The Hungarian food economy after the EU accession

Átírás

1 The Hungarian food economy after the EU accession Dr. György Raskó IAMA Forum& Symposium, Budapest, June 20 23, 2009.

2 The Hungarian food industry is the loser of the regime change and the EU accession Volumen index: % Name Period Production Inland realization Export Base year ,0 100,0 100,0 Periods of change Years of privatization ,6 7,6 2,6 Years following the EU accession ,9 24,3 4,8 Last year of periods ,1 69,6 109,4 Forrás: Zsuzsa Folláth, ÉFOSZ, 2009

3 External trade of processed food in million s 2003 Export Import Balance Food economy in total Out of total: processed food Percentage of food industry products in % 74,8 79, Food economy in total Out of total: processed food Percentage of food industry products in % 57,0 78,2 Source: AKI, Budapest

4 The share of the Hungarian food economy from the Hungarian food market Source: ÉFOSZ, Budapest

5 Changes after the EU accession Sharp competitive market immediately, instead of the former, wellprotected inland market Overflow of food products that are cheaper than Hungarian ones but often of low quality Continuous reduction of production and loss of inland market share in almost all branches The import of processed food rose with a boom, while export grew only in modest amounts The import of agricultural raw materials tripled in five years (2003: 721mEURs, 2008: 2471mEURs) Loss of position with relation to raw material growers and retail trade (the double press)

6 Trade chains relations Retail chains in advantage (rapid decline of independent small shops, enter of the big discount chains (Lidl, Aldi) Net selling price below cost level Global purchasing (procurement companies) CBACOOP,Tesco,METSPA(turnover: bneuro/year) Common action against them is punished with cartel charges by Office of Competition. Grey trade flourishes Sales of surplus supplies became permanent Private Labels underplay branded products Refunds (back bonuses) without service (30% and above, in spite of the code of good practice) Late payment and arbitrary reductions by the chains. Pressure for implicit deals (delisting threats) Creation, than refusal of the Food Code by the Office of Competition

7 The food industry and the current economic and financial crisis Demand for the processed branded products is decreasing The loan capacity of banks is minimal also in the case of good clients Meat, poultry, milk and canned food industry in the verge of bankruptcy Government initiatives (human resource retention, government guarantee for bank loans) are insufficient The main problem: Loans are irrationally expensive (15 18% interest / year), that a responsible food company will not accept if it has long term prospects Lack of capital and excessive indebtedness a straight way towards bankruptcy

8 Possible ways to restore competitiveness A significant reduction of taxes and other state charges is a prerequisite for staying alive (currently: over 50%) Capital investment and inside reorganization at the Hungarian food companies is inevitable The companies have to discover their efficiency reserves New management techniques have to be applied: Switch to a more market oriented production Professional marketing activity Cost efficient production Conscious brand name management Conscious PL strategy: the manufacturers have created their own highquality competitors under the egis of capacity efficiency. In the future they should distinguish the PL products and their branded products in product features as well.

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10 The European retail structure In % of sales GB 13% 4% 11% 20% 22% 23% 25% 21% 23% 56% 53% F P 21% 19% 15% 43% 24% 24% 32% 27% 27% 24% 39% 33% 33% 11% 18% 20% 39% 32% 27% 22% 46% 43% 33% 33% 27% 26% 23% 21% 20% 18% 16% 14% 14% E SF D 13% I 30% Hipermarketek Kis Szupermarketek+Diszkontok 13% S CH 24% 15% 29% Dk Gr B 7% Ire 32% A 17% 24% 8% 59% 51% 46% 14% 20% 42% 7% 9% 5% 4% N NL 61% 15% 18% POL HUN 44% 35% 48% 20% 27% 18% 6% 5% 4% 31% 33% 30% CZ SK Nagy Szupermarketek+Diszkontok Hagyományos Kereskedelem+Vegyiáru üzletek *A teljes auditált eladási érték részesedés és üzlet-méret megoszlás alapján (dohányáru nélkül)

11 The Central European Retail Structure In% of sales 4% 5% 4% 5% 5% 5% 5% 4% 4% 4% 10% 11% 10% 9% 9% 9% 8% 7% 6% 5% 51% 51% 45% 41% 39% 66% 65% 64% 60% 57% 34% 32% 30% 29% 27% 59% 59% 54% 50% 45% 24% 26% 25% 27% 25% 22% 13% 15% 16% 19% 32% 31% 31% 31% 31% 19% 19% 17% 20% 26% 30% 31% 15% 16% 17% 17% 18% 24% 26% 28% 31% 33% 31% 33% 40% 26% 30% Hipermarketek (2500 m2 felett) Szupermarketek és diszkontok ( m2) Hagyományos kereskedelem (400 m2 alatt) Vegyiáru üzletek *A teljes auditált eladási érték részesedés és üzlet-méret megoszlás alapján (dohányáru nélkül) A hipermarketekre vonatkozó szlovák adatok ig tartalmaznak minden 400 nm feletti üzletet.

12 Number of stores in Hungary Teljes boltszám (28,069) (27,926) (27,389) (28,002) (27,022) (25,997) Vegyiáru üzletek Kis élelmiszerüzletek (-50) Közepes élelmiszerüzletek (51-200) Nagy élelmiszerüzletek ( ) Szupermarketek ( ) Hipermarketek (2501+) Forrás: ACNielsen Retail Audit

13 Number of stores in the Czech Republic Teljes boltszám (23,891) (25,224) (23,935) (22,892) (21,923) (20,914) Vegyiáru üzletek Kis élelmiszerüzletek (-50) Közepes élelmiszerüzletek (51-200) Nagy élelmiszerüzletek ( ) Szupermarketek ( ) Hipermarketek (2501+) Forrás: ACNielsen Retail Audit

14 Number of stores in Slovakia Teljes boltszám (13,986) (15,531) (14,579) (14,034) (13,467) (13,088) Vegyiáru üzletek Kis élelmiszerüzletek (-50) Közepes élelmiszerüzletek (51-200) Nagy élelmiszerüzletek ( ) Szupermarketek ( ) Hipermarketek (2501+) Forrás: ACNielsen Retail Audit

15 Number of stores in Poland Teljes boltszám (114,645) (117,791) (119,536) (123,244) (122,295) (122,828) Vegyiáru üzletek Kis élelmiszerüzletek (-50) Közepes élelmiszerüzletek (51-200) Nagy élelmiszerüzletek ( ) Szupermarketek ( ) Hipermarketek (2501+) Forrás: ACNielsen Retail Audit

16 Thank you for the attention