Hunary Market Access

Import regulations and customs duties

Regulations
In accordance with its European Union membership since May, 1st of 2004, Hungary applies the European Union trade policy such as antidumping or anti-subsidy measures. The European Union import regime is applied to Hungary. If Hungary has adopted most of EU regulations on May, 1st of 2004, some transitional measures have been granted to the country regarding some EU rules like for example freedom of movement for workers or cabotage inside some countries. To obtain further information on the acquis, please consult the Enlargement of the European Union, EU Guide to the Negotiations published by the European Commission.

While the European Union has a rather liberal foreign trade policy, some products need import licenses. There are some restrictions, especially on farm products, following the implementation of the CAP (Common Agricultural Policy): the application of compensations on import and export of farm products, aimed at favouring the development of agriculture within the EU, implies a certain number of control and regulation systems for the goods entering the EU territory.

When being introduced in Hungary, some products must be "CE" marked in respect for the European Directives adopted on the basis of the New Approach and the Global Approach. For further information, please consult the Guide to the Implementation of Directives based on New Approach and Global Approach.

Regulations governing payments
The Exchange controls are managed by the National Bank of Hungary and only the authorised banks can handle operations on foreign currency.


Distribution

Retail trade in Hungry reached a level of 21.1 billion euros in 2004, which is a growth of 12.4% as compared to 2003. The Hungarian market consists of 5 large commercial zones:
- Budapest and its suburbs, which account for 20% of the country's population.
- the Györ region (in the North-West), on the border with Austria and which is also the most prosperous region.
- the regions of Miskolc and Debrecen ; the Pecs zone; and the Szeged region.
Reforms, which began 10 years ago, have helped stabilise the economic condition of the country and led to the integration of Hungry with the European Union on 1st May 2004.

The Business to Consumer (B to C) market

Distribution networks for consumer goods are fast developing. Small and medium sized local businesses and especially small independent retailers are losing their market-share to foreign competition. Indeed, international stores are attracted to the country due to the increasing demand by Hungarian consumers for western products. The presence of several foreign groups can thus be noted:
- the Auchan group with a turnover of 722 million euros in 2004, which is a growth of 18%,
- Tesco with a turnover of 1.6 billion euros, an increase of 18%,
- the German groups Tengelmann, Baumax and Metro which achieved a turnover of 1.16 billion euros in 2004, showing a growth of 2%.
The food distribution market also consists of a few big national groups: the leader being CBA with a turnover of 1.9 billion euros in 2004, showing a growth of 23%.

Discount stores accounted for 13.2% of the wholesale trade in 2004, which is less than the European average, (16%). The main players in the discount business are:
- Plus (with 156 retail outlets)
- Penny Market with 143 retail outlets.
- Lidl with 22 retail outlets.

In the non-food distribution sector, foreign groups dominate especially in the ready to wear sector ( C&A, Mango, ...)

The Business to Business (B to B) market

In order to set up in this country, one needs to have good contacts with distributors. There are many opportunities in the services sector , primarily in financial services, advertising and distribution.

In the industrial domain, Hungarian suppliers have an excellent reputation, as they know how to produce quickly in limited quantities. Low pricing and good service, compared to that offered by the European Union, together with a skilled and efficient labour force, is an advantage to the country. Many companies develop and manufacture their own electronic parts and special equipment. Furthermore, the Hungarian market has the capacity to produce significant amounts of machine tools and equipment. With this in mind, several companies such as Ford, General Motors, Audi have invested in Hungary over the last few years.

FDI (Foreign Direct Investment) reached 4.167 billion dollars in 2004. However, foreign firms apart from making heavy investments in Hungary are repatriating a lot of these profits also. Most of the FDI has been made in sectors like the automobile industry, the food processing industry, chemicals, and pharmaceuticals.

Access to the Hungarian market is often made possible through participation in the salons internationaux that are continuously increasing in number.

Transportation of goods

By road
The road network extends over 30,031 km, out of which 515 km are highways . Since 1996 and in co-operation with the Trans-European Telecommunication Networks, the Hungarian Ministry of Transport has been following a new transport policy in order to modernise the infrastructure of the country: new highways, new subways, streetcars and buses in big cities and conglomerations. Furthermore, the goods transport sector is mostly privatised.
The current road network covers the North-South and South-North parts of the country. This still needs several modifications to be in accordance with the European standards.
The first toll motorway, connecting Budapest and Vienna, was inaugurated in January, 1996 .

By rail
The railroad network extends over 7,606 km, of which 2,191 km are electrified. Train is the most used means used for goods transport.
Just like road transportation, this sector was privatised. Therefore, the infrastructure is directly administered by territorial communities.
The privatisation and concession of the public sector's activities in 1998 accelerated the modernisation of the structures to match the European standards.

By air
The unique international airport of the country is Budapest-Ferihegy. The main airline company MALEV Hungarian Airlines is intended for passengers and MALEV air Cargo for freight transportation. In 1999, the freight transportation recorded an increase of 26% as compared to the previous year.

Standards

The institute of Hungarian standards (Magyar Szbvanyügyi Testület) is the organisation in charge of developing normalisation processes. There are numerous institutes for certification and ratification, among which the most important are the KERMI (consumer goods), the OETI (foodstuffs) and the MEEI (electronics).

Patents and brands

The organisation in charge of recording patents, trademarks and designs is the Hungarian Patent Office.
Hungary is part of the WIPO (World Intellectual property Organization) and signed the Agreement of Paris for the protection of industrial property. The country also signed the PCT (Co-operation for Patents and Trademarks Treaty), and is part of the Agreement of Madrid, on the international register of trademarks.