Hungarian Government To Restrict Supermarkets In World Heritage Areas

  • 20 Nov 2014 8:00 AM
Hungarian Government To Restrict Supermarkets In World Heritage Areas
A bill on “implementing fair market practices” in commerce submitted to Parliament by the economy minister on Tuesday would prohibit big supermarkets and discount shops from opening in the area of Budapest’s World Heritage sites.

 The rules would apply to “discount shops”, defined in the bill as supermarkets over 400 square metres without a fresh meat and dairy counter; “large-scale supermarkets” with areas of between 2,500 and 5,000 square metres; and “hypermarkets”, with areas over 5,000 square metres.

The bill’s author argued that “capital-strong chains of shops can allow themselves to generate losses for several years in the interest of driving down prices, thus undermining Hungarian businesses that cannot compete.”

Budapest has two World Heritage sites: the Banks of the Danube and the Buda Castle Quarter (451 hectares), and the Andrássy Avenue and the Underground, with a property area of 58 hectares and a buffer zone of 240 hectares, data from UNESCO show.

The legislation is scheduled to take force from next year and would force existing shops in the area concerned to close by 2018. The same bill would prohibit retailers from selling fast-moving consumer goods that fail to generate a profit for two consecutive years. The rule would apply only to companies with sale of more than 50 billion forints in both years, and it would exempt companies in their first four years of business.

Meanwhile supermarket operator SPAR confirmed that it would postpone a significant part of the investments it planned in Hungary in the next few years, because the food supervisory fee and proposed legislation related to retail trade affects the company’s operations in Hungary, Rudolf Staudinger, supervisory board chairman of Spar Magyarország, told reporters on Tuesday.

Spar is not contemplating to leave the Hungarian market where it invested net 500 million euros over its 23-year presence, but they will likely postpone developments and will restructure expenditure, Staudinger said.


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