Hungary: Authorities renew Spar investigation

Minister for Economy unhappy with EU court’s decision, Spar investigated by competition authority again

Last week, the European Court of Justice ruled that the Hungarian government’s 2022 price cap policy on food undermined fair competition. This came up due to Spar’s legal dispute with the Hungarian government, which the Hungarian Supreme Court referred to the ECJ.

Later, in a press conference, Gergely Gulyás, Minister of the Prime Minister’s Office, told the press that the government was “not surprised,” because, “If it had been up to Brussels, there would have been no price reduction campaigns in Hungary, and neither would there have been one if it had been up to Spar.”

Later, the Ministry of National Economy issued a statement. In this, Minister Márton Nagy  said that regarding the ruling that “instead of families, the court has sided with price-gouging and profit-driven multinational corporations, who are trying to conceal their greed through a continuous battle against the Hungarian government. This behavior by Spar, the Brussels commission, and those submitting remarks in the case, also goes against the interests of Hungarian consumers and families."

The Minister further added: "Brussels is siding with the price-gougers, and nothing is sacred to these price-gouging multinationals. But no matter what they do, the government will always stand for lowering prices and supporting Hungarian families. There is no place in the Hungarian market for any business that plays dirty games against the interests of Hungarian consumers."

On Monday this week, Hungarian news sites reported that the Hungarian Competition Authority (GVH) is conducting a follow-up investigations on Spar Hungary. The authority is investigating “the implementation of the commitments” made by the company. Portfolio.hu reported that in the previous investigation concluded by GVH in December 2020, the retail company committed, among other things, to establishing a new regional supplier system, increasing sales opportunities for small Hungarian producers, and creating new jobs. In the current procedure, the GVH is examining “whether Spar has fully and timely implemented the obligations it voluntarily undertook in the remediation program.”

Hungarian food prices doubled in six years

The evening news program of the TV channel RTL reported this week that in Hungary, food prices doubled in six years. This is in contrast with the average 40% price increase in the rest of the European Union.

Despite the price caps and mandatory discounts, flour, sugar, and oil have become more expensive in the country. Last year, groceries were cheaper in Spain and the Netherlands than in Hungary, reports the channel.

Last year, according to the Central Statistical Office (KSH), the rate of price increase between June and July was particularly significant for staple food items. The price of flour rose by 38.1%, sugar by 13.9%, and sunflower oil by 9%. This price increase was mainly caused by the removal of price caps and mandatory discounts, which the Hungarian government phased out last summer.

Economic policy measures taken in recent years and the impact of global inflation have particularly affected the population in Hungary, especially in the area of food, where price increases have far exceeded the European average, TradeMagazin.hu reported regarding the price increase. Péter Szász, an analyst of Portfolio group added that with the lifting of the price caps, the previously price-regulated staple food items rose drastically.

Cold kills thousands of swallows

Over the last weekend, the sudden turn of the weather has hit Hungary’s migrating swallows hard. The cold snap has killed huge numbers of the birds and bird rescuers are also powerless to save them. The news site 24.hu interviewed Zoltán Orbán of the Hungarian Ornithological Society (MME) about the phenomenon.

Mr. Orbán has told the portal the phenomenon, on some level, is a natural part of the birds’ lives since swallows are both specialized feeders (hunting flying insects) and excellent fliers, so in the absence of natural predators, only weather extremities can keep their populations in balance. However, the cold snap last weekend was an extreme one. It hit swallow populations in the important period when they practice hyper-feeding, in preparation for their annual southward migration. This is also the time when new hatchlings have to grow up and become independent fast. In the late August-early September period, the birds build up fat reserves and also strengthen their flight muscles so that when their migration starts, they could travel to Central and Southern Africa in four to five days, flying 1000-1200 kilometers a day.

In the past period, in the Balaton region, an incredible midge invasion had developed, which could even be observed on weather radars. This attracted a large number of hyper-feeding swallows from all over Transdanubia, as well as many migrating specimens from northern Hungary or even further north, to the area, just before the cold snap.

In the Sóstó Nature Preserve in Székesfehérvár, Western Hungary, rescuers tried to save more than 400 swallows, however, more than 60% of them perished, Gábor Csete, nature preservation expert and head of the Sóstó preserve told news portal 44.hu.

Since many swallows that fall on roads have been run over by cars, temporary speed limits were introduced on Sunday in the Balaton Uplands, the region of the northern shoreline of Lake Balaton. The Ornithological Society also asked locals to open garages and other secondary buildings for the swallows so that the birds could shelter in warmth and safety.

Kisalföld.hu has reported on a volunteer rescuer, Ms. Annamari Kok, who lives in Bőny, in Győr-Moson-Sopron County, in Western Hungary, who is sheltering more than 300 swallows. The animal welfare NGO Állati Küldetés, as well as good Samaritan civilians, have been taking them to her, often a few, or up to ten birds at a time. She often has to feed the birds by hand, or with tiny tweezers, however, many have started to feed themselves.

Danube flood highlights need for water retainment infrastructure

The River Danube has flooded the banks in Vác, in Northern Hungary, north of Budapest, as the wave of flood has reached the country. The high water mark in the town is expected to be 750-760 cm, 50 cm short of the high water mark of the historic 2013 flood. Power has been shut down in 1,400 households in the flooded areas.

Agrárszektor.hu has reported on the dangers of flash floods. The flood can endanger residential areas as well as farms and fisheries. Landslides might also occur and wild animals fleeing the flood might enter cities.

Because of the changed climate, and the region’s changed, unbalanced, chaotic precipitation patterns, these extreme events will also become more frequent, the portal writes.

The portal emphasizes that a possible solution could be the creation of natural water retention areas, which help in holding back water and slowing down flooding. These areas can include marshes, forests, and meadows, which act as natural sponges, absorbing water and slowing its flow into rivers. Such systems can improve the water retention capacity of the soil, reduce the destructive impacts of floods, and contribute to the preservation of biodiversity.

According to the latest governmental information, the flood will pass from Hungary in the middle of next week. The high water mark in Budapest is expected to be reached Saturday night.

Warm fall ahead, rain complicates harvest

Following the summer drought, sudden rains are making the fall harvest difficult, reports the agriculture portal Agrárágazat.hu. In some areas, 50-90 mm of rain has fallen in a short amount of time in the middle of September. (For reference, Hungary’s annual rainfall should be between 500 and 800 mm).

The portal writes that by the first third of September, the drought had become “biblical”, with more than 100 mm of precipitation missing in various areas of the country. The surface layer of the topsoil in the eastern and southeastern parts of Hungary (over two-thirds of the country) is extremely dry and dusty, containing small amounts of moisture in areas that received heavier rain in the first half of last week. However, the middle and deeper soil layers have dried to a critical level nationwide.

With the sudden rains, depleted soils could not absorb the large amount of rainwater. By the end of last week, 30-50 mm of rain had fallen over most of the country, with 90 mm reported near Sátoraljaújhely, near Tokaj in Northern Hungary. What’s also a problem for farmers, writes Agrárágazat, is that the cool, humid weather and persistent moisture pose significant crop protection challenges, not to mention the rising costs of drying.

The current rainy period is favorable for rapeseed, sown in the beginning of September. However, warm air and winds are coming, which could dry up the water from the current heavy rainfall. The rest September is expected to be relatively warm and October will also be a one to two degrees warmer than the multiannual average.

And then, locusts

Agrárágazat.hu also reported on locust invasions in the Great Plains. Since the middle of summer, multiple reports have been made in Bács-Kiskun and Csongrád-Csanád Counties, in the middle of the Hungarian Plain, in Central and in South Hungary. The National Food Chain Safety Office (NÉBIH) has announced that Italian locusts had been observed through unusually high pest damages in the south of Bács-Kiskun County, near Balotaszállás.

Despite plant protection treatments, many farmers have been affected by locust invasions. Among others, a 2.5-hectare sea buckthorn plantation in Üllés, which was about to bear fruit, was 100% damaged by insects. Additionally, several farmers reported that locusts caused 100% damage to potato, cauliflower, corn, and alfalfa crops.

Mass fish die-offs caused by turning weather

In Borsod County, in North-East Hungary, mass fish die-offs were reported at various lakes due to a combination of factors connected to the summer drought and the recent cold snap. The head of the local fishing organizations’ alliance told the portal that die-offs caused by similar weather events are hard to avoid. The warming and then cooling of the waters of lakes and fishing ponds led to low oxygen levels. While carps can tolerate as little as 2% dissolved oxygen, zander and asp start dying off at that stage. The only way to aid fish in these conditions is to artificially circulate the water with motorboats and jet-skis.

Game meat consumption remains low

This week a report was published on Agrárszektor.hu about game meat consumption in Hungary. Game meat is of high quality, however, it is one of the more expensive varieties of meat, which means that most consumers do not buy it regularly. Annually, around 800 tons of game meat is sold in Hungary, but the average consumer eats 300 to 400 grams of it in a year, while the per person consumption of pork is 30 kgs in a year. Demand for game meat usually picks up around the end of the year, near the holiday period. Because domestic demand is low, the majority of Hungarian game meat is exported.

Walnut prices on the rise, production needs modernization to stay competitive

OTPAgrár.hu reported this week that both the price, and production area of walnut has been rising in Hungary. In 2020, the per kilogram price was €10.97, in 2023, this price was €14.49. However, production efficiency remains low. In the past 10 years, the cultivated area increased from 6 thousand hectares to 9.2 thousand.

Yields remain low however, often only 1 to 1.5 tons per hectare, while in major competitor countries this can be as high as 4-5 tons per hectare. A major reason for this is a low average level of cultivation technology. Well-maintained orchards account for less than 3 thousand hectares.

Walnut prices increased five-fold since 2000, and while exports increased between 2006 and 2019, , the trend has turned around in the past years. Currently Hungary, with its annual 6,450 tons of walnuts produced, is ranked at number 30 on the list of largest walnut producer countries.