The new law’s executive office does not aim at maximising revenues

The Act on the prohibition of unfair market conduct by the suppliers of the food product life cycle entered into force on 1 January. On 10 December 2009, PricewaterhouseCoopers and Law Firm Réti, Antall and Madl Landwell organised a round table discussion for industry representatives. Dr László Réti welcomed the 50 industry leaders. He told that the problems were not evenly distributed among agriculture, food industry and retail – these three players needed to cooperate, despite that some of their interests were different. Zsolt Feldman, deputy head of the agriculture department at the Ministry of Agriculture and Rural Development added that this need to cooperate was not specifically Hungarian. He talked about how the Hungarian Competition Authority gave red light to the Code of Ethics for food product life cycle and how the principles of this Code were incorporated into the new law. He told that the real novelty was the system of sanctions, implemented by the Central Agricultural Office (MgSZH). The president of the MgSZH, László Lukács stated that the new law was one of possibility and responsibility. He emphasised that they would always keep two basic principles in mind: 1. constant cooperation with stakeholders when preparing for implementation and 2. trying to achieve complete transparency. As for sanctions, possibilities were rather wide admitted László Lukács, but their goal was not maximising revenues. Tamás Éder, the president of the Federation of Hungarian Food Industries (ÉFOSZ) opined that the law was important and well oriented, but was by no means revolutionary since it set basic requirements that should work without regulation in a more developed market economy. He told that ÉFOSZ would continue to monitor processes and report any kind of irregularity. Dr Balázs Kemény, legal affairs director with Penny Market said that retailers were happy that imposing fines was not the goal of MgSzH, still nearly half of the law’s text dealt with implementing sanctions. Dr György Udvardi, legal affairs director at Tesco talked about the borders of transparency and companies’ reluctance to reveal confidential business information. Dr Balázs Kemény agreed with him and added that the tension between processing companies and producers should be eased. Zsolt Feldman made it clear that the law applied to all retail companies having a seat and legal representation in Hungary. In connection with unfair business conduct László Lukács told that charging fees for ‘services’ like listing a product or keeping it in stock constituted unfair business conduct, but secondary placement or joint promotions could be charged for. He also promised that in a six-month period after entering into force MgSZH would not start proceedings ex-officio, in that period they intended to examine how the law worked in practice. At the end of the seminar Alexandra Farkas from the Tax and Financial Control Administration (APEH)’s customer service and information department gave a briefing on certain VAT issues. First and foremost, she separated business policy-type discounts from other types: as of 1 January 2008, non-business policy discounts must not affect VAT. Business policy type discounts include quantity discounts, price discounts and all other discounts that 1. are reasonably available to anyone, 2. laid down in an agreement and 3. do not nullify the tax base.