The Hungarian dairy industry is in crisis: dramatic losses and rising costs

By: Trademagazin Date: 2024. 06. 05. 11:31

In 2023, the Hungarian dairy industry faced significant challenges, and this resulted in serious losses for several large milk processing companies. The taxable profit of Alföldi Tej Kft. deteriorated from -1.4 billion forints to -3.2 billion forints in one year, while the profit of Sole-Mizo Zrt. decreased from 2.7 billion forints to 136 million forints, although here at least the final figure is positive.

In recent years, the milk sector has fallen from one crisis to another, which resulted in the depletion of the companies’ reserves. According to Attila Koller, co-chairman of the Milk Product Council, the costs doubled in one year, which led to a drastic increase in the prices of the products, and this caused a significant decrease in consumption.

The dairy industry is extremely energy-intensive, and in addition to the increase in energy prices, the costs of packaging and transportation have also increased, as have the price of raw milk and labor costs. The costs of the sector are still 40-50% higher than before the coronavirus epidemic. These rising costs and market changes are putting severe pressure on domestic milk processors.

Zoltán Harcz, the managing director of the Tej Terémtánács, pointed out some trade policy issues that adversely affect the domestic dairy industry. For example, the possibility of selling below the net purchase price, or the fact that imported boxed UHT milk is placed on the shelves in greater numbers instead of domestic products. According to Harcz, it would be necessary to review such policies and to have more active intervention by the competent authorities, especially regarding the advertising of plant-based products.