Hungarian government says it will sue supermarket chain Spar for ‘defamation’

Hungary’s government plans to take legal action against Austrian supermarket chain Spar for “defamation”, Prime Minister Viktor Orban’s chief of staff told a news conference on Tuesday, Reuters quoted him as saying.

“Court proceedings will be opened against Spar, we assume for defamation,” said Gergely Gulyas.

His announcement comes after the Austrian government and Spar sent letters to the European Commission in March saying the special tax introduced in 2020 by the Budapest government is discriminatory against foreign retailers in Hungary and therefore in breach of EU law.

The European Commission announced on April 5 that it was looking into the complaints and would “ensure an appropriate response”.

Hans Reisch, CEO of Spar Austria, noted in letters dated March 4, 11 and 20 that taxes paid by foreign retailers in Hungary reached up to 4.5% of turnover after the introduction of the special tax.

“Foreign retailers, including Spar Hungary (…) fall under the highest rate of the special tax,” Reisch pointed out in one of the letters obtained by Reuters. It also revealed that Hungarian retailers Spar competes with have to pay a tax rate of no more than 1%.

Reisch also charged that foreign retailers in Hungary are practically forced to operate at a loss because profit margins in this sector are less than 4.5%.