Share of domestic foods in the product range of Hungarian retail chains

Friday, October 9, 2015

Authors: Gyula Kasza – Barbara Bódi – Ágnes Vajda – Adrienn Somogyi


1. Summary

Detailed analysis of the product range of retail chains showed that there had been a significant improvement in the share of domestic products in the categories analyzed. In the case of 9 of the 10 chains included in the study, an increase was measured, and this is also true for the averages of both domestic and international chains. The survey also showed that the share of domestic manufacturers in the product range is extremely low in the case of certain high added value product categories (such as processed dairy products or ham), which should definitely be improved upon.

We think that our survey provides a valuable feedback to policy makers, and important information to product councils, professional associations and private sector stakeholders in making their strategic decisions. According to our surveys performed in retail chains, the share of domestically produced foods in 2014 was 78.2%, a 2.5% increase compared to 2010 data. The increasing share of domestic products is also beneficial from a food safety point of view, because manufacturers and distributors can be accessed and checked easily in their case.


2. Introduction


Is is a specific goal of Hungary’s medium and long-term food industry development strategy (2014-2020) that at least 80% of the foods consumed by the population should be produced domestically. This has social, economic and sustainability advantages as well [1]. An inrease in the share of domestic products is also expected to result in a lower food chain safety risk [2], [3], [4], because it is easier for the authority, which has been operating in Hungary according to the chain supervision principle since 2007, to follow events that involve domestic entities. If there are foreign players in the chain, then the tracing process is slower and its outcome is more uncertain when problems arise, because in these cases the National Food Chain Safety Office (NÉBIH) needs the help of foreign partner authorities.


Achieving the 80% share is a significant challenge for the Hungarian food sector [5], [6]. There werer major shifts in the Hungarian food market after the regime change [7], [8, [9]. The share of imported products started to increase continuously and after joining the European Union, because of the practical realization of the basic right of free movement of goods, the range of foreign products available on the shelves became even wider. Based on the estimations of the Federation of Hungarian Food Industries it can be said that compared to the period before joining the European Union (share above 90%), the share of Hungarian foods in retail decreased to roughly 75% by 2008 [10]. A detailed study was conducted by the Faculty of Food Science of Corvinus University of Budapest in 2010, regarding the product range of the 12 largest retail chains of the time, painting a picture even blacker than that [11]. The goal of the earlier study, just as the present one’s, was to determine the share of domestic products within the different product categories (and not the entire product range).

There had been no new survey results published in the period since, regarding the share of domestic products, therefore, at the end of 2014, we thought it was time to repeat our previous survey. The reason was that significant changes had taken place in the food market in recent years. The concentration of the retail sector continued, several retail chains left the Hungarian market, and a restructuring among business formats took place as well. In the meantime, the so-called „Hungarian product decree” (VM decree 74/2012. (VII. 25.) about the use of certain voluntary distinctive signs on foods) and the Hungaricum law (Law no. XXX. of 2012 about Hungarian national values and hungaricums) were passed.

Several events in the field of food chain safety also took place that possibly affected the image about the reliability of domestic products. In 2012, communication with consumers, in a more open way than before, became an integral part of the renewal process of the food chain supervision authority. These years were rich in food chain events as well. Just to mention a few examples: the E. coli scandal in Germany, the methyl alcohol scandal in the Czech Republic, or international affairs related to dioxin contamination. Unfortunately, there have been also events that involved Hungarian players, such as the hose meat scandal, some cases regarding products of small-scale producers, and several illegal or „semi-legal” plants that were exposed by NÉBIH.

The above factors often operate in extremely complex ways and, in addition, they might have opposite effects, so it is hard to estimate changes in the food range of retail chains without conducting surveys.

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