Page 1


RETAIL NOV 29, 2013 – DEC 12, 2013

VOL. 21. NUMBER 23


BUSINESS JOURNAL HUF 1,250 | €5 | $6 | £3.5




An election budget? The government majority approved the main points of the 2014 budget bill while playing down any critique that its decisions approving or rejecting lobbying for earmarks were swayed by the looming 2014 general elections. For the time being, it has a shapely tally of economic indicators it can show off to support its policies and whether the next budget needs corrections will only be known once the next government is in office. 03

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Gods of the coupon arena

If there ever was a company that could be shown as a role model to any startup anywhere it has to be NNG. The company hailing from Hungary has become the global leader in personal and vehicular navigation and sits on its throne uncontested. Company president David Wiernik’s biggest problem is that Hungary is running low of professionals he could hire for the rapidly expanding business. 10

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Napi Tipp




South Stream hindered

Compensate creatively

EU rules are calling into question the legality of agreements signed between member states and Russia’s Gazprom relating to the South Stream natural gas pipeline set to deliver fuel to Europe. Member states in the east of the bloc are actively lobbying in order to allow the investment to progress. 17

Employee−rewarding incentive trips must be unique, eventful and... cheap! Once long and lavish, these trips have been reduced to a necessary minimum. Travel organizers now need to come up with really creative plans to appeal to firms. 20-21


Not many moms with three kids run hot companies or create a unique business model to attract a big following. Réka Porst, AmCham’s Woman of Excellence 2013, handles it all. 08


Budapest Business Journal | Nov 29 – Dec 12

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THE CENTRAL BANK CENSOR Gradually settling into its new role as overseer of the financial markets, the central bank tried its jurisdiction in a different field and clamped down on the media. The Napi Gazdaság business paper and its website were fined a combined a HUF 6 million for an article laying out the possibility that the Norwegian oil fund is contemplat− ing the sale of its shares in Hungarian energy group MOL in response to the ongoing controversy around company boss Zsolt Hernádi and allegations he made bribes to acquire a controlling stake in MOL’s Croatian peer INA. Understandably, market participants reacted adversely to the prospect and MOL’s share prices took a hit. György Matolcsy’s central bank deemed that the media outlet was to blame, because the piece took facts, combined them with the state of present affairs and made a grounded projection for the future. The MNB’s ruling itself says that “the factual statements are genuine, the central bank found no evidence about the falsehood of the information contained”. So far, so good. But then it goes on to say that “the article mostly focused on the most extreme scenario that could affect MOL’s share market”, thus warranting the fine. What this boils down to is the fact that the market regula− tor penalized a media outlet for doing its job, which is provid− ing its readers with information for their needs and invest− ments and yes, analysis on possible outcomes they may have to prepare for. The editor−in−chief’s – perhaps all too muted – response rightfully asks whether a government official comparing Hungary to Greece and sending asset tumbling should

also have his words withheld from the public, because they are too troubling. But let’s take this line of thought further. Shouldn’t the reg− ulator also penalize government officials who constantly caused major forint devaluations by floating the idea of get− ting a safety net from international lenders, even though they clearly had no intention of actually doing so? Shouldn’t the finance market regulator also protect the interests of Hungarians who saw their foreign currency debts increase because of market tampering? Shouldn’t citizens who will have to pay for the 11% government bond yields that came from the same statements receive some gratification? The list can be as long and as arbitrary as it suits one’s taste. This is the second recent drive in the Orbán establishment to limit the liberties of the press, the first being a law that could potentially bring prison sentences for individuals and outlets found to make slanderous contents public. This interpretation of the central bank’s role as having arbi− trary jurisdiction for tossing out fines for pieces that are made and should be made every day is deeply concerning for the media in general. Especially so for the segment where the Budapest Business Journal and its peers operate, since by the very nature of what we do and what our readers expect and rightfully demand of us, we have to look behind facades, read between the lines and analyze what we see rather than just follow the prompter. We can only hope that the fine was an unfortunate mis− judgment of a regulator’s role and that the state isn’t actually trying to take away the reporting freedom of business journalists.


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The much−hyped whistleblower case of the former audi− tor about retailers having an established system of alle− giances that allows them to dodge paying loads in taxes unfortunately only goes to confirm what Hungarians already know and expect. András Horváth and another unnamed source, also famil− iar with the doings of the tax and customs authority NAV, claim that retailers in Hungary have for years used a fairly simple concept that lets them skip paying taxes after food− stuff that is eventually sold in legal retail. He claims that the method involves the largest multinational retail companies and is performed with the knowledge of the tax monitor and is done with the consent of the political elite. The revelations, though no companies have been named and no substan− tive action has been taken by the authorities, confirm what everyman thinks: the fat cats are all in cahoots, taking their cut while the little guy toils away help− less to do anything about it. ‘This is why this country is where it’s at,’ as we like to say when we have a craving to blast off commonplaces. But consider this: it is just as common for an electrician to arrive to fix a lamp, spread his arms saying he can’t fix it and charging HUF 5,000 for the five minutes of fruitless labor. Then when he’s asked for a receipt his mind is visi− bly blown, since he doesn’t grasp the idea that a customer doesn’t take direct hand−to−pocket payment and the conse− quent tax dodge as the natural flow of events. It took NAV quite a while, but they staged a sting oper− ation and lo and behold, they now know what apparently everybody else knew for ages, which is that basically none

of the people who take money for fixing stuff in and around your house pay any taxes. Maybe it’s not just the top that’s rotten, but also the world of small domestic businesses where the core activity is to avoid paying taxes at all costs and then perhaps give some consideration to providing quality services. As is usually the case, neither end of the spectrum is fully to blame, but both institutional background deals and insti− tutionalized everyday avoidance have put the country into a catch 22 that it can’t break out of. The political elite is reliant on big business for support and is obliged to return given favors. The tax levels compel and often actually force busi− nesses to cook the books, oth− erwise they couldn’t make a livable profit in a million years. Little wonder that only a handful of Hungarians sup− port the entire state system with their taxes. Considering Hungary has 39% of the average European purchasing power but has to pay a 27% VAT, which is the highest in Europe and is in the world’s top three, the situation is ridiculously distorted. The cleansing has to hap− pen in all regions of the land− scape. Authorities must prop− erly explore high−profile grift, and as long as there are whistleblowers, they will always have support from the media. NAV must also continue with its efforts to achieve better discipline and morale. Ultimately, the ideal solution would be for Hungarians to be able to live better, since that’s the only incentive not to track down the loopholes. Seeing the amount of money that is circulating in the system off the radar, maybe that ideal isn’t all that far−fetched.



1 News


Is Hungary the winner of new EU budget?



Harnessing diversity and the female touch





Parliament approved the cornerstone figures of the 2014 budget after the budget committee passed amendments that raised key entries such as the cash flow deficit. “Next year’s budget bill is in line with the government target set in 2010: increasing employment, keeping the budget deficit under 3% and in general, a sustainable and stable management of public finances,” said Economy Ministry deputy state secretary Péter Benő Banai. The most notable amendment that was submitted covered HUF 60 billion in municipal debt that is to be assumed by the state. The planned budget deficit won’t be affected by the amendments and the accrual−based EU−conform gap for 2014, which will be 2.9% of gross domestic product, Benő Banai told the budget committee. The original bill earmarked only HUF 4 billion for this purpose. The other significant item was raising central subsidies to the Budapest public transport company BKV from HUF 10 billion to HUF 24 billion. Benő Banai said that increased revenues from value added taxes and additional state−assets related revenue would neutralize increased spending. The budget cornerstones were passed with 219 votes in favor and 30 opposed. The nays came from Jobbik and the socialist MSzP and while the green LMP’s representatives abstained. ELECTIONS AHEAD “The 2014 budget is, like this year, a predictably boring budget,” Economy Ministry state secretary Zoltán Cséfalvay told U.S. broadcaster CNBC. His words underlined Economy Minister Mihály Varga’s earlier comments that the government would refuse the temptation of


Parliament approves main 2014 budget figures ■ Results showing glitches in implementations won’t be known until after 2014 elections

drafting a budget bill laden with handouts ahead of the next general elections, likely in April. There are nonetheless doubts about the feasibility of the government’s forecast for this year and next and consequently whether the declared stringency will actually be enforced. “Current data indicates that although this year’s GDP will be better than earlier expected, Policy Agenda doesn’t believe that the lower than 3% deficit target can be reached,” the think tank said. It argues that since the aggregate statistics of the first quarter won’t be available at the time of going to the polls, the government can communicate that the implementation of the budget law is progressing as planned, and make any necessary corrections after reelection, allowing it a degree of comfort. Péter Oszkó, former finance minister under the Bajnai government, said that whether the bill is an ‘election budget’ would only be seen after the fact, but noted the main issue that is not addressed is that the economy is on a poor trajectory and there is no hope of sustainable growth. “There is only a propaganda of success, the government is taking more out of people’s pockets than it’s putting in,” he told commercial broadcaster ATV SMOOTH SAILING “Step−by−step, Hungary’s economic policy is growing much more predictable, and I

Photo: Zoltán Máthé/MTI

The parliamentary majority approved the main items of the 2014 budget, boosting spending and revenues alike, pledging to keep the fight against public debt ongoing while sticking to deficit goals. Even if some of the figures are ambitious, the actual results of realizing the bill won’t be seen until after the next general elections, allowing the governing party a sense of confidence.


think this is a good message to the world of business,” Cséfalvay insisted. If the government should be in need of any ammunition to support its claims, it has quite a few to choose from. The third quarter’s preliminary 1.7% year−on−year growth shows that the previously set target for 2013 could be exceeded, raising hopes for 2014 also. The state debt management agency ÁKK conducted a second, successful dollar bond auction for $2 billion this year that was five times oversubscribed, indicating strong investor demand for Hungarian paper. The government’s plans were also reassured by the European Commission which placed the country’s budget deficit below the 3% mark in its latest, September review, which means there is no immediate threat of Hungary reentering the excessive

deficit procedure that was finally lifted earlier this year. “The country appears to be on an improving track, 2013 will provide the basis for 2014, spending remained under control and seems to be well manageable, while the rollback of the shadow economy can also boost revenues, pointing to a calm year in 2014,” head of the Budget Council Árpád Kovács told public media. The notions of the budget controller are underlined by widespread expectations that the U.S. Federal Reserve will keep its stimulus campaign going for another several months, leaving plenty of dollar liquidity on the global market. The demand at the latest auction indicates Hungary won’t have any short−term troubles getting financing.


04 News


Budapest Business Journal | Nov 29 – Dec 12




Accusations by offended former employees made in public destroy government measures introduced to improve tax morals Government spokesman András Giró−Szász speaking to MTI in the wake of the alleged tax evasion scheme.

Former employee of the National Tax and Customs Office (NAV) András Horváth maintains that the authority is actively involved in allowing major tax “discounts” to numerous major firms operating in the Hungary. As he told a parliamentary committee, he holds specific details of companies that perpetrated frauds of HUF 29 billion with the knowledge of NAV and the consent of the political elite. The government has so far given no credence to Horváth’s claims.

ECONOMY GEN GOV’T DEFICIT REACHES 84.5% OF FULL-YEAR TARGET IN OCT Hungary’s cash flow−based gen− eral government deficit, exclud− ing local councils, reached HUF 887.7 bln at the end of October or 84.5% of the full−year target, the National Economy Ministry confirmed in a second reading of data. The deficit narrowed on a HUF 61.4 bln surplus for the month of October. The central budget was HUF 24.5 bln in the black for the month, and the so− cial insurance funds and separate state funds recorded surpluses of HUF 21.6 bln and HUF 15.3 bln, respectively. In January−Octo− ber, the central budget deficit reached HUF 1,192.4 bln or 14.3% of the full−year target. The social insurance funds were HUF 234.7 bln in the black and separate state funds ran a HUF 70 bln surplus. RETAIL SALES RISE SLOWS IN SEPT Retail sales in Hungary rose a calendar year−adjusted 0.3% year− on−year in September after climb− ing 1.4% in the previous month, a second reading of data published by the Central Statistics Office (KSH) shows. In an unadjusted 12−month comparison, retail sales rose 0.8% after a 0.9% increase in August. The September increase was unchanged from a prelimi− nary report published on Novem− ber 6. KSH revised the August un− adjusted retail sales data slightly down from 1%. Retail sales fell 0.7% from August according to cal−

endar and seasonally adjusted fig− ures after a 0.3% monthly decrease in August. Adjusted for calendar and seasonal effects, retail sales have fallen month−on−month since May except for a slight 0.1% increase in July. ‘FUNDING FOR GROWTH’ SCHEME EXPECTED TO GAIN IMPETUS FROM SPRING The National Bank of Hungary expects its Funding for Growth Scheme to pick up momentum from next spring or summer, central bank governor György Matolcsy said at a recent confer− ence. Matolcsy said the scheme was being “fine−tuned.” The MNB made HUF 750 bln of 0% refinanc− ing available to banks to support SME lending in the first phase of the scheme in June−September. The second phase of the scheme launched in October with HUF 500 bln of refinancing. Matolcsy said the scheme would not have been possible without the intro− duction of the proportional, flat− rate tax system.

DOMESTIC GOV’T DECIDES TO BUILD NEW CONFERENCE CENTER IN BUDAPEST The government has decided that it is necessary to build a new con− ference center in Budapest, and instructed the national develop− ment agency to make the neces− sary preparations with immediate effect, a government resolution published in the official gazette Magyar Közlöny revealed. The

Numbers in the news

3.2% is the new key base interest rate set by the Monetary Council of the National Bank of Hungary on November 26. The move was in line with market expectations.

9.8% the average unemployment rate among active Hungarians in August−October. The rate was down from 10.5% in the same period a year earlier.

project will be carried out as a state investment and the build− ing should become state−owned according to the resolution. Re− sources for the preparatory works should be found in this year’s bud− get. The government intends to make the construction a priority project in order to make the nec− essary preparatory approvals sim− pler and faster and in order to in− volve European Union funding as much as possible in the financing.

negotiations, the ministry said, adding that the European lawmak− ers confirmed, with minor amend− ments, the agreement reached by the European heads of state and government in February. Hunga− ry will receive €35 bln euros for cohesion policy and agricultural policy in the seven years to come. In terms of per capita net position, Hungary will be second among the 28 member states of the EU, the ministry said.

11 CITIES SEEK CASINO LICENSES Eleven Hungarian cities want li− censes to open casinos, business daily Világgazdaság said. The cities are Győr, Debrecen, Szom− bathely, Pécs, Szeged, Miskolc, Nyíregyháza, Szentendre, Hévíz, Gyula and Balatonfüred. Earlier, the government planned to award just nine new casino licenses, the paper said. At present, two casi− nos operate in Budapest and one in Sopron, near Hungary’s border with Austria. The paper noted that a recently passed amendment al− lows casino operators to write off concession fees against the gam− bling tax they must pay.

VOTER POLL SHOWS FIDESZ LEAD AMONG ALL AGE GROUPS In its latest poll of registered vot− ers in Hungary, pollster Tárki showed that the ruling Fidesz− KDNP continues to hold its steady lead over opposition parties in the run−up to the 2014 national and EU parliamentary elections. The poll further showed that Fidesz enjoys support across all demo− graphics, with Fidesz−KDNP cur− rently a strong draw no matter the voter’s age. The Tárki poll shows the appeal of major opposition party MSzP steadily increases with the average voter’s age: Just 10% of those polled between 18 to 22 years of age are currently back− ing the socialists, while 40% of the 70−and−older crowd supports the party. Meanwhile, extreme right− wing party Jobbik showed some 30% support in the youngest de− mographic and 28% for the likely− voting 23− to 27−year−olds but 5% and under among those 63 and older. MSzP’s left−wing coalition partner Together 2014−Dialogue for Hungary (E14−PM) likewise dips to below 5% among the sexa− genarians.

POLITICS MINISTRY CALLS HUNGARY WINNER OF NEW EU BUDGET Hungary will become one of the biggest winners of the European Union’s financial framework for 2014−2020, approved by the Eu− ropean Parliament on November 19, the Foreign Ministry told MTI. The decision puts an end to three years of tough and complicated

Photo: Attila Kovács/MTI



News 05

Budapest Business Journal | Nov 29 – Dec 12


The National Bank of Hungary, as the regulator of the finance market, levied a HUF 3 mln penalty on business daily newspaper Napi Gazdaság and another similar fine on its website for ma− nipulating trade on the Budapest Stock Exchange. The paper ran an article saying that Norwegian investors are considering selling their shares in MOL in response to the ongoing corruption matter, which sent the energy company’s stocks sliding.


The recently re-christened Sberbank Hungary has launched MoneyGram cash transfer services in all 52 branches in the country, thereby joining a global network of some 334,000 locations in 200 countries. With the deal in place, Sberbank becomes the number one partner for MoneyGram services in Hungary. At Sberbank branches, transactions may be undertaken in euros or U.S. dollars; a maximum of €7,000 per transfer and €14,000 per day is allowed. In formally launching the service, Sberbank Hungary CEO said, “I am pleased that Sberbank Hungary becomes the biggest partner of MoneyGram in Hungary. Our aim is to offer favorable and convenient services to our customers. The flexible cross-border MoneyGram transfer service we provide in our branches will add convenience to many people’s transfer routine.” Volksbank has changed its name as of November 1 to Sberbank Hungary. The bank said it has launched its brand change process, as a result of which the branches will operate under the brand name Sberbank, just as in the case of the other central and eastern European units of Sberbank Europe. Russia-based Sberbank acquired Volksbank International’s business in Hungary along with the rest of its Central and Eastern Europe operations, with the exception of those in Romania, for €505 million in February 2012.

Photo: Zoltán Máthé/MTI



The marketplace in the Józsefváros district of Budapest continues to operate even though the owner of the area, state rail company MÁV, canceled the lease contract on request from the municipality. Komondor Kft, which runs the ‘Chinese market’, so−called because of the origins of many sellers and the goods sold, prevented MÁV from acting on the termination claiming it has attacked the decision in court and will hold out until a legally binding decision is reached. Komondor is currently looking at other venues to set up shop.

Insurance company Waberer Hungária Biztosító began selling health insur− ance November 27, company owner György Waberer announced. Waberer will sell radio−diagnostic insurance in partnership with Onkomplex Kft. Waberer currently sells vehicle, home and property insurance.

Hungarian flooring maker Graboplast will build a HUF 6.4 bln plant in Tatabánya. Graboplast has already signed a contract for a HUF 1.6 bln govern− ment grant for the investment. The new plant will employ 100 people to make premium−category flooring.

The National Infocommunications Service Company (NISz) on November 14 signed a HUF 14 bln contract with the consortium of Kapsch Carrier Com and MVM Ovit to install a Global System for Mobile Communications−Railway (GSM−R) along railway lines in Hungary.

Hungary’s savings cooperatives had combined after−tax profit of HUF 3.6 bln in Q1−Q3 down from HUF 7.7 bln in the same period a year earlier, fresh data pub− lished by the National Bank of Hungary shows. Interest income fell 7% to HUF 50.6 bln, in parallel with an easing cycle by the central bank.

Germany’s Bosch has decided to move production of a vehicle electronic−prod− uct from its plant in Hatvan to the company’s factory in Arnstadt, Germany, as part of a reorganization of the Arnstadt plant, Bosch said. The 120 affected workers at the Hatvan plant will immediately be offered different work within the factory, Bosch added.

Hungary’s Competition Office (GVH) has fined 11 banks a combined HUF 9.5 bln for cartel activity during an early payback scheme for borrowers with foreign currency−denominated loans that ran from late 2011 to early 2012.

Hungary’s Graboplast has won an order to supply flooring for buses that will carry athletes during the Sochi 2014 Winter Olympic Games, the company told MTI. Graboplast will supply about 20,000 sqm of flooring for 335 vehicles. According to analysis undertaken at local business news outlet Portfolio. hu, a 20% year−on−year increase to HUF 40.6 bln in dividend payment from OTP Bank is expected for 2013, together with a dividend yield of 3.3%. Port− folio cited OTP’s Q3 earnings report in having again set aside HUF 10.15 bln for dividend payment in the period, thus far totaling HUF 30.45 bln for the year. K&H Bank had consolidated after−tax profit of HUF 16.2 bln in Q1−Q3, 10.5% more than in the same period a year earlier, CEO Hendrik Scheerlinck said, at− tributing the increase to bigger business volume, strict cost control, stable lend− ing losses and positive one−off factors. In the third quarter alone, after−tax profit reached HUF 9.1 bln. Evonik Agroferm, the Hungarian unit of Germany−based specialty−chemicals company Evonik Industries, has completed a HUF 2.1 bln capacity expansion investment at its plant in the village of Kaba. Steelmaker ISA Dunaferr has initiated the process of laying off 158 workers at the company’s plant in Dunaújváros. On November 7 state secretary for employ− ment Sándor Czomba said that Dunaferr’s management had confirmed plans to lay off 400 workers, well under the 1,500 redundancies initially announced in August. Turkish integrated logistics service provider Ekol expects its new Hungar− ian unit to generate €7.5 mln turnover in 2014 and to become a market leader on the route between Turkey and Hungary. Ekol set the subsidiary with initial capital of €1 mln.

Harman/Becker Gépkocsirendszer Gyártó, the Hungarian unit of Harman Becker Automotive Systems, has completed a HUF 3.05 bln capacity expan− sion at the unit’s plant in Székesfehérvár, the company announced. The unit re− ceived HUF 703 mln in support for the investment through the government’s New Széchenyi Plan. Budapest Waterworks and mineral water bottler Szentkirályi Ásványvíz have signed a declaration of intent on reopening a bottling plant on Margitsziget in Budapest. The spring on Margit Sziget is one of the best known in Hungary, but production at the Szentkirályi bottling plant was suspended in 2010. United States−based elec− tronics manufacturer Jabil Circuit said that 673 em− ployees are to be made re− dundant at its Tiszaújvaros plant – this despite HUF 6 bln received in govern− ment support in 2011 for the sake of job creation. Germany−based Bosch Group is moving produc− tion and development of electric woodworking tools from Switzerland to Hungary as part of a re− structuring, the engineer− ing giant said. Bosch will expand its tool plant in Miskolc from the second half of 2014, creating 320 jobs by the end of 2016.



06 News

Budapest Business Journal | Nov 29 – Dec 12


CHINA SEEKS TO BOOST TRADE WITH CEE COUNTRIES China wants to double trading vol− umes with Central and Eastern Euro− pean members of the EU in the next five years, Li Keqiang said on his fi rst visit to the former communist bloc as premier. Serbia’s Prime Minister Ivica Dacic –at− tending a summit of prime ministers of 16 CEE countries in Bucharest, Romania – stated at a joint press conference on November 26 with Keqiang and Hungar− ian Prime Minister Viktor Orbán that this is a chance to set high technology goals for the region. Dacic, Keqiang and Orbán agreed to a joint project of mod− ernization of the railway link between Budapest and Belgrade. The prime min− isters from CEE and China last met in April 2012 in Warsaw. Keqiang’s prede− cessor, Wen Jiabao, said then that China would set up a $10 billion credit line and a $500 million investment fund for East− ern and Southern Europe.

advance in 2015 after a mixed picture next year as the region tries to overcome the im− pact of a slump in the euro zone, it said in its latest report on November 19. The OECD raised Poland’s growth forecasts for this year and next to 1.4% and 2.7% from May’s out− look for 0.9% and 2.2%, citing rising exports and domestic demand. It saw 2015 growth of 3.3%. The Paris−based organization cut its Czech GDP forecast to −1.5% and 1.1% for 2013 and 2014, from a previous −1% and 1.3%. Growth in 2015 was seen at 2.3%. Slovakia’s growth forecasts were little changed at 0.8% this year and 1.9% in 2014, from 0.8 and 2% respectively, before the economy expands by 2.9% in 2015. The OECD raised its out− look for Hungarian growth to 1.2% this year and 2% next from a previous 0.5% and 1.3%. It then sees growth slipping back to 1.7% in 2015. Slovenia grappling with big losses in its largely state−owned banking sector, should see its economy shrink by 2.3% this year and 0.9% next year before swinging back to 0.6% growth in 2015, the OECD said.

OECD SEES ECONOMIC REBOUND IN CEE BY 2015 The Organization for Economic Cooperation and Development expects CEE economies to

SLOVAKIA FALLS IN TAXPAYING RANKINGS The ‘Paying Taxes’ poll, made by PwC, the World Bank and the International Fi−


nance Corporation, which compares 189 countries worldwide, found that Slovakia slightly worsened its position against the previous year. ‘Paying Taxes 2013’ placed Slovakia two positions lower than in 2012, at ranking 102, still better than the other Visegrád 4 countries: Poland (113), Czech Republic (122) and Hun− gary (124). Experts say that the ranking reflects the high tax and levies rate, and the level of red tape, while also stating that the tax system is too complex. EU READY TO LIFT VISAS FOR MOLDOVA, BUT NOT UKRAINE The EU’s executive has given its green light to visa−free travel for Moldova’s 3.5 million people but said Ukraine and Georgia needed to make more progress before lifting their visa requirements. The European Commission said that it would consider immediately after a sum− mit in Vilnius, “presenting a legislative proposal to lift visa requirements for Mol− dovan citizens holding a biometric pass− port,” news wire AFP reported. Leaders of the 28−nation bloc were due to gather in the Lithuanian capital on November 28− 29 for talks with six former Soviet bloc nations, including Moldova and Ukraine, aimed at tightening trade and political ties. HUGE RALLY AGAINST EU INTEGRATION IN MOLDOVA ‘No’ to closer ties with the European Union, that was the message from at least 15,000 Moldovans answering the call of the country’s opposition Commu−

nists to protest in the capital Chisinau, Euronews reported on November 24. Party leader Vladimir Voronin accused the country’s pro−European government of ignoring public opinion and claimed it intended to sign a secret document at Vilnius. He also said that Moldova could receive cheaper energy from Russia, Belarus and Kazakhstan within a rival customs union led by Moscow. A much larger rally in favor of EU−integration was held in Moldova earlier in Novem− ber. According to opinion polls, just over half the population of the ex−Soviet republic supports an increasingly close relationship with Brussels. SLOVENIA TO COMPENSATE EX-YUGOSLAV ‘ERASED CITIZENS’ Slovenia has approved a bill to com− pensate thousands of former Yugoslav citizens who were erased from the civil registry after independence in 1991. The bill, passed by 46 votes in the 90−seat parliament, followed a ruling by the Eu− ropean Court of Human Rights last year, which ordered Slovenia to pay indemni− ties to all so−called ‘erased citizens’. Un− der the new bill, each ‘erased’ person will receive €50 ($67) for every month they were deprived of their citizenship. Some 25,000 Yugoslav citizens who were living in Slovenia when the country declared in− dependence in 1991 were removed from the civil registry without being informed. As a result, they found themselves with− out social security, health insurance or a valid working permit, forcing them to leave the country or stay on illegally.


News 07

Budapest Business Journal | Nov 29 – Dec 12

HARNESSING DIVERSITY AND FEMALE ENTERPRENEURSHIP Panels of experts discussed hot current topics at the seventh Annual Conference on Diversity organized by the American Chamber of Commerce in Hungary. The challenges of multicultural business environments, the impact of globalization on worker mobility, and knowledge transfer across borders were high on the agenda. The event also hosted the Women of Excellence award ceremony, won by online entrepreneur Réka Porst, a mother of three. LEVENTE HÖRÖMPÖLI-TÓTH

“In our globalizing world we need to find the 1% people have in common and exploit its potential 100%,” Willy Benkő, President of the American Chamber of Commerce in Hungary said in his keynote speech at the organization’s Annual Conference on Diversity, which took place for the seventh time on November 13. High−ranking ADVERTISEMENT


A separate session was devoted to discussing knowledge transfer across borders. Panel members gave examples of their hands−on experience concerning the building of complex company structures on a global scale. LogMeIn, a celebrated star of the start−up scene is a textbook case for demonstrating how an innovative idea can grow from a small Hungarian office into a global brand.

Diversity strengthens competitiveness, but requires many other skills apart from professional expertise ■ This year’s winner of Women of Excellence Award is Réka Porst, an entrepreneur running an online marketplace for handcraft goods

corporate executives, HR and social sciences experts held round table discussions about the impact of multiculturalism on enterprises, workers and business organization. It was agreed that diversity constitutes a pillar for competitiveness as people with different backgrounds can all make invaluable individual contributions to development. However, working in a multicultural environment also poses difficulties. Ildikó Rudnák, dean of Szent István University, pointed out that beside professional excellence, other things such as interpersonal skills, adaptability and cultural curiosity are also needed to create a productive working atmosphere in the case of an international staff. INTEGRATE YOU MUST Another aspect of globalization, migration was described as a significant catalyst to diversity. “Migration trends further

solidify the current social structure in Hungary,” said Dr. Zsolt Németh of the Hungarian Statistics Office (KSH). “Most well−educated people end up and move within the Budapest area, whereas those with the lowest social status remain in the underdeveloped rural regions. Moving up the social ladder is very hard.” Social integration is closely linked to labor market integration. Therefore, it is even more crucial to provide incentives for firms to invest in the countryside, which would then help a developed business culture spread. Speakers noted the lack of readiness of Hungarian workers to move for a job to a different region inside the country, although it was admitted that ever more are eager to move abroad instead.

AND THE WINNER IS... The conference was linked to the ceremony for the Women of Excellence Award 2013, with the focus this year on entrepreneurism. The award went to Réka Porst who truly has a diverse background: whilst holding a degree in traffic engineering and HR, she has experience in leather handcraft and caving. She runs, an online market place for handcrafted goods where makers can sell their hand−made products to more than half a million online visitors per month. Porst is also raising three children, which must have been a factor in tipping the balance in favor of her. Victory in this competition is unimaginable without having the ability to reconcile family and work, and so serve as a role model for fellow women in society.


2Business insight

A SELF-MADE WOMAN Réka Porst achieved her business breakthrough in 2008 by launching meska. hu, an online marketplace for handcrafted goods, together with friend and artist, Borbála Hídvégi. Prior to her own enterprise, she worked as a traffic engineer and project manager. She is also a qualified caver and leather handcraft specialist. Réka speaks Spanish and English and raises three children.



What does ‘meska’, the name of your website, mean? It stands for the Hungarian abbreviation of “all products here are unique and self−made”, but that’s rather an ideology made up subsequently. We definitely wanted to refer to the Hungar− ian acronym ‘sk’, meaning ‘self−made’, and use its phonetic version (‘eská’). Then ‘m’ was added to make it sound nicer. Now we have so many users that a whole new verb, ‘to meska’, has been coined, which describes any activity pur− sued via our portal.


Do you know who nominated you? It was a glass artist market− ing her goods via us. I found out only because she asked for a CV, so she had no choice, but to reveal her plan. We grew so close that she published a book on glass beads with my business partner.


Did victory catch you by surprise? The nomination itself already did! The best thing about it is that I

finally can point to the statue and tell my children: that is how mom’s work got rec− ognized. They only see that I am on the phone or the computer. They need physi− cal evidence. In a way, so do I, as it’s very hard to define what I do exactly.


What is so difficult about it? I tend to joke that if I go on vaca− tion nobody would notice. With my duties being too complex, I can’t really real− locate them and I need to work in a concen− trated way so that everything continues to run smoothly in such periods as well. The same does not apply to my partner who deals with customer relationship, a concrete set of tasks. I connect everybody with each other in the business, I do marketing and I have the final word on site development issues.

WELCOME TO THE CLUB! The Women of Excellence Award has now turned four years old, and each year has highlighted a different themes. Here are the previous winners: 2012 2011 2010

Young Achievers: Szilvia Gyurkó, advocacy director of UNICEF Hungary Excellence in Leadership: Ildikó Szűts, communications director and chairman’s advisor, OTP Bank Excellence in Work/Life Balance: Csilla Vizvári, CEO, IRMÁK Kiemelkedően Közhasznú Nonprofit Kft.


Photo: András Hajnal

Réka Porst, an entrepreneur running online handcraft marketplace won this year’s Women of Excellence Award run by the American Chamber of Commerce in Hungary. She’s very happy that she has made her family proud and encourages women to be more self−confident.


In what way does user friendliness materialize? We wanted to avoid having an ordinary web shop. We intended to create an ambience like you are in a mall window−shopping with no clear idea of what you want to buy. There are categories, yet they are designed to offer an almost endless number of search options. Content can be searched by applied technique such as woodcarving or if you like an art− ist’s style you can check their favor− ites and pick something from that pool of items.


That adds to the special atmosphere of the web site. It is a world of its own, indeed! We try to engage our clients. The opening page features favorite products of a cer− tain customer that changes every hour. Under our gift search menu, they also have the chance to put together their own selection of endorsed goods.


You have widened your business scope by launching sister sites. got going in August where self−made food is sold. This grew out of a large demand, but we saw it fit− ted on to a separate interface. Another part of our portfolio is alkotokboltja. hu, which serves as a marketplace for handcraft material, accessories and related services. The latter accounts for about 30% of our turnover.


What do you think tipped the balance in favor of you in the award procedure? I heard that the initial consideration was to favor candidates having companies with impressive business figures in terms of rev− enues and staff. When the jury came across my file they had to reevaluate their concept. Meska is a micro firm, employing only seven or eight people. What mattered after all was the number of people our activity reaches out to, and the fact that we help so many make a living by providing a marketplace.


Women in Hungary need a lot more encouragement than in countries where gender equality has a higher profile. Is the situation improving here? Self−confidence is what women are short of in our country. More of us should believe in the fact that gender cannot be a hurdle to accomplish goals. Women with kids have an especially hard time on the labor market. So this pushes them towards entrepreneurship. However, self−aware− ness plays a role here since running a busi− ness does not suit everyone.


It suits you undoubtedly, that is how you won the prize. I love facing the unknown; it energizes me in my daily routine. I am honored by the award, but I somehow feel that those 3,600 handcraft artists represented on Meska should be in the spot light instead. They are the true achievers.


2 Business

Budapest Business Journal | Nov 29 – Dec 12

CAN A LAW SPEED UP LATE PAYMENT? Creditors’ lack of awareness of their rights and regulations has prompted the European Commission to launch a campaign on late payment legislation. Last week, the event arrived in Budapest where credit managers and state officials discussed the Hungarian situation. ZSÓFIA VÉGH


ENERGY MEETS INTELLIGENCE electric midi buses in Hungary. Besides the well-known environmental Dr. László considerations of zero harmful Ludvig emissions, these e-buses can be SIEMENS HUNGARY, charged with fluctuating current. While Head of the Infrastructure andthis may not seem very significant at and Cities Sector first, a deeper look at the matter shows the issue to be huge. he global thirst for energy is Fluctuation is an unavoidable aspect growing every day, calling of renewable energy sources, which for new capacities to be is also one of the major arguments added to the system to against them over fossil fuels. In meet the need. This often relegates practice this means, a cloud cutting environmental considerations to the sidelines, even though the ability to use off solar power, or insufficient wind to turn the turbines. The adaptability the energy, which is already available, of the chargeable electric vehicles in a smarter fashion could go a long means they can accommodate these way to meet this demand and also variations, something that is good to reduce stress on the environment. for the environment and is also of Hungary has numerous obligations in significant economic benefit thanks this respect, one of them being the to the advantageous effects on the ‘20-20-20’ target which sets three main energy grid. objectives for 2020: a 20% reduction As smart grid technology adoption of greenhouse gas from the 1990 level; grows rapidly, vendors are continuing raising renewable energy to 20% of to compete for a share of the total output; and a 20% improvement billions that will be spent globally in energy efficiency. There is plenty of by utilities on initiatives. Siemens is progress that still has to be made. one of these suppliers with nearly When it comes to energy, being a complete smart grid solution smart makes all the difference. While portfolio, expertise in transmission and Hungary’s demand is steady and is distribution automation, proven market expected to rise, the construction success, multiple deployments and of power plants, regardless of the clear business cases. For example, technology employed, has stopped Siemens has recently modernized and completely, the last one being years automatized the electrical system of ago in Gönyű. the Central Vermont Public Service, If there isn’t any new power coming, which provides power to approximately we will have to be more efficient and 160,000 customers in the United States. smarter in how we use what is at our disposal. At Siemens, we have realized A new advanced metering infrastructure and meter data management system this and structured our divisions to be were set up, broadening opportunities able to focus on energy efficiency. Buildings, for example, are responsible for customers: shaving peak load, offering time-of-use rates and for two fifths of the whole world’s providing customers with options for energy consumption. In order to direct load control. reduce this, Siemens offers solutions Being committed to a smarter way of that optimize the use of the available energy consumption, we are ready to energy in the household and in adapt other modernization projects like infrastructural settings. In industry, that in Vermont or other U.S. cities for energy can be saved by efficient Hungary. Because when talking about technologies, by advanced control energy, it always comes to the point techniques for production processes, that in order to stay successful we have down to the point of assuring that a to adapt and transform our business motor, fed by an inverter, is running models and technologies, and develop with lower energy consumption. new ways of thinking. Transportation is another area of


lawyers or debt collectors. Intrum Justitia Kft, a subsidiary of the international credit management firm of the same name, has handled 16,000 cases from the B2B sector and 500,000 cases from the B2C segment in 2013. The firm has 700 B2B clients, mostly multinational firms or Hungarian enterprises that have leaders with a multinational background. Many of their 100 B2C clients come from banks, telecommunication and public utility companies. Whether they can successfully recover a debt depends, in great part, on the creditor. “The receivable’s status, age and amount will define how much we can retrieve,” explained Péter Felfalusi, managing director. The approach towards debt handling varies with company size and finances. Large firms don’t hesitate to turn to the courts: legal costs and lengthy procedures don’t deter them. Smaller firms already in debt may wait longer. In a regional comparison, the action these firm take to survive while waiting to be paid differ in priority from their European counterparts. While European firms actively pursue accounts receivable and negotiate longer payment terms with suppliers, Hungarians first cut overhead and other costs. They also delay accounts payable later. SMEs are at most hazard of bankruptcy. Europe−wide, defaults have lead to 450,000 job losses and caused liquidity problems for 57% of enterprises, a 10% rise on previous years. In Hungary, firms will see 4% of their revenues disappear due to delays. Last year, the amount of late payment in the EU was €340 billion, double the amount of its 2012 budget. If enforced, the adopted EU rules may improve payment discipline in Hungary. But there is more to it: stricter rules for starting a company, larger buffer amounts for cash−poor periods, and transparency. A better economy wouldn’t hurt either.

development that promises numerous environmental benefits. Apart from its broad range of electrical vehicles for public transport, as a pioneer of the industry, Siemens has already showcased its own mass produced


In the building sector, timely payment is as rare as a cold day in LA. Contractors and subcontractors often go months or even years without receiving a paycheck. In early November, an insulation company at Ádánd, a township near Siófok, turned to the court over an unpaid job it delivered to the local government. Tibana Kft insulated the local school’s roof in July, a job it won via a tender, but has seen no payment since. As the Ádánd authorities refused to pay, citing quality issues, the case is currently on the table of the Compliance Verification Experts Body (TSzSz), an organization set up by the government to break chains of debt and accelerate late payments in the sector. TSzSz’s expert opinion will weigh in the court’s decision but it can’t guarantee payment either as the local government is already in heavy debt. Public authorities are usually the worst debtors in time terms. This is not a uniquely local trait; in many European countries it is the state that takes the longest to pay. Even with EU legislation introduced in 2011, which set an obligatory payment period between the public administration and businesses (PA2B), delays are frequent. The rules are simple: every authority must pay 30 calendar days after it receives the service/ goods procured. In exceptional cases, a maximum of 60 days is allowed. That 30 day period is ambitious, to say the least. In 2013, the average payment duration in commercial transactions with public authorities is 55 days (25 days of delay) in Hungary. That compares with a 61−day EU average where Nordic countries are on top (Finland 24 days, Norway and Sweden 34 days) and the south is at the bottom (Greece 159 days, Italy 170 days). Between businesses, commercial transactions cover an average of 43 days in Hungary. The country is below the 49−day European average, ahead of Italy (96 days) but behind Germany (34 days.) Figures in the B2B sector are slightly better, but businesses are not shielded against late payment either. Rules binding public authorities in this sector are optional. In the absence of a contract, a 30−day deadline should be set. With a contract it can be extended to 60 days unless otherwise agreed by the parties and provided it is not grossly unfair to the creditor. Enterprises are entitled for interest for late payment (ECB reference plus at least 8%) and recovery costs. With a contract, it is easier to enforce receivables. Even so, creditors turn to



10 2Business

Budapest Business Journal | Nov 29 – Dec 12

ON THE RIGHT TRACK NNG is the archetypal Hungarian startup success story of a GPS solutions provider becoming the undisputed global leader in personal and automotive navigation services. The Budapest Business Journal spoke with company president David Wiernik about avenues the company can still explore, NNG’s insistence on having a Hungarian base, as well as his recent accolade for advancing bilateral relations between Hungary and Israel. GERGŐ RÁCZ


You have just been awarded the Officer’s Cross of the Order of Merit of Hungary. What’s the story behind this recognition? A: I am deeply honored by the decoration and I take it as a clear message that we need to keep doing what we have been doing. We will need to continue promot− ing cooperation between Hungary and Israel, to spread the stories of successful startups, and to bring best practices that can be duplicated directly and are almost a guarantee of success.


Hungary’s government seems to be only just coming to terms with the whole startup phenomenon. What are your impressions about central drives to support such initiatives? A: I speak to a lot of officials and what I see is that they really do care. I don’t want to get into politics, but what I see as the main effort is to make Hungary a power nation in the field of startups and that is by no means a far−fetched idea. There is a lot of talent here. For instance, math education is, in my opinion, the best in the world. Engineering is also excellent and peo− ple are very smart. What Hungary lacks is marketing abilities and the necessary communication skills. This is where Israeli experience comes in handy, since similar models can be duplicated in Hungary and can serve as the basis for success.


For a startup founded today in Hungary, would you advise building yourself up locally or going straight to other countries where the startup culture is more established, taking the route most internationally known Hungarian startups have followed? A: If you have the necessary talent, I would advise you stay in Hungary. In other countries you immediately have intense competition to deal with, there are different mentalities and cultures you have to understand, whereas here you’re at home. The other important aspect is

David Wiernik was educated in engineering, economics, psychology, and business administration. Among his many business pursuits, he worked as a senior airline captain, yacht skipper and scuba diving instructor. Using this experience, he played a role in defining the characteristics of GPS navigation in the aviation industry, and then in the navigation industry. As the co-founder and president of NNG he has successfully led the company to become one of the most influential software providers in the global automotive industry. not to have your eye on an exit from the start, even though many do, since that’s the formula for failure. You have to think with vision, think for the future; eventu− ally the money will come.


Where does the money come from? Can a startup go to a bank seeking financing given the state of the financial sector? A: A startup is a dream, requiring pre− dominantly talent above all else. A startup doesn’t take a lot of investment because it doesn’t need infrastructure like an oil com− pany, for instance, that calls for extensive spending. I think there is an understating of this now and financing is accessible.


How is the 2013 business year turning out for NNG? A: Better than expected, we are well over our revenue target. Over the past years, we’ve doubled the company and by 2018, we are going to triple it. We currently employ more than 500 peo− ple but there will be another 100 to 200 coming over the next few years. We are examining the opportunity to establish a new development center, also in Hungary. Since we are facing a competitive environ− ment in Budapest in terms of recruitment, we will also be setting up new offices in other cities in the countryside.


What are the main directions of technological advances that you are exploring?


A: We first made the leap in 2008 when we went from personal navigation devices to the automotive market because we believed that the market would dry out thanks to the availability of free naviga− tion apps. The major players had different goals in this segment. Google only wants you to use its search engine and will give you a whole load of applications for free. Apple only wants to sell its hardware and doesn’t care about software. In contrast, carmakers have to provide quality to their customers in all areas, which is why we became the market leader in preinstalled navigation. Besides proven navigation solutions, we introduced a new standard: low cost and ultra low cost navigation to the automotive industry. There is already hardware in produc− tion that will be on the roads in 2014 with our new, revolutionary NavFusion feature. This allows people to link their smartphones with their cars’ navigation device to form a complete infotainment system, also enabling seamless map− updates. For the next revolution after that we plan to develop cars’ infotain− ment systems to accommodate all the different connection methods coming from all the different manufacturers that they said couldn’t be done. We did it, and this too will be out in months.


Which companies does NNG compete with today? A: We are the only one on the market that offers these services to the

manufactures with full customization and flexibility depending on customer demand. After we started, manufactur− ers started coming to us. Most of the old competition disappeared, folded or got bought out. We currently control 26% of the global line fit navigation indus− try, and 65% of the aftermarket segment for navigation devices. We are aiming to increase that to 40% and 80%, respec− tively in the coming years.

BACKGROUND David Wiernik is the co-founder and president of NNG and Honorary Consul of Hungary in Tel-Aviv. For his activity he was awarded the Officer’s Cross of the Order of Merit of Hungary on November 18. Wiernik was recognized for his successful work increasing the HungarianIsraeli economic and diplomatic relationship, supporting the Embassy of Hungary in Tel-Aviv, and his outstanding performance in the field of promoting a positive image of Hungary.


3Special Report Gods of the coupon arena


RETAIL Looking into several sub−markets of the retail sector, the Budapest Business Journal takes a stroll into the world of high−street fashion and luxury brands, picks the home improvement segment to pieces, and tries to find the best deal on the coupon market.

Ailing home improvement market





Budapest Business Journal | Nov 29 – Dec 12

GODS OF THE COUPON ARENA The deal−of−the−day sector is booming, and its top three players are successfully holding onto their positions. The business model is being transformed, however, and products are now providing a larger share than previously from the offers. Currently, they are the gods of the coupon arena.



Daily deals portals may turn into online discount stores soon ■ Products are getting more popular among offers that have thus far predominantly featured services

That should make it easier to browse product and fashion offers.” Such a development is attributed to the consolidation of the market, although Gábor Kalovits, CEO of Kupon Világ, the second− placed competitor in the deal−of−the−day race, however, doesn’t confirm the trend. “I LEVENTE HÖRÖMPÖLI-TÓTH don’t believe that the leading daily deals sites would undergo such a transformation, but “We are taking steps in that direction. Apply− it’s true that products are gaining ground in ing the shopping cart was among the first sales,” he says. Regardless of alleged or real business signs, and our product offers are growing in numbers too. The introduction of the home model transformations, the first three quar− delivery option also demonstrates that we ters in 2013 show impressive figures. The have started down that road,” says Richárd total number of coupons sold hit 736,000, Schmidt, Marketing Director of Bónusz generating turnover of some HUF 4 billion. Brigád, the market leading coupon firm in Hungary, commenting on speculation about NEW DARLINGS OF PERFORMANCE whether the largest players are turning into The new darlings of the coupon scene are discount web shops. “Our brand−new home undoubtedly products, the growth of which page will be structured along the lines of contributed considerably to the handsome such online stores by incorporating a side bar revenues. Whereas they were barely pres− menu covering all the well−known categories. ent a year ago, in 2013 they accounted for

THERE CAN BE ONLY…THREE The Hungarian coupon market is headed in one direction: consolidation. Since the launch of Bónusz Brigád three years ago, companies have popped up by the dozen, applying the same basic idea. By now there are around 20 that can be identified, but only three or four can make a decent living, a recent survey of GKIeNET, a consultancy concludes. For one, coupon firms are running out of small businesses they can make contracts with. Many clients have also had enough of the game. While they gave heavy price-cuts in the hope of recruiting repeat customers, most of the discount hunters proved to be price sensitive deal-seekers who are interested only in saving and hop on to the next offer. It has taken a while here for businesses to realize what the scheme is meant for; its purpose is, most of all, to get inexpensive publicity with a large audience. Companies abroad have come to terms with the substance of the deal and they use such campaigns to build brand loyalty with the help of cheap advertisement or to quickly sell surplus inventory. In Hungary, the war for the VIP boxes is apparently over. The top three market leaders, Bónusz Brigád, Kupon Világ and Napi Tipp cover around 80% of sales. Not even media heavyweights like Sanoma could change the pattern. It was forced to quit its coupon operation after just one year, having failed in meeting the most important criterion in this business: creating a fan base. Bónusz Brigád, which alone rakes in nearly half of all the market revenues, explains its success with a strict HR policy. It selects the right person for each position even if it takes months. It also spends a lot on development. Their new web site, scheduled to go live soon, features a mobile-optimized system and the size of their “physical” store has been doubled. Main rival Kupon Világ sees no reason to join forces to form an alliance against the advance of Brigád. “We are not planning a merger with other market players, we would like to go our own way. We want to serve our large customer base, providing the same high quality as up till now, and to maintain our level of commitment towards our distinguished business partners,” Kalovits insisted.





Value share of all sales

Share of no. of coupons sold

43% of overall gift certificates sold, com− pared to the 57% taken by services. Another fascinating estimate is that, in the case of Bónusz Brigád, products are projected to surpass even the travel, which has thus far been the largest revenue−generating cate− gory by far, by Christmas. “The leading product groups are subject to seasonal fluctuations,” Kalovits said. “ Some remain popular at all times, such as kitchen appliances, mobile accessories and gift items like jewelry. “ GOING WIDE Bónusz Brigád is striving to grab the atten− tion of users by offering premium fashion labels, self−imported products and items that have been unknown to the public. It also offers exclusive mobile telecommuni− cation offers, unique in the coupon world. In parallel with the rise of the prod− ucts, daily deals sites continue to widen the scope of targeted discounts. So if you are no longer turned on by the temptation of buying a wellness weekend at Lake Balaton at a 60% discount, Miami cruise trips are there to talk you into placing your order. Theme trips increase variety, from the Bavarian Oktoberfest to Christ− mas fairs in Vienna, and exotic novelties

such as tattoo removal and pole dancing courses, add to the choice. GIVE US THIS DAY OUR DAILY DEAL Despite of lucrative turnover, there is still further room for improvement at the top of the sector. Take the overrepre− sented age group of 18−49 year olds. You can argue that, for practical reasons, the young are more likely to go for online ser− vices in general. But indirectly, certain gift certificates do end up with the oldies since the members of the younger genera− tion buy them for their parents. Other dis− counts expressly target the 50+ crowds. Vitamins or wellness packages with age− specific extras work well. Men should be dragged into the voucher circle to a greater extent too as 70% of reg− istered users are female. Men are being tar− geted with messages aiming for their weak spots: football and electronics. Tablets and GPS devices do the job according to the experience of Bónusz Brigád. Kupon Világ, in turn, bets on events by linking city vis− its to Madrid and Barcelona with tickets for Real and Barca games. If the latter was the only achievement of the deal−of−the−day sector, its existence is already a gift in itself.


No. of offers posted





100000 1,892 925

0 Bónusz Brigád

Kupon Világ

Napi Tipp


3 Promotion

Budapest Business Journal | Nov 29 – Dec 12


THE FUTURE IS IN MULTI-CHANNEL SALES THE NUMBER OF WEBSHOPS IS ON THE INCREASE IN HUNGARY TOO The Internet, social networks and developments in mobile technology have dramatically altered the ways in which manufacturers, dealers and brand owners can get in touch with their customers. Additionally, customers prefer products which never disappoint them and about which they have all the necessary information at the time of purchase. At the end of last year, Brandbank, a company present in many European countries and specializing in the online sale of goods, established its subsidiary in Hungary. We talked with Péter Kurucz, the country manager. IN YOUR VIEW, WHAT ARE THE MAIN DRIVERS FOR ONLINE TRADING?

A: If we see where domestic online trading stands at the moment, the trend is clearly upwards, even steeply upwards. With the growth of the Internet, quick and convenient forms of shopping are also bound to develop, and as a result, a large number of customers will be making use of online shopping opportunities in the field of daily consumer goods. This means that both manufacturers and dealers need to devote much more attention to this area, since even many big companies are only beginning to take the first steps in this direction. According to data published by market research company eNet, 1.6 million people made at least one purchase online last year, and the total turnover may come close to HUF 177 billion this year, about 14% higher than the HUF 155 bln recorded last year.





A: Brandbank started operations as a true pioneer in online trading 14 years ago in the United Kingdom. Currently, it manages 300,000 items of digital product data for close to 6,000 companies in its product catalogue, making them available to any trading partner operating an Internet shop. Due to the rapid growth in online and mobile purchases, it is extremely important to ensure that customers can instantly find the information they are looking for. This is key in today’s rapidly developing, ‘gadget-friendly’ world. The most important aspect of Brandbank’s activity is the creation of virtual product information for actual, physical products. A: Our company is engaged in preparing, managing and distributing digital product information. This perhaps sounds a rather sterile definition so to make it clearer, let’s look at it both from the point of view of customers (B2C) and of business partners (B2B). When looking at it through the eyes of online customers, the service provides them with the same experience and information during a ‘remote purchase’ that they would get in the actual shop. If we see ourselves from the standpoint of dealers and suppliers, our company has a ‘product database’ that collects the product information of manufacturers and transfers this data through a single-channel model to the ‘data consumers’ who require such information, that is, primarily, to dealers operating a webshop. WHAT IS SAFEBRAND? As a result of the cooperation between Brandbank and GS1 Magyarország, the product information recorded by Brandbank can now be accessed via mobile phones as well. Introduced this year, SafeBrand is a free mobile application that can easily be installed on smartphones (iPhone or Android) without the need for registration. Using the application, the user just needs to read in the barcode on the product and it immediately displays all the information available for that particular product on the screen. The service also makes it possible for the manufacturer to directly address customers and provide them with information that cannot be displayed on the product itself and which, therefore, had to be provided by additional marketing tools (e.g. in-store means) so far, separately from the product. Brandbank supplies the service provider GS1 Hungary with high-quality product information.

Péter Kurucz, country manager of Brandbank Hungary Kft. Prior to his current position, Kurucz had worked for various IT companies in a number of executive positions for nearly a decade. He led Siemens’ integrated telecommunications services business for six years, and then worked as an investment manager at an information technology risk capital fund. In the last five years, he was responsible for the EPC and RFID areas as well as for the customer (B2C) and mobilecom businesses at GS1 Magyarország as senior expert. Kurucz, 39, graduated from Szent István University, Hungary. He speaks excellent English and German and his hobbies include football and kettlebell.

However, once we have a place where we can make this product data available in a concentrated, up-to-date and comprehensive manner, there are a lot of internal processes that we can optimize too. For example, we can use it for POS locations or any other creative materials. Thus, Brandbank is offering an online service that makes it possible for us to display the digital product information of manufacturers on dealers’ digital shelves, and in this way to reach the customers.



A: Brandbank’s most important international trading partner is Tesco, but this autumn G-Roby, Shopline and CBA also began to upload pictures and product information from Brandbank’s database to their webshops. This enabled us to create the first multi-channel sales model in Hungary, which ensures that the data gets to dealers from a single source – suppliers’ product catalogues. It is also important to note that the EU requirements for online trading will change as of December 13, 2014 (1169/2011, Article 14). As of this date, products bought on the Internet should bear the same information as in stores; in other words, the Internet buyer should not be at any disadvantage just because he cannot hold the product in his hands prior to purchase. Therefore, there is a lot of unexploited potential in online sales, and I hope Brandbank will be an exemplary business in this field on the domestic market. I also think it is important that many of our partners have understood our message that if they believe in online sales and their own brand, they should believe in our service too. (X)






Budapest Business Journal | Nov 29 – Dec 12

UP THE HUNGARIAN CHAMPS-ÉLYSÉES Andrássy Avenue has always been a major thoroughfare of luxury and elegance in Budapest, with spectacular neo−Renaissance town houses, palazzos and upscale apartment villas. It is no surprise that the avenue today attracts a large number of luxury and premium brand retailers, flagship stores and gourmet restaurants.



Photos: Il Bacio di Stile

“The first luxury retailer to open a store on Andrássy was Ermenegildo Zegna in 2005, with a real breakthrough happening in 2006 when Louis Vuitton opened its flagship store next to the Opera House,” writes Benjamin Perez− Ellischewitz, investment director of Jones Lang LaSalle in his analysis titled ‘High Street Retail in Budapest’. Since then, the stores of the great fashion houses have been appearing one after the other along the inner section of Andrássy Avenue: Burberry, Gucci, Zilli, and Dolce & Gabbana soon followed the two trailblazers. In terms both of size and elegance, the ‘non plus ultra’ of lux− ury stores today is the recently opened Il Bacio di Stile, a 5,000 sqm multi−brand department store. Il Bacio opened in a national monument building, originally a luxury residential palace, refurbished in a most elegant fashion, harmonizing the historic interior with superb solu− tions of modern design. Perez−Ellischewitz says he can



see two potential paths of develop− ment for Andrássy Avenue as a fash− ion street. One points in the direction of artisan luxury shops such as those of watch manufacturers Breitling or Franck Muller. The alternative is the appearance of giant stores, where one brand buys an entire building and con− verts it into a multi−storey depart− ment store. In terms of size, the Pari− sian Department Store at Andrássy 39 could be added to the second category, although in that case the conversion has restored the building to its original function (the Parisian was constructed as a purpose−built department store in the early 1900s). The opening of an old−new five star hotel will certainly further enhance the luxury character of Andrássy’s inner section. After ten years laying vacant and several ownership changes, the purchase of the former Ballet Insti− tute, originally the Drechsler Palace at Andrássy 25, was recently announced by Zara Hotels; the new owner is intent on refurbishing the prominent build− ing opposite the Opera House as a 198− room luxury hotel. THE SHADOWY SIDE OF THE LUXURY STREET If one takes a stroll on Andrássy Ave− nue, however, one can observe a con− spicuous number of vacant stores. “The vacancy rate of Andrássy Avenue retail− ers is fairly high; in October 2013 it was 12%,” notes the Jones Lang LaSalle report. The inner section of the avenue houses 105 retail units. Of these, 13 were vacant last month. More impor− tantly, there is a heavy fluctuation among the occupants. “A few brands that entered Andrássy Avenue did not meet their turnover expectations and decided to exit – either the lux− ury street market or the entire Hungar− ian market,” the manager of one of the

recently closed stores told the Budapest Business Journal. “Brand stores often change neighborhoods,” the manager added. MaxMara, for example, closed its boutique in Andrássy Avenue, and reopened in Deák Ferenc Fashion Street in a space refurbished by star architect RETAIL RANGES ON ANDRÁSSY ÚT Unit size (sqm)

Rent (€/sqm/month)

less than 50






more than 500


Erick van Egeraat. As Perez−Ellischewitz writes, the Budapest high street market can be divided into three segments: luxury, premium, and mass categories. The three types of stores tend to be spa− tially separated, concentrating in three distinct zones: the luxury brands on Andrássy Avenue, the premium brands in the Fashion Street section of Deák Ferenc Street, and the mass brands on Vörösmarty Square and the adjoining Váci Street. The high degree of fluc− tuation along the high street end of Andrássy Avenue suggests that some stores may eventually find the other two zones better fitting for their profiles. “Interestingly, although Váci Street and Vörösmarty Square are mainly occupied by mass brands, the high− est rental levels are recorded here,” Perez−Ellischewitz writes. The analy− sis explains the very limited number of vacant units – a mere 5% vacancy rate – by the fact that the above locations offer a high number of smaller−size units that are hard to find in Andrássy Ave− nue and Deák Ferenc Fashion Street. “Because of the typical Hungarian shop−

György Gattyán, one of Hungary’s richest persons, acquired his fortune from operating web pages that offer adult entertainment online. By opening his stylish department store Il Bacio di Stile on Andrássy Avenue, he may have had the aim of ennobling his original reputation. “Money does not matter at this investment,” the businessman who owns threequarters of the HUF 5 billion investment declared. To be sure, he does not expect short-term returns from his money. Tamás Magyari, the minority owner of the enterprise, paints a subtler picture. “In the case of the luxury market, supply must not be dictated by demand. However, today’s supply seriously undervalues Hungarian customers.” Il Bacio di Stile opened its doors on September 8 this year. Magyari, as owner of the project, acted as a master franchise, in most cases, purchasing sales rights of as many luxury and premium brands as possible, including Giorgio Armani, Bottega Veneta, Lanvin, Valentino, Oscar de la Renta. As the LaSalle report put it, “without a doubt, the project became the most fascinating retail scheme in Budapest and most probably in Central and Eastern Europe”. ping habits, retailers in Budapest prefer to rent bazaar−size shops,” a store man− ager who declined to be identified com− mented to the BBJ. An ‘under positioned’ location can be just as disastrous for a luxury store as an ‘over positioned’ place for a mass brand. The Váci1 project, developed by ORCO on the corner of Váci Street and Vörösmarty Square, may be cited as a sad example of the ‘under positioned’ luxury department store. After a high− quality refurbishment, the building at Váci1 was opened in 2010, but it still stands vacant with the exception of its four ground−floor units.



Budapest Business Journal | Nov 29 – Dec 12


AILING HOME IMPROVEMENT MARKET Hungarian−owned MPF Holding is considering buying and recapitalizing the Hungarian subsidiary of German DIY retail chain Praktiker jointly with a Chinese investor, Zsolt Felcsúti, majority owner of the holding announced on November 20 this year. The purchase would concern all the Praktiker stores in Hungary, meaning 19 giant and two small retail outlets. Furthermore, MPF Holding said it would continue to employ the 1,200 employees presently working for Praktiker’s Hungarian subsidiary. ANDRÁS ZSÁMBOKI

It is not yet certain, however, that MPF will indeed buy Pratiker’s Hungarian retail chain network. “The financial experts of MPF are currently working on the auditing of Praktiker. The conclusion of the deal, however, depends on the trustee responsi− ble for the liquidation of the German par−


The Hungarian DIY market has shrunk by 40% since the outbreak of the crisis in 2008 ■ The five big competing DIY retail chains cannot all survive ■ The current strategy of Praktiker’s trustee is the sale of Eastern European subsidiaries piecemeal

ent company,” Zsolt Felcsuti, owner and CEO of MPF Holding said. According to Hungarian political daily Népszabadság, a number of German competitors are also showing interest in Praktiker’s Eastern European network of DIY stores. “MPF’s bid, however, is probably the most gener− ous of all, provided the trustee in bank− ruptcy is not planning to sell the entire Eastern European network of subsidiaries in one piece,” a source wishing to remain anonymous informed the Budapest Busi− ness Journal. Praktiker operates a total of 400 stores in 10 countries. Its attractive size is, however, overshadowed by the fact that the company has been suffering continual losses in recent years. Com− pared to 2011 when the company could boast a €555 mln profit, last year the company produced a €189 mln deficit. In the same period, turnover dropped by 10% to €3 bln.

THE SUITOR According to political daily Népszabadság, MPF Holding is planning to invest €10 mln (HUF 3 bln) into the Hungarian element of the Praktiker home improvement chain. The sale of Bricostore’s 15 Romanian stores this past spring may serve as a reference deal. Those stores together produced a €131 mln turnover in 2012 – in comparison, last year’s turnover at Praktiker Magyarország was €100 mln. According to the Bloomberg news agency, Kingsfisher paid €75 mln to the Bresson family, owners of Bricostore; compared to that, the €12 mln offered by MPF for Praktiker Magyarország is peanuts. However, the difference between the two DIY chains’ ownership structures explains Bricostore’s higher value. Bricostore Romania was the owner of 10 of its 15 stores. In contrast, Praktiker Magyarország owns only three out of 21 stores in Hungary. As a matter of fact, MPF Holding did also make a bid for the nine Hungarian Bricostores in spring 2012, but the Bresson family rejected their offer. MPF Holding is one of those rare cases among mid-size Hungarian companies of a family enterprise that is currently being managed by the second generation. Present CEO Zsolt Felcsúti’s father founded the company in the 1980s, prior to the political transition. After 1990, the firm began to grow organically. Zsolt Felcsuti took over management in 2000, then acquired FÉG, a gas heater and boiler manufacturer, as well as Widenta, a company noted for its production of emery machines. After that, he started to build an extensive international retail network that covers huge territories from Singapore and China through Romania and Germany to the United States. “We receive only about 40% of our revenues from marketing self-manufactured products. The remaining 60% is produced from selling the products of other companies. It is not worth the trouble trying to manufacture things at home in Hungary if they can be manufactured cheaper elsewhere,” Felcsuti explained.

THE DIY MARKET IN TROUBLE What exactly is wrong with Praktiker? How can it be possible that a mid−size Hungarian company with moderate resources hurries to the rescue of the Ger− man giant? The BBJ’s investigations sug− gest that it is not only Praktiker that is experiencing a hard time, but the whole DIY market in general. It is exactly this retail segment that has suffered the big− gest losses caused by the 2008 crisis, and this is especially so in Eastern Europe. “Besides the car and electronic appliances markets, it is the home improvement retail market that has shrunk to the great− est extent since 2008. Hungary, Romania, Bulgaria and Ukraine have been particu− larly hard hit,” a DIY expert wishing to remain anonymous told the BBJ. Turnover of construction materials and home improvement items plummeted by 25% between 2007 and 2012, according to the Hungarian Central Statistics Office (KSH). With the rate of inflation taken into account, the extent of the decrease would exceed 40% DIY retail chains in Hungary have all been loss−making in recent years, and Bricostore pulled out of Hungary last year. The after−tax losses at Baumax were even higher than Praktik− er’s last year; OBI’s operating cash flow was somewhat better that Praktiker’s, but it too has been suffered (see Table 1). CONFUSED ESCAPE STRATEGIES “Bricostore used to target the upper seg− ment of the DIY retail market. After the crisis broke, this proved to be a partic− ular disadvantage in Eastern Europe,” a DIY expert said. What made Bricostore’s situation hopeless, however, was the fact that its retail units, most of which were owned by the company itself, were bought with bank loans, and the com−

pany was therefore burdened by signif− icant amounts of debt. During the cri− sis years, these stores were unable to produce enough operating cash flow to cover the repayment of their loans. “The Hungarian subsidiary of Praktiker is better off in this respect: it has a middle cat− egory price range, and it rents, rather than owns, 16 out of its 19 large stores,” added our DIY expert. The 30% decrease of turnover compared to 2008 has made reorganization necessary. According to the Financial Times Deutschland, Praktiker’s major shareholder the Maseltov Fund suggested that Praktiker AG, which concentrates all the stores operat− ing in Germany, should be strengthened with the help of the revenue derived from selling the Eastern European network of stores. “Sell− ing our subsidiaries in Romania, Bulgaria, Albania, Greece, and Hungary could bring Praktiker €50−70 mln,” Isabelle de Krassny, fund manager of Maseltov Fund told the FTD in March 2012. Later developments, however, sug− gest that this concept has been replaced by a different strategy. Praktiker Mag− yarország was recapitalized with HUF 2.2 bln, which even made it possible to open further two smaller (less than 1,000 sqm) stores. But as the result of the recapital− ization of some of its Eastern European subsidiaries, the German−based parent company itself went bankrupt. OBI and Baumax have both followed a different strategy. In both cases, the par− ent companies backed their Eastern Euro− pean subsidiaries with intra−corporation loans. “At the moment, Baumax and OBI seem to be the two big beneficiaries of the bankruptcy wave that swept through the DIY market. It is rather telling, however, that neither OBI nor Baumax has bought a single store from Bricostore’s network,” the BBJ’s DIY expert commented.




Budapest Business Journal | Nov 29 – Dec 12

Largest shopping centers in Budapest RANK

Ranked by net retail space COMPANY WEBSITE
































Âť  = would not disclose, NR = not ranked, NA = not applicable






3 200 1,600


É5.É'3pFVÉ5.É'*\ĹƒU Ă RKĂ D Szeged, FĂłrum Debrecen

1106 Budapest, Ă–rs vezĂŠr tere 25/A (1) 433-1400 (1) 433-1401

&XVKPDQ :DNHĂ€HOG.IW 1052 Budapest, DeĂĄk Ferenc u. 15. (1) 268-1288, (1) 268-1289 ZZZFXVKPDQZDNHĂ€HOGFRP

64,000 – 185,000

2 200 2,800

Peek&Cloppenburg, H&M, Zara, Media Markt, Libri, Tesco, Mango, Deichmann, Pull&Bear, Bershka, Stradivarius


1087 Budapest, Kerepesi Ăşt 9. (1) 880-7010 (1) 880-7070

129$,3,QJDWODQÂ ]HPHOWHWpVL.IW 1191 Budapest, Vak BottyĂĄn utca 75/a-c. (1) 919-1300, (1) 919-1320

59,000 7,000 200,000

3 150 1,600

Promod, Orsay, H&M, New Yorker, Intimisssimi, Calzedonia, +HUYLV2IĂ€FH6KRHV3OD\HUV Room, Humanic, Libri, MĂźller, Yves Rocher, Swarovski, Tschibo, Home Design, Euronics, 7HVFR2%,0HJDĂ€WQHVV


1191 Budapest, Vak Bottyån út 75/A–C (1) 919-1300 (1) 919-1320




7 330 1,200

Mango, Promod, Rossmann, dm, Salamander, Vodafone, UPC, Telenor


1024 Budapest, /|YĹƒKi]XWFD² (1) 345-8000 (1) 345-8005

:HVW(QG,QJDWODQKDV]QRVtWy pVh]HPHOWHWĹƒ.IW 1062 Budapest, VĂĄci Ăşt 1-3. (1) 374-6573

50,000 16,218 200,000

2 400 1,500

Mango, Promod, H&M, dm, Rossmann, C&A, CinemaCity


1062 Budapest, Våci út 1–3. (1) 238-7777 –

/XUG\+i]%HYiViUOypV Irodacentrum Kft 1097 Budapest, KĂśnyves KĂĄlmĂĄn krt. 12-14. (1) 456-1200, (1) 456-1209

47,500 47,500 95,000

4 100 1,350

Alexandra, MiMozink, dm, McDonald's, Burger King, KIK


1097 Budapest, KÜnyves Kålmån kÜrút 12–14. (1) 456-1100 (1) 456-1209

6&06KRSSLQJ&HQWHU0DQDJHPHQW.IW 1117 Budapest, Október huszonharmadika u. 8–10. (1) 372-7200, (1) 372-7201

46,600 7,000 118,000

3 150 1,200

Van Graaf, H&M, C&A, New Yorker, Zara, Marks&Spencer, Libri, Humanic, Intersport, Cinema City, Interspar, Best Byte


1117 Budapest, Október huszonharmadika utca 8–10. (1) 372-7208 (1) 372-7201

&XVKPDQ :DNHĂ€HOG.IW 1052 Budapest, DeĂĄk Ferenc u. 15. (1) 268-1288, (1) 268-1289 ZZZFXVKPDQZDNHĂ€HOGFRP

44,000 – 62,000

1 220 2,500

Tesco, H&M, C&A, Media Markt, Deichmann, Humanic, Dm, +HUYLV2IĂ€FH'HSRW/LEUL7DNNR Fashion, CCC


1152 Budapest, SzentmihĂĄlyi Ăşt 131. (1) 415-2114 (1) 419-4034

6pJpFp0DJ\DURUV]iJ.IW 1138 Budapest, VĂĄci Ăşt 178. (1) 577-1100, (1) 577-1101

43,470 11,166 90,270

4 200 1,600

Libri, H&M, Bata, dm, Converse, UPC, Unicredit

Alba Plaza, Debrecen Plaza, *\ĹƒU3OD]D.DQL]VD3OD]D KaposvĂĄr Plaza, Miskolc Plaza, NyĂ­r Plaza, Szeged Plaza, Szolnok Plaza, Zala Plaza

1138 Budapest, VĂĄci Ăşt 178. (1) 465-1600 (1) 465-1620

6pJpFp0DJ\DURUV]iJ.IW 1138 Budapest, VĂĄci Ăşt 178. (1) 577-1100, (1) 577-1101

32,400 3,400 65,000

4 150 812

CBA, MĂźller, Hervic, C&A, Promod, Mango, Reserved

Alba Plaza, Debrecen Plaza, *\ĹƒU3OD]D.DQL]VD3OD]D KaposvĂĄr Plaza, Miskolc Plaza, NyĂ­r Plaza, Szeged Plaza, Szolnok Plaza, Zala Plaza

1082 Budapest, Futó utca 37–45. (1) 977-7779 –

%133DULEDV5HDO(VWDWH=UW 1123 Budapest, AlkotĂĄs u. 53. (1) 487-5501, (1) 487-5542

28,600 18,600 48,200

3 110 1,230

Cinema City, Match, C&A, Reserved, Salamander, French Connection, Benetton, Gant, Michael Kors, Paulaner, Vapiano, Leroy


1123 Budapest, AlkotĂĄs utca 53. (1) 487-5501 (1) 487-5542

(XURSDUN%HYiViUOyN|]SRQW.IW %XGDSHVWhOOĹƒL~W (20) 800-0520, (20) 800-0520

25,600 – 30,500

2 65 1,000

Interspar, Hervis, Media Markt, dm, Deichmann, Douglas, Humanic, Libri, New Yorker, Takko, Mc Donalds, Vision Express

KorzĂł Shopping Center

2060 Bicske, Spar út – (20) 800-0520 (20) 800-0520

0DQKDWWDQ5HDO(VWDWH Management Kft 1032 Budapest, BĂŠcsi Ăşt 154. (1) 437-4600, (1) 437-4650

22,059 – 35,900

4 100 400

dm, Alexandra, HĂĄda, Interspar, Orsay, CIB Bank


1032 Budapest, BĂŠcsi Ăşt 154. (1) 437-4600 (1) 437-4650

Âť Âť

Âť Âť Âť

Interspar, Sunrise Fitness, Atrium EuroCenter Mozi, Orsay, Alphazoo, CIB Bank, MKB Bank, OTP Bank, Erste Bank, Bijou Brigitte, Blue Shoes, Gokart Ring, Telenor, Vodafone, T-Pont, Magyar Posta


1032 Budapest, BĂŠcsi Ăşt 154. (1) 437-4600 (1) 437-4650

$%/21,QJDWODQIHMOHV]WĹƒ.IW 1132 Budapest, VĂĄci Ăşt 30. (1) 225-6600, (1) 225-6601

11,400 – 12,260

2 7 420



1234 Budapest, BevĂĄsĂĄrlĂł utca 8. (1) 225-6600 (1) 225-6601

$%/21,QJDWODQIHMOHV]WĹƒ.IW 1132 Budapest, VĂĄci Ăşt 30. (1) 225-6600, (1) 225-6601

5,000 – 6,000

3 16 300

H&M, MĂźller, Deichmann, Yves Rocher, Bijou Brigitte, Triumph


1081 Budapest, NÊpszínhåz utca 3–5. (1) 225-6600 (1) 225-6601

WPR Nonus Kft 1095 Budapest, MĂĄriĂĄssy u. 7. (1) 451-4760

4,972 1,567 6,425

6 40 160

CBA Príma, OTP Bank, dm, OTP Travel, Neckermann – Thomas Cook, Líra KÜnyvesbolt, Triumph-J.PRESS, Bortårsasåg


1124 Budapest, Apor Vilmos tÊr 11–12. (1) 951-0578 (1) 201-6691

&XVKPDQDQG:DNHĂ€HOG.IW 1052 Budapest, DeĂĄk Ferenc utca 15.

Âť Âť

2 150 3,279


1222 Budapest, NagytÊtÊnyi út 37–43. (1) 424-3000 (1) 424-3001



ECE Projektmanagement Budapest Kft 1106 Budapest, Ă–rs vezĂŠr tere 25/A II. em. (1) 434-8200, (1) 434-8207

0DPPXW6]ROJiOWDWy=UW %XGDSHVW/|YĹƒKi]X (1) 345-8000, (1) 345-8005

0DJQXP+XQJDULD,QYHVW.IW 1032 Budapest, BĂŠcsi Ăşt 154. (1) 437-4600

68,000 3,500




This list was compiled from responses to questionnaires received by November 25, 2013 and publicly available data. To the best of the Budapest Business Journal’s knowledge, the information is accurate as of press time. While every effort is made to ensure accuracy and thoroughness, omissions and typographical errors may occur. Additions or corrections to the list should be sent on letterhead to the research department, Budapest Business Journal, 1075 Budapest, Madåch Imre út 13–14., or faxed to (1) 398-0345. The research department can be contacted at


4 Focus: Energy

Budapest Business Journal | Nov 29 – Dec 12



Serbia was the latest country to announce it had started construction of the South Stream natural gas pipeline, a project backed by Russian energy giant Gazprom. The news follows a similar announcement from Bulgaria at the end of October, while Turkey announced it would be launching work on its own territory in 2014. The pipeline is planned to be 2,385 kilometers long, realized in partnership with nine countries, including Bulgaria, Serbia, Hungary, Italy and Russia, and has already called for far−reaching agreements between national governments as well as private sector participants involved in the implementation. The total investment required would be €17 billion, and it will provide a total annual capacity of 63 million cubic meters of gas. It is planned to be up and fully operational by 2017. However, the European Union’s Third Energy package has raised concerns about the viability of the investment on legal grounds. Many of the numerous bilateral and multilateral agreements related to South Stream have come under scrutiny by the European Union on grounds that they do not comply with the package, which is meant to unbundle ownership of natural gas production and transmission, something that very much applies to Gazprom. PLEA FOR A WAIVER Gazprom and its partners in the venture from both the government and private sectors are hopeful that an agreement for derogation can be reached considering the weight and significance of the project. “Natural gas today represents the most important source of energy in the European Union,” said Alexander Syromyatin, deputy head of Gazprom’s project management department. “Demand in the near future will quickly overtake supply, because of the falling extraction capacity in Europe. The South Stream project will

South Stream on track to be realized, construction under way ■ Restrictions in the European Union pose obstacles

solve the problem of this deficit for the future,” he added underlining hopes of an agreement. The affected EU countries are aiming to intensify lobbying on the matter and to exert pressure on EU decision makers. “Slovenia’s discussions with the European Commission are extremely intense. Everyone should realize that Slovenia is part of the EU and it is in our interest to complete this investment project,” the country’s Minister of Infrastructure and Spatial Planning, Samo Omerzel said late October, reaffirming his government’s strong desire to participate. Hungarian Prime Minister Viktor Orbán recently met with his counterparts from Slovenia and Bulgaria, Alenka Bratusek and Plamen Oresharski, and one of the key issues they agreed on was continuing with coordinated efforts to push through legal rectifications that would allow the pipeline venture to progress. RIGHT ON TRACK Meanwhile, Hungary’s government is adamant that, although there have been no pipes installed thus far, the preparatory works along its stretch of the route are well under way and running at full speed. “The plan for the construction of the South Stream is unique among


Photo: Gazprom




the numerous ideas with similar goals as regards both the strong political support for it and the commitment of the participating companies. I am glad to establish that the preparations for the section of the pipeline in Hungary have proceeded at the right pace,” Development Minister Zsuzsa Németh said recently. With a view to accelerating implementation, the Hungarian government has declared the project

to be a high priority national economic investment, Németh said, also highlighting the need to coordinate attempts to achieve a resolution to its future. Németh urged “joint efforts so as to surmount the obstacles to the implementation of the project together, as soon as possible, work out a solution acceptable for all and aligned with the EU energy policy and establish close and permanent partnership”.

Photo: Gazprom

Nabucco is out of the picture, giving all the more impetus to its Russian−backed rival, South Stream. Construction is being launched in those countries involved, but Hungary and its partners along the route within the EU are raising concerns that the bloc’s energy regulations might possibly prevent the project.



4 Focus: Energy

Budapest Business Journal | Nov 29 – Dec 12

Universal electricity providers RANK

Ranked by total net revenue





















E.ON Hungária Energetikai Zrt (100) –

Balázs Lehoczki, Norbert Pál

1051 Budapest, Széchenyi István tér 7–8. (1) 472-2300 (1) 354-3890

Marie-Theres Thiell

1132 Budapest, Váci út 72–74. (1) 238-1000 (1) 238-2949

Zoltán Nagy, Tamás Karaba, Zoltán Dudás

1132 Budapest, Váci út 72–74. (1) 237-7877 (1) 238-2803

Jean - Noël Reimeringer

6720 Szeged, Klauzál tér 9. (62) 565-565 (62) 568-000

Marie-Theres Thiell

3525 Miskolc, Dózsa György utca 13. (46) 535-000 (46) 535-110




0DJ\DU9LOODPRV0ŝYHN=UW (15.63), Individuals (1.87) RWE mbH (55.25), EnBW (27.25)




%XGDSHVWL(OHNWURPRV0ŝYHN Nyrt (50), Észak-magyarországi Áramszolgáltató Nyrt (50) –


– EDF International SA (100)


Other (7.25), MVM Zrt (11.66) RWE Energy B mbH (54.26), EnBW AG (26.83)





»  = would not disclose, NR = not ranked, NA = not applicable

This list was compiled from responses to questionnaires received by November 25, 2013 and publicly available data. To the best of the Budapest Business Journal’s knowledge, the information is accurate as of press time. While every effort is made to ensure accuracy and thoroughness, omissions and typographical errors may occur. Additions or corrections to the list should be sent on letterhead to the research department, Budapest Business Journal, 1075 Budapest, Madách Imre út 13–14., or faxed to (1) 398-0345. The research department can be contacted at



MOL, JAPAN’S JSR TO JOINTLY ESTABLISH RUBBER PLANT IN HUNGARY Hungarian oil and gas company MOL and Japan Synthetic Rubber Corporation (JSR) have agreed to establish a joint ven− ture and set up a plant in Hungary to pro− duce rubber raw material for tires, MOL said on the Budapest Stock Exchange website. JSR will hold 51% in the joint venture and MOL 49%. The companies have filed for competition office approval, MOL said. The plant will have capacity to produce 60,000 tons of solution polym− erization styrene−butadiene rubber per year. A capacity expansion is also being considered and will be implemented in accordance with market demand. Sales are expected to start in 2017. TATABÁNYA TO CONVERT GAS HEATING PLANT TO BIOMASS The city of Tatabánya will convert its heating plant from gas to biomass in a project worth almost HUF 5 bln, mayor Csaba Schmidt and MP János Bencsik said. The city won a grant of more than HUF 1.5 bln for the project, which will be completed by the end of 2015. The plant provides the city with 1,150,000 GJ of heat a year.

CHINA NEW ENERGY GETS €72 MLN IN CONTRACTS TO BUILD TWO ETHANOL PLANTS IN HUNGARY China New Energy has reported the winning of €72 mln in contracts with Visontai Bioetanol Fejlesztő Korlátolt Felelősségű Társaság and Helvéciai Bi− ouzemanyag Termelö és Kereskedo Kft to develop two ethanol bio−refinery projects in Viscontai and Helvécia. CNE officials stated that designs for both projects have been completed. The Viscontai project is currently slated for completion by year’s end 2015 and to enter full commercial production in early 2016. E.ON RUHRGAS PLANNING TO PULL OUT OF BALTIC COUNTRIES Germany’s energy giant E.ON Ruhrgas has started to sell its holdings in three gas companies in the Baltic countries, where it roughly owns a third along with Gazprom, the Baltic Business News re− ported. According to the report, the en− ergy company is studying possibilities to sell its share in Estonian Gas. The Estonian government is not interested in buying E.ON’s share, the news site said, citing Ando Leppimann, deputy undersecretary of Ministry of Econom− ic Affairs. Co−shareholders Gazprom,

Finnish Fortum or Russian Itera could acquire E.ON’s holdings in the Baltic gas companies, the news site said. Gas con− sumption on the tiny Estonia gas market has been declining since 2007, falling 40% in 2011 alone to 630 million cubic meters, less than in 1994. At the end of October, the Latvian government dis− closed that it was talking to E.ON to take over its holding in Latvijas Gaze. RUSSIAN LAWMAKERS GIVE GREEN LIGHT TO OPEN UP LNG EXPORTS Russia’s lower house of Parliament on November 22 gave its fi nal backing to amendments opening the way for Gaz− prom’s rivals to export super−cooled gas by tanker to the fast−growing Asian market. Russia wants to double its share of the global trade in liquefied natural gas (LNG) to 10% by 2020, benefiting from Japan’s moves to switch away from nuclear power and China’s call to curb coal usage. The bill was passed in the last two of three readings by lawmakers in the lower house of Parliament. Pas− sage of the measure still requires upper− house approval and President Vladimir Putin’s signature to take effect in Janu− ary. In June Putin called for the gas ex− port laws to be eased to take advantage

of a window in the Asia−Pacific market before supplies begin from the United States, Australia and Africa. UKRAINE SET FOR DEAL WITH SLOVAKS TO CUT RELIANCE ON RUSSIAN GAS Pipeline operators in Ukraine and Slo− vakia are on the verge of signing a deal that will allow the European Union to ship gas through Slovakia to Ukraine, reducing Kiev’s dependence on Russia, the European Commission and Ukraine said on November 19. “We consider that we are very close to a deal... The content of the deal has been agreed, whereby the gas will flow from west to east through Slovakia to Ukraine,” Reuters quoted EC spokeswoman Marlene Holzner as say− ing. Ukraine’s Fuel and Energy Minister Eduard Stavytsky confirmed that the deal was about to be signed, Reuters said. The gas would be shipped by physical reverse flow, through existing, unused pipelines, plus a small section of pipeline to be built next year. Since late last year, technology allowing pipeline flows to be reversed has allowed Ukraine to re− import some Russian gas back from EU nations, notably from Hungary, and from Germany via Poland.


4 Focus: Energy

Budapest Business Journal | Nov 29 – Dec 12



A number of applications that were submitted to a European Union financing program may now finally become reality years later after the government announced it has successfully gathered sufficient state funding to allow the program to progress. “We raised the necessary funding, step− by−step or should I say forint−by−forint,” Development Minister Zsuzsa Németh told reporters in Győr. The official said that the campaign dubbed ‘Panel II’ will be sufficient to perform the necessary retrofitting of some 8,000 homes, many of which have had applications suck in the system since the suspension of the program in 2009 when state funding ran out. At the time, there was heightened interest for the program that allowed major and often long overdue overhauls of residential buildings, including the installation of better sealed doors and windows and more advanced types of insulation. Such measures are known to drastically reduce households’ energy consumption and thus have a significant overall impact on the environment, given that buildings produce the largest volumes of harmful carbon dioxide emissions. Németh said the ministry calculates that the resulting developments will reduce the apartments’ annual carbon dioxide emissions by 8,700 tons and their energy consumption by 41 million kilowatt hours. GREEN BUILDING JOBS

The continuation of the program is expected to generate HUF 9 billion in new orders for the construction industry, one of the eco− nomic segments most painfully affected by the crisis, and showing some signs of bounc− ing back only now.Builders had a tough year in 2012, with the Central Statistics Office (KSH) publishing negative growth for the industry in 10 out of the 12 months, with February dipping 15.1% on the year. In con− trast, 2013 has been all about growth thus far, with every month producing expansion. The latest figure (for September) shows a 9.3% annual growth, while the biggest leap of 14.6% came in August. The announcement reflects the govern− ment’s declared intent to support the con− struction industry, not only through state projects or subsidizing household initia− tives, but also through creating new financ− ing channels that could fuel private invest−


ANTI-VAT FRAUD MEASURES FOR THE ENERGY SECTOR The EU has launched stricter rules to tackle VAT fraud in gas and power trading, introducing Quick Reaction Mechanism and extending the scope of reverse taxation.


New funding has been allocated for subsidy program suspended in 2009 ■ Gov’t expects residential modernization to boost construction industry

Márton Hajnal


ATTORNEY-AT-LAW Gide Loyrette Nouel − d’Ornano Iroda

raud schemes evolve rapidly, ment.The construction industry still greatly giving rise to situations that needs the inflow of new funding; despite the growth this year, the percentages compare require a rapid response; the to a deplorable 2012 base and the industry largest VAT fraud in the EU is is nowhere near the boom seen before the the so-called missing trader intra-comLehman Brothers collapse, when financ− munity fraud, more commonly known as ing was still widely available and invest− ‘carousel fraud’, where supplies are rapments were plentiful both for households idly traded several times without the payand businesses. The association for promot− ing home construction (TLE) is urging new ment of VAT. subsidy schemes and argues that the gov− Combating VAT fraud is a topic of ernment should use funding from the Euro− extreme importance within the EU, as pean Investment Bank or the National Bank fraudulent activities – mainly of the above of Hungary to open funding options with type – are growing at an alarming rate, the specific purpose of covering the costs

Development Minister Zsuzsa Németh

of energy optimization. Theses wouldn’t be subsidies, but made available with favorable Internet conditions for long maturities. TLE also argues that Hungary should con− sider the sustainability of the overall stock of apartments. KSH says there were 10,560 new apartments built last year, meaning there are altogether 4.3 million of them in the country. The president of TLE, Zsolt Maráczi, cal− culates that if there were around 10,000 new apartments built every year, the current over− all stock would take 300−400 years to be fully replaced. It notes that there is no state con− cept that covers a multi−generational time span like that and especially not a strategy that would assure sustainability. There is currently a large number of build− ings throughout Hungary that are outdated, dilapidated and barely meet the legal crite− ria for functioning as homes. In such cases, the construction of new, sustainable housing would actually be a more cost−effective solu− tion then retrofitting, Maráczi warned.

both in terms of the quantity, and the industries affected. In order to fight more effectively against VAT fraud, the European Council approved the Council Directives 2013/42/EU on the quick reaction mechanism and 2013/43/ EU on the optional and temporary application of the reverse charge mechanism in relation to supplies of certain goods and services susceptible to fraud. The introduction of the new measures was welcomed by many parties active on the European electricity and gas market, including regulators, exchanges, brokers, clearing houses, transmission system operators, energy trading firms, utilities and guarantee of origin issuing bodies. The directives introduce two major legislative changes; one provides the possibility for member states to introduce the reverse charge mechanism (where the recipient of a supply is obliged to account for the VAT) to a series of specified goods, including electricity and gas, at national level. The second major legislative change creates a so-called ‘quick reaction mechanism’ that enables the European Commission to grant member states special derogations in case of major fraud attacks.

QUICK REACTION MECHANISM The aim of the quick reaction mechanism is that a member state facing severe abuses in any sector of its economy can initiate the reverse taxation mechanism concerning the given economic sector in the frame of an accelerated procedure, as recent experience has demonstrated that the previously available procedure was not able to respond quickly enough to requests by member states for urgent measures. As per the Directive, the requests of a member

state – in such cases the country concerned must provide the Commission with all the necessary information – shall be approved or rejected by the Commission within one month. The new practice of applying a reverse charge is expected to stop VAT fraud in the energy sector, however, since the quick reaction mechanism can only be a temporary fix pending longer-term legislative solutions with a view to making the VAT system more resilient to fraud, it should only apply for a maximum of nine months. SCOPE OF REVERSE TAXATION TO BE EXTENDED Besides the initiation of the above quick reaction mechanism procedure, the Directives extend the list of products and services regarding which reverse taxation can be initiated, for a period of a minimum of two years. Such transactions, beyond the sale of gas and electricity to resellers, include the sale of mobile phones, integrated circuit devices, videogame consoles, tablets, laptops, cereals and industrial plants (including oil seeds and sugar beet), raw or semi-manufactured metals, and telecommunication services. Nevertheless, member states can apply a reverse charge only in cases where the usual measures against VAT fraud are not effective enough. In extending the scope of reverse taxation, the long-term aim of the European Union is not to make reverse taxation generally accepted but to provide a temporary solution for the period during which the Commission sets out measures to make the VAT system more resistant. The above measures, therefore, are to be used only in reasonable cases and during a limited period, until the end of 2018, to repel VAT fraud. The Directorate-General for Taxation and Customs Union and the Council put forward the present legislation, which will, most probably lead to the list of transactions falling under reverse taxation in Hungary being broadened, including transactions in the gas and electricity sector.


The government has announced the re−launch of a suspended retrofitting program that is expected to optimize energy use for 140 communities that have filed for support. There are hopes that besides the environmental aspects, the grants will also serve as a boost to output in the construction sector.




5 Socialite

Budapest Business Journal | Nov 29 – Dec 12


5 Socialite COMPENSATE CREATIVELY Once long and lavish, incen− tive trips have been reduced to a necessary minimum. Travel organizers now need to come up with really creative plans to appeal to firms. Offering more for less also helps. ZSÓFIA VÉGH

Starting and driving a Trabant, especially for those raised on modern four−cylinder engines, is tricky. It can also be fun and unique, two criterion that don’t hurt when planning an incentive trip. On Novem− ber 5, in teams of two, the employees of a fashion firm got into the vehicles and followed a route that took them through some of the major sights of Budapest. The winner of the non−conventional trip was the team that captured each attrac− tion from the right angle and did not break any traffic rules. The organizer, Hungary Events, a com− pany that specializes in MICE tourism, has created several such events for com− panies seeking fun and excitement. They started off as a firm organizing bachelor parties in 2005. Since then, they have wid− ened the list and now arrange both leisure and incentive trips. In 2009, when the cri− sis reached them, the company stayed afloat thanks to leisure tourism. Incentive trips have suffered much from corporate travel budget cuts. The reason they are still around is simple: with numer− ous other employee benefits omitted/cut,

firms need to offer something to keep peo− ple motivated. So the trips have remained, but they have become shorter and closer to the firm’s office. Now 4− or even 3−star hotels will do for many. In return, programs should be unusual and memorable.

get but then often exceed it and spend on extras on the spot. Last November, Hungary Events organized a trip for 400 employees for a CEE fashion firm. The highlight of the program was when 150 people, dressed in black and white, holding neon umbrellas were perform− MOTIVATION ON A BUDGET ing a choreographed dance in front of Firms ordering incentive trips are incon− St Peter’s Basilica. Hungary Events cut sistent at bargaining prices, though. a short film of the dance, and also made When planning, they set a very low bud− one of the afterparty. “Initially, the man−



Médiatámogatók: klasszik rádió921

Marc Chagall: The Dance, 1950–1952. Centre Georges Pompidou, Musée national d’art moderne, Paris


agement didn’t want to pay for the second video, so we gave them a small resolution version for free,” explained Adél Honti, the firm’s managing director and certified incentive specialist. “Having watched it, they asked for a version they could use for marketing purposes.” The recession has further intensified the search for the best value for money. “Many firms try to avoid destination management companies (DMCs) and arrange trips


Budapest Business Journal | Nov 29 – Dec 12

Since 2010, Hungary Events has seen a 66% increase in the number of pro− posal requests. Of these, 40% usually end in actual assignments. “Before the crisis, groups arrived mostly from the West. Today CEE firms and Polish tour− ists groups are on the rise,” Honti said. The firm also noted a shift in indus− tries: earlier carmakers and banks con− stituted most of their clients, now IT and fashion has taken over; most come via intermediaries, agencies that are in contact with clients. With similarly nice scenery, what makes Budapest the chosen destination with competitors such as Vienna, Prague, Warsaw or more recently Bucharest and Zagreb? Compared to its counterparts, value−to−price ratio is one of the mayor UPS AND DOWNS assets of the Hungarian capital. Accord− How well this segment performs is hard ing to the calculations of Magyar Turiz− to assess. Certain markets experience mus Zrt, €1 spent on certain services in skyrocketing revenues following a bad Vienna is worth €2 in Budapest. As for spell, only to see them sinking again. Prague, guest reviews suggest that hotel Though there is seasonality in inbound rates, basic− and medium−level services travel, Premium Incoming says it has not and catering are of a better quality in experienced any downturns. The Hun− Hungary. Another big draw for Budapest garian office has produced a two−digit is that its uniqueness hasn’t faded yet, increase in the past four to five years, Jávorkai believes. (This is also partially with earnings reaching HUF 0.5 billion due, he says, to the fact that the city is last year. The firm’s caters to groups from 10−15 years behind in tourism develop− Northern Europe, Spain, Latin America ment terms). “As a result, many groups and English−speaking territories. Many that used to go to Prague, a few years of their clients arrive to try culture and later come to Budapest,” Jávorkai adds. 19th century events: a lavish dinner in the Szabó Ervin Central Library, a visit IN PROGRESS to the Gödöllő Palace, the residence of In a study made in 2007, the latest avail− one of Hungary’s favorite queens, Sisi, or able in the segment, travel agencies cited undeveloped areas like river cruising or horse carriage tours.

5 Socialite


themselves,” said Péter Jávorkai, man− aging director of Premium Incoming, an international DMC & inbound tour opera− tor group, specialized in Central and East− ern Europe and Spain. This has caused several DMC/incentive organizing companies to close down for good. Consolidation is ongoing; the mar− ket in Hungary and elsewhere has seen the merger of many significant players. Currently there may be 20−25 significant DMC firms recognized by the Hungarian Incoming Professionals’ Association, of which roughly 15 are specialized in incen− tive tourism. The future is safer for firms with a combined portfolio of leisure and MICE, for at least partly foreign−owned agencies, and for chains.


more quality accommodation that could large groups that might otherwise have improve Budapest’s position. Since then, gone to Budapest. Though there is room for development, river cruising has progressed: operators expanded their fleet with more spacious Budapest’s reputation as an incentive des− ships offering quality services at very tination has much improved in the past competitive prices. Newly built 4−5−star years. Trabant rallies and Sisi may have hotels have also attracted more groups. little to do with the Budapest of today, yet Yet the demise of national airline Malév they are an edge the country has over its left a space no low−cost carriers have regional peers. As one expat put it, “first, been able to fill. Also, the lack of a 1,000 people come because of the price, but plus person conference center means they return because they are astonished by other cities from the region often win what the city has to offer.”


5 Socialite


Budapest Business Journal | Nov 29 – Dec 12


SHIRAZ – LUXURY OF PERSIA Shiraz may be the only restaurant on Ráday utca that doesn’t aim at passersby with Magyarosch(sic!) tourist menus or cheap pub food. Instead, Shiraz baits hungry people with authentic Persian cuisine and an oriental atmosphere. As you enter, you feel as if you have been dropped into the fabulous East. You see heavy carpets and rich decoration, low seats and waiting water pipes. For dinner you go upstairs, where there is comfortable seating, even for larger groups. While perusing the menu, we took our waiter’s advice and ordered a shot of date pálinka, which is specially made for Shiraz. The dates come from Iran and the pálinka is made in Hungary, symbolizing a beautiful friendship between cultures and tastes. The pálinka was wonderful, not too sweet but aromatic, smooth, a ‘must− try’ for everyone. We also ordered homemade mint ice tea, which was maybe a bit sweeter than I expected, but still nice.We started our dinner with pomegranate and chickpea soup. It was thick; the chickpeas tasted a bit like chestnuts, and the pomegranate sauce give it a piquant and sophisticated edge. It was a wonderful, very special soup. Then we ordered a rich mezze plate, containing two kinds of eggplant salad, cucumber with yoghurt, garlic sour cream, hummus and fried feta cheese. We also tried the spicy beef meatballs, and the falafel with tahini dip. All the tastes were perfect: a culinary journey that should never end. The hummus – which is maybe the best in town – is silky and harmonious. The eggplant with tomato sauce was smoky and delicious, and the garlic sour cream reminded us of ripe cheese. The spicy


meatballs were exciting: hot, aromatic, a bit sweet and full of sunshine. They are worth the visit alone. For the main course we ordered kebab, the most popular meat dish in Persian gastronomy. The different kinds of meat (chicken, lamb or beef) are prepared according to halal traditions, and are soaked in spices for days before being grilled. We ordered a mixed plate (which turned out to be a huge portion) garnished with grilled vegetables and basmati rise. The lamb was young and delicious; the beef was tender and scented with spices, and the chicken was gold with real saffron. We also got chicken thighs with pomegranate, which were fantastic: sweet and spicy at the same time. As a light finish we had two cups of tea, and homemade ice cream: saffron and pomegranate. I always enjoy homemade ice cream, and these two were really special, I have never tried these tastes before. Neither was too sweet, and both had their own character, a fine ending to a tasteful meal. Shiraz is certainly a place to return to, either for popping in for a tea and some mezze, or for a night out with friends for a luxury meal. And if you do pop in, take my advice and start your dinner with a date pálinka shot. RATATOUILLE

SHIRAZ 1092 Budapest, Ráday utca 21.


5 Socialite

Budapest Business Journal | Nov 29 – Dec 12


DOT COMPLICATED From social media and technology expert Randi Zuckerberg comes an essential guide to making it through life online. Technology and social media have changed, enhanced and complicated every facet of our lives – from how we interact with our friends to how we elect our leaders, from how we manage our careers to how we support important causes, from how we find love to how we raise our children. The technology revolution is not going away. We can’t hide from it or pretend that it’s not changing our lives in a thousand different ways. So how do we deal with it? The answers lie within the pages of ‘Dot Compli− cated’. Its author, Randi Zuckerberg, was market− ing director at Facebook for six years, where she pio− neered live streaming initiatives and was nominated for an Emmy Award for a real−time news show she created and hosted. She has since become CEO and founder of Zuckerberg Media, a tech−savvy produc− tion company, and editor−in−chief of Dot Compli− cated, a modern lifestyle community and blog. It’s from her online community that this book takes its name, and its subtitle – ‘How To Make It Through Life Online In One Piece’ – is an accurate summary of its contents. ‘Dot Complicated’ helps us to under− stand social media and technology, and how it can be a force for good in both our personal and professional lives. But, perhaps but more importantly, it helps us to maintain what Zuckerberg calls “tech−life balance”.

Through first−hand accounts of her time at Face− book and beyond, Zuckerberg details the opportu− nities, obstacles, problems and solutions presented by our new online reality. In the process, she estab− lishes rules to bring some much−needed order and clarity to our connected and constantly chang− ing online lives. Covering everything from the eti− quette of unfriending to the importance of teach− ing your children how to be tech−savvy, Zuckerberg addresses current debates about online safety, bul− lying and privacy, and encourages us to think about technology in connection with “etiquette, relation− ships, identity and sharing”. “We have such powerful technology at our fin− gertips,” she writes. “But we need to make sure our attachment to being online doesn’t get in the way of our lives and relationships offline. We need to find balance between being connected to millions of people around the world and being present with the people we love, standing right next to us. It’s complicated.” Timely, engaging and invaluable, ‘Dot Complicated’ is the perfect guide to navigating the digital age. DOT COMPLICATED by Randi Zuckerberg Published by Bantam Press ISBN 9780593073490 Available to order through


SZAMOS GOURMET PALACE CAFE ◆ CONFECTIONERY ◆ CHOCOLATIER Right at the heart of Budapest on Vörösmarty square, Szamos Gourmet Palace is open for business. The prestigious building that became home to the cafe-confectionery-chocolatier was born a bank. It guarded fabled treasures within its marble walls. Today, it houses treasures once more. Antiques, chandeliers glistening with gold, classic furniture, sparkling glass mosaics, radiant porcelain images, magnificent flavors and intoxicating fragrances. Stepping inside is to surrender, to grow, to reflect, to comprehend, to arrive. Welcome.


12 - 15h 1052 Budapest, Váci utca 1. (entrance from Deák Ferenc street)


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11/21/13 5:29 PM

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