions. No major changes in the Hungarian market are expected to occur. The crisis of the industry lasting two decades seems to be over with only one third of the manufacturers active in the 80’s surviving. There are almost one and a half thousand enterprises in the food preservation business in Hungary, but ten big companies share 75 per cent of total revenues. Changes are needed however, since demand for canned food is shrinking in the EU and healthier products are required in order to stay competitive. The number of price sensitive consumers is increasing in the domestic market, while the segment which prefers premium products is very limited. A limited, but growing segment shows demand for healthier products and demand for diabetic products is also growing. A new trend is the production of national speciality dishes with exotic, or at least foreign flavouring. Domestic demand for canned products is not expected to show major changes, but further expansion of EU exports is foreseen.