Fighting for survival instead of growth

This article is available for reading in Trade magazin 2025/11.

He told that the food industry’s performance in recent years has shown sharp fluctuations: in 2024 the production volume index grew by nearly 4%, but this didn’t compensate for the significant decline in 2023. Then again the first half of 2025 brought negative results for the sector. According to data from the Central Statistical Office (KSH), in the first half of 2025 domestic sales dropped 1.9% and export was down 3.5%.

Price spiral and base effect

Tamás Éder believes that the movement of three price indexes are important when analysing: agricultural producer prices, food industry transfer prices and consumer prices. In 2021-2022 the agricultural price explosion (~20% in the first year and ~50% in the following year) brought about strong inflationary pressure, followed by a correction in 2023–2024. However, at the beginning of 2025 raw material prices started to rise again. Over a longer time series, the consumer price index typically rises faster than food industry transfer prices, but in 2021-2022 the situation was reversed: retailers cushioned the price shock with their margins. In 2023-2024 retail margins increased and in the first half of 2025 food industry sales and the consumer price index were practically the same: both at 6%. The price hikes resulting from the base effect isn’t surprising, when prices that used to be kept under administrative pressure are released: the series of measures between 2022 and 2024 – price caps, mandatory promotions, price monitoring system, EPR, margin freeze – significantly distorted the market.

Income is missing from the product path

FÉSZ’s president is of the opinion that Hungarian food isn’t expensive: in 2023 consumer prices reached the EU average, which – considering that the burdens on food significantly exceed the EU average – means that the income generated by those involved in the product chain is extremely low in Hungary. If the profitability of the product chain were at EU level, Hungarian food would be expensive. However, the shelf price is particularly favourable compared to the taxes. Tamás Éder also talked about the new government decree authorising the minister responsible for waste management to modify and – if necessary – increase the EPR fees during the year.

The conquest of discount stores and import pressure

The package of administrative measures introduced in recent years has had several “secondary” consequences: in addition to the conquest of discounters, the market position of branded products has improved in several categories, as a result of the margin freeze. At the same time fierce competition and continued government intervention have boosted imports, especially of cheap mass-market products. There are also signs of a decline in quality. Tamás Éder is cautiously optimistic about domestic demand in the near future. Import pressure is almost sure to increase. Retailers will continue to minimise losses, problems with food industry profitability will persist, and the willingness and ability to develop will weaken among certain industry players.