Another difficult year for the food industry

According to Attila Boródi, chairman of the National Association of Food Processing Enterprises (ÉFOSZ), 2007 was a very difficult year for the food industry and 2008 looks even more difficult. New legislation about the food supply chain and its supervision has appeared this year. EU regulations related to claims about nutritional values and health benefits are also gradually coming into effect. These are expected to make it easier for competent authorities to carry out their duties. According to the chairman, difficulties faced by the food industry have not been taken into consideration in working out legislation for the protection of the environment. Proposed new regulation pertaining to the environmental charge payable after the value of packaging materials is a worrying example of this phenomenon. This will translate into HUF 15 billion more taxes for beverage manufacturers, while after tax profits in the entire food industry totalled only HUF 14 billion in 2007. The global financial crisis is also expected to have an adverse effect on export. Whereas production of the domestic food industry accounted for 90 percent of the domestic market in 2003, this percentage is now down to 75 percent. However, there are some positive trends in the sector. A significant improvement has taken place in the quality of packaging and designs have become more attractive. A number of innovative convenience products have appeared and SME-s seem to be successful in finding market gaps. Many good examples of such government subsidies exist in most European countries, but these have not been adopted in Hungary yet.