Hungary Newsflash Week 5

Pet trade regulation reform, sustainability, COVID-19 effects in commerce, HORECA & horticulture - The week in Hungarian agriculture

A dof pup sleeping in a human's arms
©Pexels
The new, stricter regulation to be introduced in the pet trade sector is intended to limit illegal dog breeding. Every year, Hungarian dog breeders sell thousands of pups to buyers in the EU.

Weekly briefing

  • Pandemic lockdowns: Hungary extends the border lockdown measures until March 1. Passenger traffic through the border for business and economic purposes is still possible. See more here.
  • Economic policy: As a pandemic fiscal measure, persons under 25 years of age are to be exempt from personal income tax in 2022.
  • HORECA sector: Stakeholders believe that with a gradual phasing out of lockdown measures, the hotel sector could be revived by around summer. Still, the same level of average per room income that hotels had in 2019, could only be reached by 2023. At any rate, following the outbreak of the pandemic, the number of planned hotel openings until 2024 has halved.
  • Pig sector: Hungary and Japan finally reached an agreement on pork export. Hungarian pork can now be exported to Japan again. Following the high pork price trend of 2020 (14% increase throughout the year in total), in January 2021, the price of pork meat dropped from €4.29/kg to around €2.8/kg. See more here.
  • Horticulture: Due to the economic shocks of the pandemic and the closures in the HORECA sector, potato production in Hungary took a hit. Due to the drop in demand, the supply chain to groceries has been disrupted, which in turn drove wholesale prices down. This led to the delayed harvesting of certain varieties, which degraded the quality of the produce.

Stricter regulation for pet trade

The news portal Magyar Mezőgazdaság reports that a new government decree will make it obligatory for pet traders to register in the national food chain safety supervision system. The reason for the new legislation is that while Hungarian traders sell tens of thousands of dogs to buyers in the EU every year, a large portion of these animals are younger than six months of age and are bred and sold by unlicensed dog breeders, without proper documentation.

The new regulation will enter into force on April 1, and according to it, the commerce of hobby animals will be conditional upon registration at the competent regional food chain safety authority.

A woman shopping in a grocery store.
©Jeremy Smith
Due to the pandemic, retail commerce was suffering in Hungary last December. Compared to last year's figures, aggregate retail commerce figures dropped by 4% in the country. While non-food products saw a 9.3% decrease in sales, food trade and groceries saw a milder decline at 3%.

Retail commerce took a hit from the pandemic

Both compared to the data from the previous months, and to December 2019, the output of retail commerce decreased in 2020, reports the news portal HVG. Based on the latest data of the Central Statistical Office (KSH), the news portal compared the adjusted figures of commerce (including stores as well as online purchases) to 2019 data. In 2020, the volume of retail commerce decreased by 4%.

Non-food products saw an average 9.3% drop, out of which the smallest decrease was industrial products (3.5%) while the purchase of textiles, clothes and footwear dropped by more than one third (32%). Online shopping, however, went up by 24%.

In food retail commerce, the drop was much less significant (3%). Out of all retail commerce in Hungary, the largest portion of trade is done by food groceries and small retail shops (49%). The total adjusted decrease of trade volume at retail stores in Hungary was 0.2% in 2020.

Upcoming webinar: Sun, water, soil – Can Sustainable Agriculture Be Profitable?

The development and renewal of agriculture is one of the most efficient means of eliminating poverty, achieving common prosperity and catering for the forecasted 9.7 billion people who will populate the Earth by 2050. The continuous innovation of agriculture and food production, as well as adapting to the forever changing environment will contribute to the reduction of the greenhouse effect, caused by the same industry in the first place. How can companies, family ventures and research centers take care of this issue, while being profitable?

These will be topics at an online conference held be the Hungarian Association of Executives on February 18. The moderator of the event will be Agricultural Counsellor Geert Kits Nieuwenkamp. Registration is available following this link.