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BUSINESS JOURNAL BUDAPEST

VOL. 26. NUMBER 22

NOVEMBER 30 – DECEMBER 13, 2018

SPECIAL REPORT Christmas Shopping SPECIAL REPORT

Hungarian Holiday Season Shopping Habits Shopping malls and online store are both popular when it comes to doing the Christmas shopping in Hungary, with the buying season extending, new surveys on our seasonal purchasing habits suggest.  11 SPECIAL REPORT

SOCIALITE

Talking up the Nuclear Option

A Magical Time out of Time in Eger Even out of season, Eger, around an hour’s drive north-east of Budapest, has a charm all of its own, as David Holzer discovered in a late November trip. Here's his five reasons to visit. And don't forget to try the seriously sweet local treat, the Egrigomb. 21

NEWS

No Upgrade for Hungary This Year In spite of heated expectations, the last credit rating review of the year did not bring an upgrade for Hungary. Moody’s does foresee robust economic growth continuing into 2020, but the decision surprised local analysts . 3

NE BUSI

Ecomodernist and erstwhile candidate for Governor of California Michael Shellenberger talks one-on-one with the BBJ about what’s wrong with renewables, and why he thinks countries like Hungary must embrace nuclear BUSINESS power.6

Blending Creativity With new Technologies

Zsolt Kassai, general manager of Special Effects International, talks about changes in the industry, the development of the business, and his dream event to stage. 7

2 | 1 News BBJ

THE EDITOR SAYS

EDITOR-IN-CHIEF: Robin Marshall EDITORIAL STAFF: Zsófia Czifra, Kester Eddy, Bence

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FORGET THE RHETORIC, LOOK AT THE FIGURES If Hungary’s government was hoping for an early Mikulás present from ratings agency Moody’s Investors Service, it was disappoined. At its latest review on November 23, Moody’s decided to leave things exactly as they stood, at a rating of Baa3 and with a “stable” outlook. The government has, at the time of writing, kept remarkably quiet about the matter, but many of the pro-Fidesz media outlets were quick enough to profess their outrage, openly questioning the suitability of Moody’s analysts to do their jobs. They way some of the government cheerleaders went on, you might think the Grinch had just stolen Christmas, or that the good folk at Moody’s had more in common with Scrooge (pre-Ghosts of Christmas, naturally) or, indeed, Mikulás’ dodgy companion Krampusz himself, rather than professional risk analysts. Others were more measured. Gergely Suppan is the chief analyst at TakarékBank, an institution that is often described as the central bank for the local cooperatives, is generally bullish about the economy (almost always at the more optimistic end of the spectrum) and perceived as having good connections with the government. Speaking to state wire service MTI, Suppan went as far as to describe the rating non-action as “entirely unjustified”. Raiffeisen Bank senior analyst Zoltán Török did not expect a further upgrade, but had thought the agency might shift its rating outlook from “stable” to “positive”. That would have brought BBJ-PARTNERS

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Moody’s fully into line with the other two big rating agencies, Standard & Poor’s and Fitch, both of which also have the country at the lowest level of investment grade. But while some of the comments may have been over the top, they have a kernel of truth at their heart. The day after the ratings news broke, I spoke with a very senior, non-Hungarian, European-level banker. Was he surprised, I asked? Noting that “surprise is a strong word” he thought the issue was more one of “timing”. “The country deserves an upgrade,” he said. Park to one side the politics in Hungary, and whatever your view on that might be, and the fundamentals of the economy are good. And while just about everyone expects growth next year to be down on this, the forecasts for that growth continue to rise. Just this week, London-based analysts for Morgan Stanley said Q3 growth in Hungary had prompted them to update their predictions to 4.6% for this year, 3.8% for 2019 and 3.2%, as a “first stab” for 2020. The country, the analysts said, is comfortably outperforming the euro area and is broadly in line with its regional peers. The European Commission and the OECD have both raised their growth projections for Hungary in recent weeks. Generally speaking, most interested parties believe Hungary is committed to reducing debt, though there continue to be technical arguments over the details of how that is achieved. While the central bank has raised eyebrows with some of its unconventional policies, Hungary’s economy is undoubtedly in a better place. Then again, as one diplomat put it to me a couple of weeks ago, if you can’t produce good figures in the current climate, you never will. Perhaps the biggest worry about mid-term growth is what happens with EU funding post 2020. But as the EU has yet to reach a conclusion on that itself, it is for now an imponderable. Hungary will just have to hope for a New Year ratings present instead. Robin Marshall Editor-in-chief

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Budapest Business Journal | November 30 – December 13, 2018

News///macroscope

No Upgrade for Hungary This Year

In spite of heated expectations, the last credit rating review of the year did not bring an upgrade for Hungary. Moody’s Investors Service, however, does foresee the robust economic growth continuing into 2020. Government and analysts were left disappointed, although one reason for the decision was the fact that the country’s state debt ratio is still high. ZSÓFIA CZIFRA

Moody’s Investors Service affirmed the government of Hungary’s long-term issuer and senior unsecured debt ratings at “Baa3” on November 23, at its second scheduled review of this year. The ratings outlook remains “stable”. The decision leaves Hungary just over the investment grade threshold for this year; Moody’s’ was the last review scheduled for 2018.

Baa-rated median, which will stand at around 50% of GDP in 2018 and 2019. In addition, Moody’s notes that Hungary faces a sizeable structural fiscal deficit, which underscores the pro-cyclical nature of fiscal policy. According to the EC’s Autumn forecast, Hungary’s structural deficit will deteriorate further in 2018 to around 3.8% of potential GDP, from an estimated deficit of around 3.4% in 2017. The EC forecasts a gradual improvement from 2019 onwards, and expects the structural deficit to narrow to 3% of potential GDP by 2020.

Unorthodox Policy

Moody’s says in its accompanying justification that the robust growth of the Hungarian economy will continue

into

2020,

but added that the economy faced a number of short- and medium-term challenges. The agency says Hungarian authorities remain committed to gradual fiscal consolidation, but emphasizes that the debt burden stays at elevated levels. The agency also mentions the overall supportive institutional capacity, but adds that some gaps constrain policy credibility. Moody’s forecasts real GDP growth of 4.3% in 2018 and 3.4% in 2019. “Annual real GDP growth rates have been accelerating since 2016, as the economy has been responding to government policies aimed at revitalizing domestic demand,” it reads. It adds that for the first three quarters of 2018, annual growth rates averaged 4.7%, mainly driven by strong domestic demand, chiefly from private consumption and investment.

Positive FDI

The report mentions the recently announced large-scale FDI, mainly in the automotive

sector, as having a continuing positive impact over the coming years, not only during the construction phase but also later, when export capacities come on stream. But Moody’s also highlights that the very tight labor market, with already low unemployment and high employment rates, will pose a growing constraint for continued strong growth. Slowing global growth, particularly in key markets such as Germany, will reduce the external growth contribution, and given Hungary’s reliance on the automotive industry, this exposes it to growing protectionist tendencies. As for the growth outlook beyond 2020, Moody’s expects that the anticipated reduction in the size of future EU funds for Hungary will have a negative effect on the long-term growth outlook. In Moody’s view, the Hungarian authorities’ continued commitment to maintaining general government fiscal deficits

below

of GDP is a credit strength. It adds, however, that despite a sustained decline, Hungary’s debt burden will remain significantly above the

The unorthodox policies that the government has introduced also got its share of attention in the statement. “Institutional strength in Hungary remains constrained by the unorthodox policy environment, a history of unpredictable regulatory changes and concerns over transparency, as well as the difficult relationship with the EU, which have the potential to negatively affect investor perception and the business environment,” the credit agency says. Moody’s recognizes, however, that so far FDI has not been negatively affected and it also acknowledges recent government actions, such as the establishment of a National Competitiveness Council and the creation of the Ministry of Innovation and Technology. Together with the government’s commitment to adhere to the fiscal deficit rule of 3% of GDP under the Stability and Growth Pact, these support Hungary’s institutional capacity and effectiveness. Moody’s decision surprised local analysts, who had expected an upgrade, or at least a positive change in the currently “stable” outlook. TakarékBank chief analyst Gergely Suppan said failing to upgrade Hungary shows how far behind ratings agencies are with regard to what is going on in the economy as well as the market’s assessment. Raiffeisen Bank senior analyst Zoltán Török said he had expected Moody’s to change the outlook on the rating to “positive”, considering the reduction in Hungary’s financial vulnerability, its current account surpluses, and its low general government deficit. State debt, relative to GDP, is on the decline, with an ever-greater part being financed by households and local banks, while economic growth is strong and the favorable trends are expected to continue, Török added.

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Budapest Business Journal | November 30 – December 13, 2018

Competitive Education, Better Career Choices At its fourth annual conference on education, AmCham Hungary officially launched a Career Orientation Program aimed at helping high school students make a timely and informed decision on their future. ZSÓFIA VÉGH

Jointly organized with the Hungarian Investment Promotion Agency (HIPA) and the professional support of the Ministry of Human Capacities, AmCham’s Fourth Competitive Education Conference on November 12 took the theme of career orientation. “Today, one of the biggest challenges for business entities is to find a skilled workforce that meets their requirements both in terms of quality and quantity,” chief executive officer of AmCham Hungary, Írisz Lippai-Nagy said. “We have 360 members of various industries. In the past year, we could hardly discuss a topic without ending up talking about the labor market and education issues two minutes into the conversation.” Róbert Ésik, president of the Hungarian Investment Promotion Agency (HIPA), agreed. “A substantial part of my work is to talk with foreign companies looking at Hungary as a potential investment location,” he said. “Four years ago, only half of these conversations touched upon the availability of workforce with adequate expertise and quantity; today, all do.” Tibor Navracsics, European Commissioner for Education, Culture,

Tibor Navracsics, European Commissioner for Education, Culture, Youth and Sport, chats with delegates at the conference. Youth and Sport, and a former Fidesz government minister, told the conference: “The changes on the labor market, including the appearance and the disappearance of jobs and skills, pose a challenge to the education system because we need to define today what the labor market will demand in the future.” He said Europe can either chose to prepare students for certain professions or improve the skills that allow them to do several jobs.“Europe is looking to take the second option.”

How effective?

When asked how effective the Hungarian education system was compared to other European countries, the commissioner said in competitiveness terms it is quite good. The youth unemployment rate is one of the lowest in Hungary across the continent – the labor market acknowledges expertise and education, he added. With its all-new Career Orientation Program, AmCham aims to help secondary school students prepare to make a more

Career Orientation Platform With the support of TATA Consultancy Services, AmCham has created a platform that allows volunteers from AmCham member companies, the so-called Career Ambassadors, and the representatives of Hungarian secondary school nationwide to organize career orientation visits. Based on the success of the chamber’s Language Ambassador and the Career Ambassador programs, the goal is to continue holding inspiring, interactive and thought-provoking lectures on labor market needs, the modern business environment, the importance of language skills, the opportunities of STEM (science,

technology, engineering and mathematics) subjects and future jobs to students in the 9th-12th grades. To support the volunteers, a short manual has been compiled that includes various exercises, subjects, useful tips and links which can be used to prepare for the career orientation classes. The manual is available to all registered Career Ambassadors via the website. The chamber is looking for dedicated professionals who want to broaden students’ minds by sharing their knowledge and experience. To see more about the program, or to register as a Career Ambassador, visit: www.karrierorientacio.hu

informed decision regarding their career. The labor market is changing at a such a fast pace that parents and teachers can hardly keep up. The platform allows corporate volunteers to register. These so-called Career Ambassadors will visit schools to hold a career orientation class or participate in career days. “In addition to giving a snapshot of their job, they focus on the skills and the expertise needed as well as the opportunities offered at a certain workplace.” Career orientation days were made compulsory two years ago. Schools need to hold at least two days a year, said Zoltán Maruzsa, Deputy State Secretary for Public Education at the Ministry of Human Capacities (EMMI). “I welcome this initiative as it will enable industry players to get involved and students to have a better overview of the field they represent,” he said. Beyond career orientation days, students can get acquainted with the workings of some of the fields within the framework of the so-called theme-week: a week-long program in three themes – IT, finance, or sustainability, said Gáborné Pölöskei, Deputy State Secretary for Vocational Training and Adult Education. Companies also organize events to help students get to know better what they can expect should they decide to choose their field. “As a traditional metal industry firm, we place the most emphasis on science, technology, engineering and mathematics (STEM)”, said Tamás Horváth, CEO of Arconic. “We aim to reach out to students in various ways. We lecture in schools, we organize factory visits or shadowing, when they can follow an expert from the company. We also try and steer more girls towards our field,” he added.

Dishonest Communication

Many students realize they are not interested in a field after they have started their studies. “This is partly the result of dishonest communication about that field,” said Kristof Sipos, an undergraduate

student of Debrecen University, and a Euroskill Mechatronics gold medalist. “It would help if career orientation/ preparation for a decision did not start in the last year of high school,” he said. Some companies do target students at a younger age. National Instruments starts as early as preschoolers. “We provided many kindergartens with robot toys,” László Ábrahám, managing director of NI Hungary said. At this age, there is no gender barrier – girls play with the same toys as boys, he added. The company is also involved with schools – it helps 6,000 students per year (in 100 schools) learn digital skills, algorithmic thinking and graphic programming. NI Hungary also cooperates with universities. “We have provided many universities with a field-programmable gate array (FPGA), an integrated circuit to help teaching,” Ábrahám says. Technical skills are crucial, but of equal importance are soft skills. “Most companies aim to employ problem solvers, but we believe that having people able to identify problems by asking the right questions is just as important,” said Gábor Salamon of Morgan Stanley during a section where companies showcased some of their career orientation strategies. “Managing cultural differences is one of the themes that is especially near and dear to us,” said Krisztina Felméry of Tata Consultancy Services. “With nearly 70 nationalities working for us, we think we are a credible source to talk about this topic,” she added. In launching its career platform, AmCham says it has tried to set realistic goals. “If we get to spark students’ interest in this subject, if we get them to start talking about career choices with their teachers and parents and understand that by not deciding or by postponing this decision they are risking their future, we have accomplished something,” Lippai-Nagy said. A version of this story first appeared in JOURNAL, the AmCham magazine.

1 News | 5

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Budapest Business Journal | November 30 – December 13, 2018

Budapest Airport Starts Construction of Cargo Facility Ferenc Liszt International Airport operator Budapest Airport has commenced construction of the first 20,000 sqm phase of Cargo City. The EUR 32 million logistics facility is part of a HUF 60 billion development program at the airport and is due to complete in the third quarter of 2019. GARY J. MORRELL

Some EUR 34 million has been invested into the infrastructure of the airport since 2007, which has seen a 27% growth in passenger numbers in the 2015-2017 period.

apron, enabling the concurrent handling of two giant Boeing B747-8F cargo aircraft, with a payload of 100 tons.

Increased Demand

As part of the redevelopment scheme, two logistics centers of around 16,000 sqm were handed over to TNT and DHL Express last year, reflecting the increased demand for the handling of small express parcels and e-commerce. Budapest is emerging as the leading Central European cargo hub, within reach of almost

Cargo facility at Liszt Ferenc Airport. The airport currently operates 133 destinations with 46 airlines and there is the potential for as much as

150,000 tons of cargo

to be transported in 2018, commented József Kossuth, cargo manager at Budapest Airport at the recent Digitrends/ Logistics conference at the Hotel Gellért, organized by the Budapest Airport Region Cluster (BARC) and EIT Digital. This initial phase of the project will be occupied by the carriers Qatar Cargo, Silk Way, Turkish Cargo, Carglux and AirBridgeCargo. A second phase will be used by freight forwarders. TNT, UPS, DHL and FedEx will continue to operate at the older Terminal 1 of the airport, where a further 32,000 sqm service area is being developed.

The Cargo City project was promoted at the recent Toronto forum where Budapest Airport exhibited jointly with cargo representatives from Düsseldorf and Hamburg. All three airports are focusing on developing their cargo businesses on the basis that there are significant market opportunities in new cargo bases where there is the potential for growth in capacity, in contrast to traditional European hubs. The construction of Cargo City is seen as part of the strategy to make Hungary a major cargo hub for the Central & Eastern European region. Cargo traffic has increased by almost 40% at Ferenc Liszt during the past two years, reaching 127,000 tons for 2017 according to the operator. In reaction to this growth in demand, Budapest Airport is constructing a 36,000 sqm concrete

countries

according to René Droese, director of property and cargo for Budapest Airport. “Cargo friendly airports, and particularly regional hubs, which often enjoy less congestion and more flexibility, have an important role to play in the future of airfreight,” he said. “Our 24/7 operations allow us to cater for business all over the globe, and our continuous expansion means more businesses view us as the ideal location, with world-class facilities that are able to capitalize on this growth,” Droese added. The operator established the Budapest Airport Region Cluster (BARC) in conjunction with local authorities to promote development of the airport and the surrounding districts. The Budapest Cluster sees the improvement of national and international road and rail transport and the creation of a network of modern logistics facilities as central to the development of the airport and the surrounding districts, bringing employment to area.

Redwood Holding Delivers Ecodome Office Complex Hungarian developer Redwood Real Estate Holding has delivered the latest Budapest office complex, the 5,000 sqm Ecodome office, located in the Castle District. GARY J. MORRELL

Redwood originally bought the development plot in 2007 after a tender by the local municipality but the project was put on hold due to the economic downturn. It subsequently acquired modified development permits in 2011 for the project to meet the perceived changing demands of tenants in the market and the redesign was undertaken by the DVM group. The complex is expected to be awarded LEED “Platinum” accreditation and includes energy technology, individual air and acoustic controls,

bicycle parking, electric car recharging facilities and a green roof with restaurant facilities. The project

provides

40%

water savings, and 60% electricity savings according to Redwood Holding. Ecodome is close to fully let and the tenants include Swietelsky, who acted as constructors on the project. The letting process for the boutique office project, a rare delivery in the Castle District area, lasted for a year according to Tamara Szántó, business manager of Cushman & Wakefield, who acted as leasing agents. The complex houses around 400 staff.

Investors Bidding

The Ecodome project has attracted firm bids from both domestic and international investors according to Bálint Erdei, founder and CEO of Redwood, and an investment transaction is under due diligence. The complex is valued at EUR 20 million and was developed on the basis of a 65% loanto-value bank loan. Ecodome is one of four buildings delivered in the Budapest office market in the third quarter of the year according to the Budapest Research Forum (consisting of CBRE, Colliers International, Cushman & Wakefield, Eston International, JLL and Robertson Hungary), bringing the stock of modern office space to 3.58 million sqm. The other deliveries were the 58,000 sqm Telekom HQ by Wing, the 36,000 sqm Mill Park by Skanska and the 11,000 sqm Advance Tower by Futureal. The vacancy rate has decreased to 6.4%. “We are looking for international partners to act as a joint venture partner for a larger 20,000 sqm office development,” says Erdei. “I think that we could provide the expertise as we have experience in the office, hotel

and residential sectors. Redwood does not specialize in a particular area of real estate development and our current portfolio includes office, hotel and residential developments,” he added. The company is working on a 140-room hotel development in central Pest, the redevelopment of a historical building that is due to be delivered in 2019. A further project is a 160 apartment residential development in Csillaghegy that is also scheduled to be delivered in 2019.

Ecodome, in the Castle District.

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Budapest Business Journal | November 30 – December 13, 2018

Business

build the plant, it’s an investment for future generations, you amortize it over 60-80 years: it is very inexpensive.

Shellenberger: Time to Rehabilitate Nuclear Power Pro-nuclear activist Michael Shellenberger, founder of the California-based global citizens movement Environmental Progress, writer for Forbes and a defeated candidate for governor of California this year, talks exclusively to the Budapest Business Journal about why Europe would benefit from focusing on nuclear energy, not renewables and how Hungary can become more energyindependent. ZSÓFIA VÉGH

BBJ: The European Parliament has just agreed new targets for 2030: a binding renewable energy target of at least 32% and an energy efficiency target of at least 32.5%. Do you think that the EU is on pace to reach these? Michael Shellenberger: Well, no. But I also don’t think they are the right targets. The targets should be clean energy, not renewables. The European Union has a strong anti-nuclear bias. So the focus should be on scaling up the most lowcost and reliable zero-emission energy you have, and that’s nuclear. There has been too much of a focus on renewables in general and we are starting to see them going into crisis. The Netherland’s government just came out and said that they would be expanding nuclear and not renewables. BBJ: Why is that? Europe is quite diverse: there are pro- as well as antinuclear countries. MS: I think the tide is starting to turn. Germany abandoned its climate targets because of its phase out of nuclear and now the protests of the Hambach forest [there are plans to clear the ancient forest to make way for a surface mine] show that

BBJ: How about countries that have options: Denmark, for example, with more than 50% of its electricity coming from renewables. Do they also need nuclear energy? MS: Yes, because their electricity costs are so high and all that unreliable power means that they are dependent on their neighbors. Besides, Denmark is a tiny country and so is Hungary. France, Germany, Britain – these are the countries that need nuclear power – if you don’t have it either your electricity is very dirty or very expensive. Or, in the case of Germany, both. BBJ: Regarding the costs of building nuclear plants, you have talked many times about standardization. So you also see ways to cut costs? MS: That is what Hungary is going to do: you are going to buy two VVER reactors from Russia. There you go, that’s a standard design: the Russians have built it over and over again. It is probably why you went with the Russians instead of the French, who changed their design to the European pressurized reactor and incredibly delayed in both Flamanville, France and Olkiluoto, Finland. Nuclear should be boring. It is just electricity.

BBJ: How, then, could we achieve clean, affordable and safe energy systems? MS: Through nuclear. Solar and wind energy end up locking in fossil fuels. Their unreliability means that you always have to have fossil fuel power plants idling at any given time. Look at France and Germany, the two biggest economies in Europe. France has 92% of its electricity from zero emission sources – Germany has 46%. And yet France pays half as much for electricity as Germany because it depends heavily on nuclear and Germany is phasing it out. Germany saw its electricity prices rise 50% over the last 15 years. France’s prices has stayed stable. So introducing huge amounts of solar and wind onto the grid makes electricity expensive; we see it all over the world. The reason has to do with trying to manage all of that unreliability.

BBJ: Building new nuclear plants is still expensive. MS: It’s not. You have to put up money upfront, but that is different. Nuclear plants last for 60-80 years, so you amortize them over a long period of time. Do you know how long a solar panel lasts? Twenty to twenty-five years. Wind turbines, same thing. What nuclear does is it provides reliable electricity. There is no way that Hungary could generate a significant portion of its electricity from solar or wind. You don’t have very good [hours of] sunlight and wind here and you would still have to back it up with tons of natural gas and that’s what going to increase your electricity prices. Especially if you want to be more energy independent: if you have a nuclear plant, you can buy the fuel from anywhere. If you become dependent on solar and wind, then you’ll become dependent on Russian gas.

BBJ: Maintaining old nuclear plants or building new ones is also expensive. This is why so many people in Hungary are opposing to the construction of the expanded nuclear power plant. Meanwhile the cost of electricity generated from renewables has decreased. MS: The cost of solar panels and wind turbines has gone down, but the cost of electricity in places with a lot of solar and wind has gone up. California has seen our electricity rates increase five times more than the rest of the United States during the time when solar panels has become cheaper, because they have to manage unreliability.

BBJ: The upfronts costs of building a nuclear plant are really high; that’s one reason why no plants are built on a market basis. MS: The energy system is not really a market. If I go to the market and I don’t have apples I can go across the street to get apples. But if you need electricity, you can’t do that. You have to spend ten years building a power plant. So, for most countries, including Hungary, you have a public utility; it is government owned. France, same thing. And it works great. It is the cheapest way to generate power; capital is very cheap. So you borrow money,

the pursuit of renewables is not going to result in the EU’s climate targets.

BBJ: Still, the most heated debates are about nuclear. What accounts for that? MS: Why are the anti-nuclear so anti-nuclear? That’s such a good question! How long do you have? (laughs). It goes way back, there are several origins to it. The first is the fear of nuclear weapons. There are two different kinds of people: ordinary people who watch television and decide based on what their hear. And there is anti-nuclear activists who have an ideology. If you work at Greenpeace you want to get rid of nuclear weapons, you want to move back towards a more primitive way of living, towards renewables, you think people should pay more for energy; mostly you are against modern life. Most people aren’t that ideological but they hear scary stories promoted by Greenpeace, which has a USD 350 million budget. So the history of the anti-nuclear movement is that it starts out as a movement against nuclear weapons and then it spreads. Once it becomes clear that nobody is going to get rid of their weapons, it spreads to nuclear power plants. The anti-nuclear movement uses similar language and fear tactics to frighten people about nuclear power plants. That’s why people think that nuclear plants can explode like a bomb. It’s not true but they think because it has nuclear fuel in it and there have been accidents that they can go off like a bomb. There is a second factor. The environmental movement has always opposed nuclear energy since the 1960s, because it is against cheap energy. In the ’60s they worried that too much cheap energy would result in overpopulation, overconsumption, And those two concerns were merged. In the 1960s, they literally talked about the population explosion; they feared that nuclear would create too many people and the conditions for nuclear conflict. Many of these things operate in the unconscious; people are unaware of them. That’s where the furors emanate from. It is a lot of work to undo it. Shellenberger was in Budapest at the invitation of MVM. He also spoke with students of the Budpest University of Technology and Economics and was due to give a TEDx talk. Photo courtesy of Lounge Communication.

www.bbj.hu

Budapest Business Journal | November 30 – December 13, 2018

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Blending Creativity and Innovative Thinking With new Technologies Zsolt Kassai, general manager of Special Effects International, talks to the Budapest Business Journal about changes in the industry, the development of the business, and his dream event to stage.

BBJ: You have offices in Budapest, Berlin, London, Dubai, Los Angeles and Hong Kong. What is the split between the original, Hungarian market, and business from overseas? Zs.K.: First of all we have to separate our “sending markets” and operating markets. Around 70% of the events we service take place in Budapest but are mainly organized by international clients. We hardly have Hungarian clients going abroad with their events; the few hundred projects we have outside of Hungary are for international clientele. The majority of these take place in Europe and this year we had nearly 40 events in the Unites States. The number of events we service in Asia and in the Middle East is also significantly increasing. BBJ: This year you acquired Dubaibased event design and production company Kraftwerk. What do you hope to achieve through this? Zs.K.: The acquisition is part of our business development strategy to increase our international presence. Our local production capacities in Dubai now enable us to provide full-scale technical, installation, exhibition and design services both in the UAE and in other GCC countries. Complementing our four

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solutions more often, requiring more and more creativity from our teams. To keep pace with the latest, or even future trends, we implement technologies and create new brands like the interactive event app Evendo-r.com, or combine the skills of our partner companies Kraftwerk and Special Effects Media. Brand activation, live video streaming, YouTube channel management are just few of the services our companies embrace. BBJ: How much of what you do is responding to client requests and how much is giving suggestions? Zs.K.: We mainly respond to client requests but for every event, we make technology suggestions. Many inquiries still ask for the projector/screen/ microphone trio where we have little space for unique solutions, but selecting the best fitting projection or sound equipment is still inevitable for every client. The real challenge comes when we need to transform a venue into a completely different interior or create a replica of existing historic landmarks with the help of technical or stage equipment to deliver an extraordinary experience. These events not only put our creativity, originality and innovative thinking to the test, but always require us to implement new technologies and materials.

BBJ STAFF

BBJ: You now have 36 years of experience as an event production company. How has the market changed in that time? Zs.K.: Special Effects’ history started, believe it or not, producing special effects for feature films. Upon identifying an increasing need for professional audiovisual equipment and services at conferences, our focus moved towards this area. Imagine that in the beginning we operated overhead projectors and slide projectors; an LCD projector was the dream of many customers. Today, complex panorama projection or 3D mapping are not science fiction anymore either. Not only the technology has changed at rocket speed over the past years; clients also compete with each other or even with themselves to create bigger, better, brighter events year by year.

current business units – Hotel AV Services, International Production, Event Production and Exhibition & Installation Services –, this Dubai-based co-operation will help transform our graphic and event design services into an independent Creative Event Design division that will allow us to create and produce full event concepts and support clients with complete event branding to deliver unforgettable event experiences. BBJ: What are the latest trends in event production? Zs.K.: Interaction on every level. Smart phones and collaborative applications, greater audience engagement, virtual and augmented reality, artificial intelligence and Internet of Things are the hottest buzzwords in event production and event management. Our customers want to achieve long lasting results from their events and the merger with Kraftwerk has brought a good variety of these services into our portfolio. BBJ: What do you think we will see in the future? How will the industry evolve? Zs.K.: Home technology heavily influences event tech. Gadgets, apps you use in everyday life will come to events with modified or extended functionality; for example, voice direction or face recognition. Social media will certainly play a bigger role, too. Event

organizers will be able to enhance the event experience by adding influencer commentaries to their original event contents. Sharing these new contents on social media platforms will reach greater audiences. In addition, video and audio streaming, live 360-degree videos, remote interpretation can all connect the remote audience in a much more efficient and measurable way. Clients will request and use these

BBJ: What is the event you are proudest of having arranged, and which was the most challenging? Zs.K.: It is hard to choose one. Working for FIFA, UEFA, FINA, NATO or providing services for the 300 plus official EU-Presidency events in 2011 were all challenging but made us very proud, too. However, the real success is to create and build a full event concept from scratch for a client and make their “dream event” come true. Technology plays a huge role here, but due to the size of some events, it is rather more scenic or even venue design, not simply event production. It requires full attention, participation and coordination of multiple divisions, involving in some cases a team of up to 150-200 people. BBJ: Is there an event you have not yet produced that is on your wish list? Zs.K.: Lots! We always want to improve and seek new opportunities and challenges. If I want to mention one in particular, the Super Bowl Halftime Show could be a really motivating target.

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Budapest Business Journal | November 30 – December 13, 2018

NGOs, Health Workers Hold out Hope for the Suicidal A somewhat unusual exhibition was staged in Budapest at the Open Society Archives this fall. There were no posters or attractions on the walls of the large hall to attract the public: visitors were confronted only by rows of narrow podia, upon each of which was a simple folder. Inside was a photograph, and some text describing the circumstances illustrated.

M LIN E O T T O B E H T statistics on Eurostat (2015), Hungary was joint third in suicides rates (with Latvia) in the European Union, at 19 per 100,000. The 1,634 is also far too many for Károly Oriold, founder of Lélekben Otthon (In the Soul at Home), a Budapest- based NGO committed to preventing suicide.

Preventable KESTER EDDY

The photographs were the scenes of suicides found among a massive, uncatalogued collection of police photographs given to the OSA dating from 1956 to 1986. “When we looked at the photographs, we realized that we had never, ever seen photographs of such desperate poverty and hopelessness,” István Rév, the curator, said at an introduction to the exhibition on October 10. Rév and his team felt a special responsibility for the photographs, hence the exhibition. As he put it: “We know that this is exactly the period when Hungary had the highest suicide rate in the world. Each year, close to 5,000 people managed to end their lives in these three decades.”

“Our main message is that suicide is To this day, many Hungarians speak of preventable and avoidable. We offer a help having the highest suicide rate in the world. Now, here’s the good news. Rév was correct, line for anyone feeling suicidal. Hopefully, in part: suicides in Hungary peaked in 1983, our little foundation has helped [reduce the numbers],” he says. at 4,911 cases. But the numbers were at Oriold points to loneliness, especially just 2,000 per annum in 1956. So, as tragic for men over middle age, a difficult family as that is, those horrible numbers – which upbringing – including violence – and represent a rate of 46 suicides per 100,000 alcohol consumption as factors all leading population at their worst – were not quite as to suicidal tendencies. bad as Rév intimated. But why should this feature here, a And now, even better news: since that column on economic and business-related peak, almost without exception, those issues? numbers have declined each and every Because, the value of life apart, there is an year. In 2017, the number had crept down economic cost, however difficult to quantify. to 1,634, a rate of nearly 17 suicides per “When, say, a young person commits 100,000 population. suicide, parents, classmates, close friends, Naturally, this is 1,634 – nearly five persons all suffer some sickness, e.g. mental a day – too many. It also does not compare depression,” says Oriold. well internationally: according to the latest

In other words, it adversely affects anyone in a job, or at studies. Sadly, few in high authority seem to care. “We get no help from the government,” Oriold sighs. But some do: treatment by medical staff in Hungary has improved. “Somehow, the young generation in psychology and psychiatry seems to be more effective and enthusiastic,” he says. Equally surprisingly, attendance at the suicide exhibition was also deemed “one of the most successful exhibitions of the gallery in the Goldberger House,” according to an organizer, with nearly 1,500 visitors. Hopefully, this means those awful statistics, along with the suffering involved, will continue their downward trend. The Bottom Line is a monthly column written by Kester Eddy, a long-standing and well respected Budapest-based business and economic journalist, who has written for the Financial Times and many regional publications. The opinions expressed in the column are not necessarily those of the Budapest Business Journal. To comment on this column, or on anything else in the BBJ, email the editor at robin.marshall@bbj.hu

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What to do When Tired of Poor Sleep Dr. Zsuzsanna Vida, one of Hungary’s best-known somnologists, talks to the Budapest Business Journal about sleep disorders and its treatment. BENCE GAÁL

BBJ: What are the most common forms of sleep disturbance and their causes? Zs.V.: Talking about sleep disturbance, usually both the doctor and the patient are thinking about insomnia. In reality, we can talk about more symptoms and illnesses behind them. Behind sleep disturbance there is usually stress, burdening events, irregular sleeping habits, and a changing work schedule. It can be the follow-up symptom to illnesses (psychiatric, neurological, etc.), and medication can cause it as well. The group of primary sleeping illnesses is especially important, if sleep disturbance is caused by the body’s ill operation during sleep. One of the most well-known ones is sleep apnea, with the main symptoms, such as snoring, mostly disturbing the relaxation of the bedmate. Sleep-related movement irregularities must also be mentioned, especially restless legs syndrome (prevalent in 5-15% of cases). You should seek professional help if insomnia is present more than four days a week, causing significant disturbances to daytime activities (weariness, sleepiness,

worsening mental performance). Also seek help when the time taken to fall asleep reaches 30 minutes (onset insomnia, found in 20% of cases), if sleep is interrupted by at least three conscious awakenings (maintenance insomnia, 60-70%), or for awakening insomnia, when you wake at least an hour before usual (10%). BBJ: Are there warning signs before the onset of sleep disorders? Zs.V.: There is nobody who has never slept poorly at least a few times during his or her lifetime, because of stress, exams, or other issues. However, among a large portion of the population, this occurs regularly. Sleep disturbance (insomnia) affects onethird of the population, even by the most careful estimates (some studies have found 65-66% are affected). BBJ: What are the most common misconceptions? Zs.V.: Everybody knows that too little sleep leads to weariness or exhaustion, but oversleeping and the need for too much sleep generally fails to sound an alarm. However, the ability to “sleep anytime, anywhere” is not a sign of physical and mental health. Sleepiness, weariness

Dr. Zsuzsanna Vida during the day, and need for more than eight hours of sleep indicates a lack of quality sleep. The reason is often a sleep disorder, in most cases sleep apnea. This illness and the accompanying loud snoring does not only ruin the sleep quality and relaxation of the sleeping partner, but can be the cause of several, possibly life-threatening issues: increasing the likelihood of hypertonia, diabetes, preventing weight loss, weakening the immune system, and increasing the risk of stroke and heart attacks. We tend to blame sleep issues on everyday stress, and ignore them. Those

affected usually try homemade remedies and then turn to the easiest solution: sleeping pills. They only seek help if their problem is longstanding, and they have tried a number of medications, are exhausted and want immediate solutions. However, the basic principle for treating sleep disturbances is to seek and treat the source of the problem. This often involves cardiological, endocrinological, exams and the like after the detailed recording of the anamnesis and sleep laboratory or home sleep exams. BBJ: What long-term solutions would you suggest? Zs.V.: For every symptom related to sleep, the primary task is finding the cause and treating it. The examination is undertaken by a somnology expert, who refers the patient towards another expert if needed. If the main symptom is snoring, the examination has to start towards sleep apnea, with sleep diagnosis mandatory in this case. The diagnosis can be done in the patient’s own home, with mobile equipment. The data collected through the night is evaluated by the somnologist, who proposes a treatment. Those who receive a diagnosis of sleep apnea will need equipment facilitating breathing, a CPAP machine, which can successfully treat symptoms.

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Budapest Business Journal | November 30 – December 13, 2018

WHO’S NEWS

Do you know someone on the move? /// Send information to news@bbj.hu

Coca-Cola Hungary Names Country Manager Coca-Cola Hungary has announced the appointment of Péter Kerekes as its new country manager, effective November 1, bringing his two decades of marketing experience to the company, according to a press release sent to the Budapest Business Journal.

Péter Kerekes “Over the course of my career, I’ve always worked on furthering the success of the most well-known brands, and I’ve been responsible for the

performance of iconic domestic and global brands,” says Kerekes. “I’m very glad to join one of the leading companies of the world, and it will pose an interesting challenge to conduct CocaCola Hungary’s transformation from the manufacturer of the world’s favorite beverage to a firm offering a full drink portfolio.” Kerekes is joining Coca-Cola at what he describes as an important turning point, noting that the company will not only appear in new categories on the drinks market, but will also place paramount importance in Hungary on the realization of a “World Without Waste”, its vision for more sustainable packaging. Kerekes’s experience in the FMCG industry comes from working at a range of companies in both domestic and international management positions. He began his career in marketing and management at Unilever, later working at brewery Dreher Sörgyárak Zrt., where he was responsible for the Dreher and Kőbányai Világos brands. Kerekes then returned to Unilever, where he was responsible for the Domestos portfolio as regional brand manager. He was named European innovation head, later becoming category manager of household chemical products in Hungary and marketing head of the firm’s regional innovation center. After a spell at Reckitt Benckiser as marketing director responsible for the

Hungarian and Romanian markets, he then returned to Dreher Sörgyárak as marketing director. From 2012 until 2017, Kerekes worked in the Canary Islands, at Compañia Cervecera de Canarias (SABMiller/ AB-Inbev Group), in the position of marketing and trade marketing director. He returned to Hungary in 2017, as co-owner and business development director of online marketing agency Experience TEN Kft. Kerekes completed his primary and secondary studies in Hungary and Brazil, earning his degree in International Business/Marketing at the University of Richmond in the U.S.

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as regional head of trade for Eastern Europe, Middle East and Africa. Afterwards, he became group head of brand portfolio strategy,

Danone Hungary Appoints New Leader Dániel Buzási has been appointed country manager of Danone Hungary, starting November 2018, bringing nearly 20 years of domestic and international business experience to the company. Buzási began his career at the Hungarian subsidiary of British American Tobacco in 1999, working in several commercial and marketing positions. He rose to the position of head of trade marketing and distribution in 2008. He then moved to pharmaceutical firm AstraZeneca as head of distribution, Central and Eastern Europe, Nordics, Russia and CIS until 2013, handling an international medicinal supply system. Buzási then returned to BAT, working in the company’s London headquarters

Dániel Buzási responsible for the worldwide renewal of brands such as Dunhill, Kent, Lucky Strike, and Pall Mall. After spending years abroad, he then decided to return to Hungary, working in a completely new role leading Uniomedia, one of Hungary’s leading PR and communications agencies. As the head of Danone Hungary, Buzási’s main task is reinforcing the company’s market-leading position in the country, and utilizing new opportunities on the market.

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Budapest Business Journal | November 30 – December 13, 2018

Special Report Christmas Shopping

Christmas Carries Annual Toy Market on Shoulders

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Drawing on the Past to Create ‘new’ Hungarikums

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An Outlet for Extended Christmas Sales

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Törley Ready to Toast Christmas With new Market Consolidating Sparkler 15 Black Friday Sales Change how Hungary Prepares for Christmas

How does holiday season shopping shape the overall retail market, and what are the latest trends in Hungary?

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Budapest Business Journal | November 30 – December 13, 2018

Special Report | 11

Regardless of the bad-tempered crowds and the hours of queuing, shopping malls remain the main destinations for Christmas shoppers, according to a survey on holiday shopping habits by online classified ads site Jófogás.hu. Only a third of the respondents said they planned to do shopping online: 68% will stick with shops, the survey says. Most (36%) start shopping in early December, but a

surprising

30%

start even earlier in the fall. Some 16% say they will do it one or two weeks before Christmas, while a startling fifth plan to leave it to last minute. (For more on the Jófogás survey, see “Christmas Carries Annual Toy Market on Shoulders”, opposite.) Though many people opt for brick and mortar shops, online stores have nothing to complain about. Some stores can generate up to 60% of their annual online turnover during the festive season, though market average is likely to be at 35-37% this year, according to research by GKI and Árukereső.hu. Online retail revenues in 2018 will exceed HUF 400 million, the study says with retail sale seeing a 16-17% increase between November 16 and December 21 compared to the same period a year ago.

Seeking Inspiration

To find the perfect present, threequarters of internet users trawl online

Christmas Spending According to data from the the Central Statistical Office (KSH), average spending per household in December 2016 on fish was HUF 3,585, while it came to HUF 6,669 on books, HUF 7,772 on spirits, and HUF 9,197 on toys.

shopping channels, GKI finds. Thumbing through stores’ brochures (49%) and window-shopping (35%) are

“These days, far more bottles end up in people’s baskets, so it is not uncommon for our us to load 150,000 bottles per day on our trucks.” also popular. Those polled plan to give presents to up to seven people, the findings show. The season kicked off with Black Friday on November 23, which is expected to result in

more than

HUF 40 million

in online sales – a 50% increase compared to a year ago, GKI calculates. However, unlike last year when sales centered on one day, this year’s Black Friday extends to a two-week period, bringing forward many of the purchases that would otherwise be done in Christmas, GKI notes. The real rush for the most popular categories – toys, beauty products, clothing and fashion items, and books – will start later in December: average spending per online customer will be around HUF 41,000, according to GKI. Sales generally increase with the change in weather and collections rather than the festive season, says Ivett Szemrád, founder/owner of Zenda FSHN – a women

clothes boutique that manages its customer base online, though the actual sales takes place in a shop. “When summer kicked in, customers flocked to the shop,” Szemrád says. She expects the same will happen when it finally turns cold. Shopping malls are said to generate five times more sales during Christmas but that is because many people are wandering in under the pressure to find something, Szemrád says. “In my case, it is different, customers come with a purpose,” says Szemrád, whose shop saw a 30-40% increase during last December.

The Christmas Table

Spar Hungary generates about 10% of its annual turnover in December, which has been its most prosperous period in the past couple of years. The average consumer basket grows by 20-25% during the holiday season while the number of customers increases by about 3%, says Mark Makzelka, head of communications. Opening hours are flexible to serve customer needs; based on the experience of previous years, they are likely be extended on December 22 and 23. Among the most sought-after products are beauty products in gift packaging, toys, table decorations and branded spirits. Small household appliances are equally popular, as are televisions, and gaming devices. When it comes to actual groceries for the Christmas table, fish, eggs, duck, turkey, bacon and smoked goods are on top of most people’s shopping lists. Christmas is an important period for Hungarian wineries as well. “These days, far more bottles end up in people’s baskets, so it is not uncommon for our

us to load 150,000 bottles per day on our trucks,” says Máté Varga, managing director of Varga Winery. The balance tilts towards more expensive wines, but the ratio of whites, reds and roses does not really change for the holiday season, remaining basically the same as during the rest of the year, he says.

Most Popular Gifts for 2018 Every second gift is expected to be an item of clothing this year, followed by: • games (44%); • beauty and cosmetic products (42%); • home decor, DIY and home furnishings (31%); • books, movies and music (27%); • consumer electronics (23%); • smartphones, tablets and accessories (23%); • household and kitchen utensils (22%); • computing devices (19%); • watches, jewelry, fashion accessories (18%) For young internet users, vouchers (15%) and digital products and subscriptions (10%) are the most popular gifts. Source: GKI Digital

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Special Report

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Budapest Business Journal | November 30 – December 13, 2018

Christmas Carries Annual Toy Market on Shoulders Christmas in Hungary is expected to generate half of the total HUF 45 billion revenues in the toy market this year, according to data recently published by toy retailer Regio Játék. Online shopping is on the increase, although visiting malls is still more popular, according to a survey by online shop Jófogás, which thinks people will frugal with buying gifts, similarly to last year. CHRISTIAN KESZTHELYI

Regio Játék included 2,500 participants in its research, looking to uncover the surfacing tendencies expected during the Christmas holidays, in terms of spending on toys. One-third of the parents involved said they are planning to spend HUF 5,000-10,000 on gifts for their children per capita, while 57% of them claimed they would spend more than HUF 10,000 per child. “Along the lines of our estimates, almost half of the approximately HUF 45 billion toy market will be realized during the holiday season. In this period parents buy more – and more expensive – toys for their children,” Dávid Gyaraki, marketing leader at Regio Játék says.

economical with their expenses. Online web store Jófogás carried out online research that has revealed that the majority do not expect to spend more this year than last year, saying roughly HUF 10,000-50,000 will be spent during this Christmas. Despite the increasing tendency in online shopping, visiting malls on a physical rather than virtual gift hunt is still more popular than digital shopping, the Jófogás survey adds. More than

10,000 participants

The research also unveils that creative toys, board games and LEGO sets are the most popular toys to lie under the Christmas tree waiting for excited children to open up their boxes. Each child will find two or three gifts under the tree. Onethird of the children

under

will receive books, in addition to the aforementioned popularities, while children under six will either receive toy cars or dolls.

Rapid Online Growth

While less than a decade ago Hungarians were weary of placing orders online, not to mention being put off by making online payment upfront, nowadays, purchasing in the online space using mobile phones is growing rapidly.

A stunning

61%

of the participants Régio Játék’s study said they are planning to bag at least some gifts online, chiefly because prices can be easily compared, the method is more comfortable and involves no need to stand in line at counters.

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“Compared to last year, the number of purchases made in web stores has grown by 20%, and these transactions initiated from a mobile phone surged by 70%,” Gyaraki adds. He also notes that online discount schemes seem to be efficient tools for grabbing attention, as every second participant included in the Regio Játék research said they keep an eye out for such possibilities. Half of the participants, therefore, start their online spending spree in November. What was originally the firmly U.S.tradition of Black Friday has now taken deep root in Europe. As such, Black Friday appears to have become a point of reference for embarking on the Christmas gift hunt. Seven out of ten participants in the Regio research expects better prices during the Black Friday period this year, with the most popular items being toys, electronic devices, household items and books.

Sparing the Dimes

Although the Christmas spirit has for many become a phenomenon tightly-knit with awarding presents to each other closely connected with commercialism, people in Hungary do seem to take special care to be

answered the online survey of Jófogás this year. Interestingly, 38% of the respondents said they are planning to get gifts for six of their relatives, while 40% of the participants are trying to keep expenses under HUF 50,000. One-quarter of the people expect to spend between HUF 50,000-100,000, while 8% will spend between HUF 100,000-200,000, 3% say they will spend between HUF 200,000300,000, 4% will spend HUF 300,000400,000. Not surprisingly, a tiny fraction reckon they can spend more than HUF 400,000 on their loved ones. The majority of survey takers (more precisely 52%) expect to stay under the expense level of last year, while 13% are calculating with higher expenses, and 35% simply did not know. Some 68% say they will go window shopping while only 32% are planning to carry out their Christmas shopping online. Apparently, people like to be on the safe side, as 36% will start getting the gifts at the beginning of December, while a stunning 30% had already started gathering in their gift harvest during the fall. A thin 16% will start purchasing goods one week prior to the holidays, and 19% likes to burn both sides of the candle, taking the excitement of last minute buying. Buying second-hand products does not only show frugality but displays how environmentally conscious you are too. An increasing 36% said they would look for second-hand products. The users of Jófogás, which is primarily a second-hand online bourse, are reckoned to have saved 200,000 tons of carbon dioxide by buying used stuff. This equals to 45 days of no traffic on the roads of Budapest at all. The best of both worlds: saving money while saving Mother Nature.

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Budapest Business Journal | November 30 – December 13, 2018

Special Report | 13

Drawing on the Past to Create ‘new’ Hungarikums If you are looking for a uniquely Hungarian gift to share this Christmas, you should be able to find some inspiration from the list of Hungarikums that represent what are deemed to be the best of the country’s crafts and values. ÉVA KASZAP

“According to the legal definition, Hungarikum refers to a collective term denoting a value worthy of emphasis that represents the highest quality of Hungarian product with its characteristically Hungarian attributes, uniqueness, special nature and quality,” the official Hungarikum website (hungarikum.hu) declares. That creates a somewhat broad church, in which the Hungarian farmstead (item number 58 on the official list) and the Hungarian ADVERTISEMENT

a special sense of humor only Hungarian countrymen possess,” the company says. The original goal of Folqa was to create a new product for the souvenir market. With time, the range has expanded beyond the figures to also embrace streetwear (T-shirts, bags, and jewelry, even wristbands and drinks flasks that are engraved with maps of Budapest tram and metro lines), kitchen products and stationery. All are brought together under the motto “Souvenirs Hungarians can be proud of.” For more information, check out the Englishlanguage website: folqa.com/en hussar (59) are as much Hungarikums as lace from Halas (47) or Pick winter salami (9). Here are a couple of ideas which, while not official Hungarikums themselves, certainly draw on the ideas and values represented by them. The world of Hungarian traditions is a broad, colorful pallet that has inspired many artists; the creators behind the Folqa design souvenir collection are just the latest. Each Folqa figure represents a region, a local profession, and one of the many beautiful Hungarian folk motifs, says owner Heni Juhász-Váczi and product manager Krisztina Domonkos. “Folqa Collection figures not only represent traditions in contemporary design, but inspire and entertain you with their simple messages to modern people, with

Hungarikum Committee

Under Act XXX/2012, the government established certain Hungarian national values and Hungarikums, and stipulated the definition and methodology for adding an item to the list. That methodology is a multilevel, bottom-up building process called the “national value pyramid system”. The official Hungarikum list counts some 70 items at present, drawn from the fields of agriculture, food industry, health and lifestyle, industrial solutions, cultural heritage, sport, natural environments, tourism and built environment.

Design studio Sator Space (satorspace. com), founded by brothers Dénes and Tomas Sátor, is following a similar idea in creating unique travel gifts with humor and playfulness. Its flagship products are an award winning stress ball called “Eggmap”, and “Huncuts” styled as “the Hungarian souvenirs with a twist”. These includes a set of fridge magnates that allow you to build up an entire socialist era panel house. “Our hope is that these souvenirs will help you relive your Hungarian experiences in your home and inspire you to come back,” the designers say.

The latest enlargement was done in December, 2017 when the body responsible for the management of the list, the imaginatively named Hungarikum Committee, operating under the supervision of the Ministry of Agriculture, registered gulyásleves (goulash soup) and Hollóháza porcelain . Members of the committee are delegated by Parliament, the Hungarian Standing Conference, the ministries, the Hungarian Academy of Sciences, the Hungarian Academy of Arts and the chair of the National Office for Intellectual Property. The head is always the Minister of Agriculture.

Special Report

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Budapest Business Journal | November 30 – December 13, 2018

An Outlet for Extended Christmas Sales Shopping for premium brands at Christmas can be made more affordable if done in factory outlets. This market has been performing far better than general retail in Europe and Hungary as well, with the festive season providing a solid base for annual double-digit growth. Csaba Imre, center manager of Premier Outlet Budapest.

ZSÓFIA VÉGH

The outlet market is different from general retail in many aspects, and that applies for its Christmas season as well. Starting with Black Friday and running until midMarch, the Christmas sales period here is significantly longer than in it is shopping malls or street stores. The month of December accounts for about 10-11% of annual sales both on the general and outlet retail market, says Csaba Imre, center manager of Premier Outlet Budapest. Yet, unlike retail, in the outlet market it doesn’t fall right back in the period immediately afterwards, he adds. Large-discount sales kick off right after Christmas to stoke interest; in January, sales decrease to 5-6% of annual turnover, before increasing to roughly

by March

when the final sales take place. The amount of discount offered ranges from 30-70% (December) and 50-70% (January and February) to up to 80% in March. So the peak season runs from November to March, at least in Hungary. In different markets, for example, at Cinqueterre in Italy, peak season coincides with the high

summer season in tourism, says Thomas Reichenauer, managing director of Retail Outlet Shopping, which manages the Premier Outlet Budapest center in Hungary. As trade ramps up, marketing activity is getting more intense in the run-up to Christmas. Beyond the use of tools such as billboards, radio ads and social media channels (including bloggers and social influencers) there are, of course, Christmas decorations and LEDlighting and a Christmas market with stands selling food and beverages and small artisan products. Because of the location (at Biatorbágy, Budaörsi út 4, about 20 km west of central Budapest), it is easier to recreate the ambience of a rural Christmas street or market, Imre says.

More Than Shopping

Shopping habits are also different from those detected in retail stores or shopping malls. Because of its location, roughly eight out of ten visitors end up buying something when visiting the shop as opposed to, say, a mall where there is a lot more window shopping. This explains the owners’ strategy of turning the outlet from a place of purchase to a place where shopping is only part of the program. In line with international trends, they want to attract more visitors

by providing an amusement center with restaurants and programs for families. After Christmas, tactical marketing becomes more enhanced. “We need to communicate the bargains one can get here, the advantage of shopping at our outlets,” Imre says. Unlike luxury brands, the catchment area for premium brands is smaller, Imre says. This is because customers of luxury brands tend to be willing to travel further to reach a shopping destination (even going abroad, if necessary). “We are not targeting luxury brands here,” says Reichenauer who used to be managing director of the Parndorf outlet center in Austria, which does sell luxury brands. To have a luxury outlet market a strong high street is needed, which Budapest is currently lacking, Imre says. The aim is to convert the location into a shopping/entertainment center. This Christmas it is the market with small wooden cottages and mulled wine, lighting and decoration that serves that purpose. Afterwards, the site will undergo a facelift, with the restaurant and many other parts being revamped. The center saw 67% growth between 2011 and 2016. Spending per person has

Outlets Growing Despite Online Challengers Despite a relatively high density and the effects of online shopping, the market for outlet centers in Europe is still increasing at a constant rate. Indeed, it has been outperforming the general retail market in growth terms. According to data by consultancy FSP, today there are 213 outlet centers operating across Europe (excluding Turkey), with total provision of 3.7 million sqm. In the last decade, the provision of outlet floor space in Europe has increased by nearly 50%, FSP says. Outlets are one off the most successful retail channels for growth, according to the industry report. Sales have risen by 45% from EUR 11.5 billion in 2013 to EUR 16.4 bln in 2017, ten times the general rate of growth in European retail sales. Luxury outlets lead on performance, with 46% more growth than the industry average. Some markets are performing better than average, including those of Hungary and Poland, The main reasons for growth are a less saturated market and the above-average increases in salary rates, says Thomas Reichenauer, of Retail Outlet Shopping, which manages the Premier Outlet Budapest center in Hungary. Even in more saturated markets, such as the United Kingdom or France, outlet stores still have some growth potential, experts say.

increased by 40% since 2012. In the past three years, the growth rate has been more than 10%, which suggest that some of the turnover of general retail has shifted to this segment, Imre says. The addition of many more brands to the existing line-up,

19 since

fall 2016 contrary to roughly two per year before, has also helped increase revenues. By next year, the management aims to have 20% more visitors.

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Törley Ready to Toast Christmas With new Market Consolidating Sparkler Törley, Hungaryʼs market leader in sparkling wines, has launched a new dry pezsgő product aimed at helping wean customers away from sweeter bubbly towards the dry end of the spectrum. KESTER EDDY

Törley Muscosecco is a champers made from Cserszegi Fűszeres grapes, but instead of adding sugar (as is traditional) to make up the sweetness so beloved by most Magyar revelers, the cellar masters have blended in juice from the Irsai Olivér grape. While technically the result is a dry sparkler with just

20 grams of sugar per liter – the muscatlike notes and aromas disguise the dryness, making it “feel” like a sweeter product to the imbiber. “There is a big part of consumers, typically aged 30-35, who want to change from sweet to dry, [but] this step for some is huge, because they [yearn] for sweetness,” György Kovács, Törley’s chairman told the Budapest Business Journal in an interview. “Törley Muscosecco is dry, but to compensate for the [reduction in] sugar, with this very good aroma, this very aromatic taste, [the customer] does not have any feeling of.… sacrifice,” he said. The aim is to create a “bridge” product, enabling pezsgő drinkers to more easily move on to drier wines as their palates mature. “We belong to the Mediterranean countries [in terms of taste]; round about 60% of Hungarians drink sweet sparkling wines. Perhaps they will drink [Muscosecco] for two, three, maybe five years – and after this, they can change to a normal dry,” Kovács said. “You know, with age, the human taste tends to like more dry, and we want to offer them exactly this chance.”

Officially released only in November, this “dry-but-sweet” bubbly is expected to retail at some HUF 1,000 – an affordable, mid-range price in terms of the domestic sparkling wine market. However, a late November search around the shelves of two Budapest supermarkets, one Tesco, one Spar, failed to locate an example of this latest effervescent concoction.

Bridging Bottle

“Törley Muscosecco will be in stock at Tesco from December. We [believe it will be]... a bridge between sweet and dry sparkling wine and a good way to introduce customers to a less sweet product,” the Tesco press office assured the BBJ in response to enquiries. That will make it in time for the ChristmasNew Year buying frenzy – famously making December the key month for sales of champagne,

Special Report | 15 regardless of brand. Tesco, for example, reports 40% of annual sparkling wine sales in the last four weeks of the year. It should also justify Törley – which claims 70% by value of the domestic sparkling wine market – popping a few of its own pezsgő corks at the staff Christmas party. Total sales (including still wines) in 2017 nudged the

HUF 19 billion mark,

and are on course for a 4.1% rise this year, in part based on increasing sales of high-end brands. “We also see that customers rather choose pricey products/ brands than cheaper ones… and... they prefer well-known brands like Törley,” the Tesco press office wrote, confirming this trend. Not that the Budafokbased Törley can rest easy. As Mark Maczelka, head of communications at Spar Magyarország Kereskedelmi Kft., points out, seven international brands (Martini, Gancia, Garrone, Cinzano, Veuve, Moet and Dom Perignon) jostle for space with domestic champers on its supermarket shelves. And, he says, sales “are growing”, even if, so far, their market share is unchanged.

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Budapest Business Journal | November 30 – December 13, 2018

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Dunavox Professional wine storage. Our wine coolers represent the highest quality, from designing, through to the selection of materials. We always keep quality and satisfaction in mind. Elegant appearance, quality materials, and state-of-theart technology characterize the models. Find the perfect Christmas gift from our selection. www.dunavox.com

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Budapest Business Journal | November 30 – December 13, 2018

Black Friday Sales Change how Hungary Prepares for Christmas This November could be the first to overtake the December shopping season in terms of retailer revenue – at least in e-commerce. ZALÁN ZUBOR

Traditionally, most Hungarians don’t start their Christmas shopping before early December. Until recently, the last two weeks before the holiday were the peak season in retail. According to the National Association of Retailers (OKSZ), shoppers spent more than HUF 100 billion in supermarkets and retail stores on gifts between the December 9 and 24 in 2017, about as much as on perishable goods over the same period. This year, however, due to the rising popularity of Black Friday sales and

online stores, the peak season in commerce might come earlier. “In 2018 we are anticipating a turnaround. Our forecast shows that spending in e-commerce will be higher in November than in December,” said Balázs Várkonyi, CEO of Extreme Digital, one of the leading Hungarian online marketplaces, at a press conference last week. According to Várkonyi, last year December accounted for 60% of the Christmas season (starting on November 16) revenues for Hungarian online stores. By contrast, in Romania, November revenues were more than 20% higher compared to December. Romanian retailers started advertising Black Friday sales about five years earlier than

their Hungarian counterparts, leading to earlier Christmas shopping in the country. This trend is expected to come to Hungary as well. Although last year, less shoppers were drawn to Black Friday sales than in 2016, both online and offline retailers feel growing pressure to hold November sales to stay competitive. Currently, Black Friday discounts are launched primarily by online stores: more than 80% of online businesses and 60% of traditional stores have some kind of discount.

The Christmas Backlog

Apart from lower prices, there is another reason Hungarian costumers might want to buy Christmas gifts earlier. In

Online Shopping Share on the Increase Both the number of e-shoppers and the frequency Foreign Purchases Hungarian online shoppers are of online buying have seen strong growth over using foreign webshops more frequently. Since 2015, the number of Hungarians the past few years. There are two main drivers of ordering goods from abroad has risen 1.5 million to 2.7 million. It has e-commerce growth in Hungary. The development from especially high relevancy as a new European Union regulation enters level of the digital economy, especially internet into force as of December 3 that aims and device use, is a key direct driver, while net to prevent discrimination based on customers’ nationality, place of monthly earnings, inflation and household residence or place of establishment, including unjustified geo-blocking, consumption, all have an indirect influence in cross-border transactions on e-commerce development, says associate between a trader and a customer for the sales of goods or the provision professor of University of Miskolc, Szabolcs Nagy. of services. ÉVA KASZAP

“E-commerce is not the future any more. It is the present,” said Mastercard product specialist, Máté Nemes declared at the latest Portfolio Banking Technology conference. Between 2017 and November 11, 2018 the number of active Mastercard cardholders in Hungary increased by 23. Despite the fact that the most popular payment method for e-commerce in Hungary is still cash on delivery by courier service, Mastercard recorded the most significant growth among frequent bankcard users: its rate of five transactions a month was up from 10.3% in 2010 to 15.7% in 2016, Nemes added. The trend is illustrated also by research conducted by internet research

and consulting firm eNet. The net volume of online retail trade in Hungary exceeded the

HUF 500 billion milestone

in 2017, totaling HUF 545 bln in the entire year. The e-tail sector boasted more than tenfold growth over ten years, rocketing from HUF 46 bln in 2007, it says. The online retail market sector generated significant expansion of 27% in 2017 compared to previous year. In terms of online shopping, information and entertainment electronics, general and sports clothing, as well as toys and presents generate the highest online turnover figures. The fifth largest product category is now furniture, home textile and lighting, ousting household machines and white goods from the top five, says eNet.

Research firm GKI Digital publishes a regular list of the top ten e-commerce companies in Hungary. According to the latest edition, Extreme Digital, emag,

the last two years, the Hungarian postal service and many delivery companies were overloaded with orders in the weeks before Christmas. In 2016, thousands of packages were delivered late, some not arriving until January. In the following year, the postal service even advised people to order their Christmas presents in October to guarantee timely delivery. While several online stores boosted their delivery services or started one from scratch to decrease their reliance on the postal service, many consumers are still anxious about another case of “package chaos” in December. Some businesses try to get an edge by launching their discounts even earlier: traditionally, Black Friday is on November 23, however, some retailers (including Extreme Digital) hold their “discount day” on November 16. Companies also compete over discount rates; however, attention should be payed to how stores are advertising their rates. Last year, several businesses were fined by the Competition Authority (GVH) over their Black Friday ad campaigns. Most commonly, GVH found the use of the phrase “up to” problematic. According to the authority’s ruling, a store may only advertise its biggest discount (i.e. “up to 80% off deals!”) as long as at that discount is available on at least 10% of its products.

and Media Markt make up the top three places. Overall, the top ten firms

generate

35%

of total domestic e-commerce turnover, according to GKI Digital. Ecommerce News Europe put the e-commerce share of all retail sales at 6.2% in 2017. According to statistics portal statista. com, revenue in the Hungarian e-commerce market will amount to USD 1.888 mln in 2018. Revenue is expected to show an annual growth rate (CAGR 2018-2023) of 7.4%, resulting in a market volume of USD 2.693 mln by 2023. User penetration is 69.1% in 2018 and is expected to hit 73.4% by 2023. The average revenue per user (ARPU) currently amounts to USD 280.50, statista.com says. Hungarian internet users plan to spend HUF 41,000 (about USD 145) on average on Christmas gifts this year, almost 18% more than a year earlier, according to a market survey conducted by GKI Digital.

A CSALÁD ELSŐ TAGJA: GUCCI BLOOM A HÍRES GUCCI CSALÁD A BLOOM NŐVÉREKKEL BŐVÜLT „Egy telt, fehér virágos illatot képzeltem el, amely egy szempillantás alatt hatalmas, illatos virágokkal és növényekkel

Kiváló minőségű, magasan koncentrált, természetes összetevők

ötvözete.

tubarózsa

csodálatos

alkot

páratlan

jázminnal.

illatharmóniát

A parfümgyártásban első alkalommal használt illatjegyet is tartalmaz: a loncot. A növényből nyert illatjegy

gazdagon benőtt kertbe repít el. A kert épp olyan gyönyörű,

enyhén púderes és édes. Nőies illata tökéletesen illik

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a Bloom virágcsokrot idéző kompozíciójába.

A Gucci Bloom ennek a képzeletbeli kertnek az illatát idézi meg.”

A nők eredetiségét és sokféleségét ünnepli

Alessandro Michele

A KÖZÉPSŐ TESTVÉR: Ezzel a gondolattal kezdődött a különleges Gucci Bloom

GUCCI BLOOM ACQUA DI FIORI

trió története. Az első, teljes egészében Alessandro

Megalkotásában Alberto Morillas mester parfümőr is

Michele elképzelése alapján megalkotott illatcsalád, egy

közreműködött. Az új illat megtartotta a Bloom eredeti,

modern ﬁlozóﬁát közvetít, amely a Gucci Ház iránymutató

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víziója is egyben: felkarolja a női lélek mélyről fakadó

bővült, mint például az intenzíven zöld és üde vizes

szabadságvágyát, hogy a nő azzá válhasson, aki lenni

jegy, a zöld Galbanum és a törékeny feketeribiszke

szeretne. A kreatív igazgató által megálmodott színek, dekor

rügy.

és minták hangsúlyozzák

a nők természetes

Az ifjúság sugárzó vitalitását és energiáját állítja

szépségét, kifejező erejét

középpontba

és egyediségét. Virágzó szépségűek.

Ezen a

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Morillas parfümőrrel. Főként a nőiességet árasztó rózsa és az Osmanthus virág érvényesül, az eredeti illatban is megtalálható jegyek között. A meghatározóan virágos jelleg mellet olyan fás akkordokkal is kiegészül, mint például az intenzív gyömbér. Ellenállhatatlanul vonzó illat

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Budapest Business Journal | November 30 – December 13, 2018

Holiday season ///briefs

premium products: almost half of the sales volume is still concentrated in the last two months of the year, but consumers are becoming more conscious about high quality sparkling wines, Kovács said. Sweet sparkling wine now accounts for less than 60% of domestic sales, he added. Exports generated one-third of turnover. Törley’s biggest markets abroad are Sweden and Canada. In Quebec, its Hungária Grande Cuvee Brut Kanada brand is market leader. Törley expects further revenue boosts due mainly to increased domestic consumption, Világgazdaság said.

Hungarian Internet Users to Spend HUF 41,000 on Gifts This Christmas

Christmas Shopping Best Sellers are Fashion and Travel Some 42% of online shopping is generated over the Christmas period, piacesprofit.hu reported. Hungarians place orders mainly from China, the United Kingdom, Hong Kong, Germany and the United States. According to online payment service provider PayPal, the popularity of Black Friday and Cyber Monday is growing sharply in Hungary: the number of online purchases increased 13% in 2016 and 40% in 2017 compared to the previous year. Although this seasonal shopping volume was mainly generated by cross border trade, domestic retailers are also catching up. According to the survey, 17% of Hungarians opt for shopping in domestic webshops at Black Friday. Some 79% of surveyed Hungarian adults bought online at least once, but four out of ten Hungarians said there was no need for a special occasion to buy from a foreign webshop. Hungarian buyers prefer to buy jewelry and watches (68%), toys and hobby products (63%), and clothing

(60%) from abroad. As for purchase value, Hungarians spend most on travel (average HUF 60,420), toys and hobby products (HUF 8,498), and entertainment and education (HUF 4,869).

Városliget Ice Rink Opens for Winter The capital’s biggest and oldest ice rink has opened for the winter months, according to the ice rink’s official website. The rink is located right next to Hősök tere, in a unique and beautiful environment, providing various facilities such as renting and sharpening of skates and coaching. Skating hours are between 9 a.m. and 1 p.m., and from 5 p.m. to 9 p.m. each day, except weekends when it opens and closes an hour earlier. A ticket costs HUF 1,500, while children up to the age of six get on the ice for free, according to mujegpalya.hu.

Törley Gross Revenue Reaches HUF 19 bln in 2017 Gross revenue of Hungarian sparkling wine maker Törley came close to HUF 19 billion last year, managing director

Do you know what this is?

It’s only one reason why you should have a bite of real China. But we could list the reasons for 100 days.

György Kovács said in an interview in business daily Világgazdaság. Domestic turnover rose 4%, lifted by higher sales volume and the growing popularity of

Hungarian internet users plan to spend HUF 41,000 on average on Christmas gifts this year, almost 18% more than a year earlier, according to a market survey conducted by GKI Digital and Arukereso.hu, propeller.hu reported. About 77% of respondents said they plan to buy their presents in domestic webshops while conventional shopping channels such as plazas and shopping centers also remain popular (64%). About 18% said they want to order presents from abroad, propeller.hu noted.

Europe’s Fourth Most Beautiful Advent Fair at the Basilica The annual Advent Fair opened again this year from November 23 at St. Stephens’s Basilica in Budapest, for the eighth time running, according to a press release sent to the Budapest Business Journal. The event is considered the fourth most beautiful Christmas fair on the Old Continent according to Europeans, the press release claims. Besides the unique 3D light show projected on the facade of the Basilica, the spectacular and adventurous seasonal meeting point offers a free skating rink, special handcrafted items, local food and drink specialties until January 1. The fair will also host caterers who offer vegetarian, gluten-free, diabetic,

and vegan dishes. The fair is an exceptional opportunity for those seeking to donate and help those in need. Hungarian Interchurch Aid has been a partner of the event for seven years. This year, many activists, diplomats and celebrities have joined a campaign to bake thousands of gingerbread hearts at the fair’s bakery to raise funds for charity. In the public poll of European Best Destinations, the Advent Fair at the Basilica was again listed among the top 20 nominees for best destinations (the only Hungarian event to make the list) and might even win a trophy this year, the press release adds. Photo by Fotógyár/Gábor Mózsi

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Budapest Business Journal | November 30 – December 13, 2018

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1552 certainly has the edge when it comes to setting. It’s inside what must have been the castle keep and offers great views over the town, even in the rain.

Three: the market

A Magical Time out of Time in Eger When my Hungarian partner told her sister she was taking me to Eger, around an hour’s drive northeast of Budapest, her sister laughed and said “What are you going to do?” It was late November and cold, and it snowed and rained. We spent much of each day holed up in our hotel room. But I could happily have stayed until the New Year. DAVID HOLZER

Ever the intrepid journalist, I interviewed Ádám Sarusi, the fresh-faced manager of Eger’s tourism office. I asked him to recommend five things for us to do. “You should go up to the castle,” he said. “Also, you have to see the library in the Lyceum. It has a letter from Mozart. There’s a camera obscura, one of just three in the world. You must visit the Turkish baths. There’s the Beatlees museum. And then there’s the cuisine of Eger. You have to try and get to the Valley of the Beautiful Women. Oh, and there’s the Beatlees museum.” Hungarians pronounce Beatles ‘Beatlees’. I like that. “Why is there a Beatlees museum in Eger?” I asked. “The guys who started the museum are fans and wanted to show their collection of souvenirs to other people. I don’t think any of the Beatlees have been here.” “Is there a special type of food that’s associated with Eger?” “Try an Egrigomb,” Ádám said. “They do them at Falánk Fanny on Széchenyi István utca.” I thanked him and headed for Falánk Fanny. There was a picture of an Egrigomb on a sign outside the place so you can’t miss it. The correct name is Gözgombóc.

If you’d like to rub shoulders with the native Egri, this is the place to go. And if you prefer more down to earth Hungarian food, the upstairs market has a corner set aside for cafés. Go early enough in the morning and choose from a freshly fried, crispy, golden array of fried just about anything. The lángos are gigantic, too. You can also pick up membrillo, or quince jelly, as it is also known. In the United Kingdom, membrillo is expensive because, I guess, there aren’t many quince trees left. But, in Hungary, it’s cheap. I was intimidated into buying three different sorts of membrillo from a trio of little old ladies sat in a row who reminded me of Macbeth’s witches.

Four: the minaret Every morning, I found myself drawn to the minaret. Maybe it was the influence of Grindelwald but I imagined it as some sort of ancient Turkish transmitter of magical rays or a mystical space ship. I wouldn’t be surprised if, on certain nights, hooded figures file inside and have cosmic adventures on the astral plane.

Five: just wandering around Sunset at Eger. The minaret is at center right. It’s a sort of bomb-shaped pancake filled with plum jam, plopped into a lake of vanilla custard and topped with a mixture of poppy seeds and sugar. Do try an Egrigomb – they’re seriously sweet and central heating for the stomach – but be prepared to be so full that you can’t eat again for several hours. In the end we didn’t try any of the five things Ádám recommended. But here are my own five reasons, in no particular order, why I love the place and am sure you would too.

One: The Uránia Cinema On our second night in Eger we saw “Fantastic Beasts: Crimes of Grindelwald” at the Uránia Cinema in the center of town. The film was in Hungarian. I’m not a fan of the whole Harry Potter thing so I don’t know who anyone is. It was also in 3D so watching it felt like being drunk. But I think you could probably watch anything in the Urania Cinema and not care. It’s a kitsch joy. There are even tables for you to put your tortilla chips and dips on so you don’t drop them down yourself in the darkness. Watching the movie, I began to wonder if Grindelwald might be Hungarian. According to the backstory I read on The Harry Potter Compendium website later, his first name is Gellert and he “was born around 1882, probably in Hungary or Central or Eastern Europe”. Makes sense.

Two: fine nouvelleHungarian dining Much as I love Hungarian food, there’s very little variety. So, it was a nice

change, and easier on the digestion, to try the 1552 and Macok restaurants. These specialize in nouvelle-Hungarian cuisine: the same thing you’d find in traditional joints but much better prepared with extra ingredients, including in one instance cauliflower dyed purple, and on bigger plates. My partner is vegetarian, so she usually ends up having to eat fried cheese wherever we go. She rated the Macok’s fried cheese higher than that of 1552. The venison ragout and gnocchi I had at 1552 was more satisfying than the fried pike-perch I had at Macok. I guess that makes both restaurants even. ADVERTISEMENT

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You don’t really need to do anything in Eger other than wander. Grindelwald aside, the air is thick with magic. They couldn’t look more different, but the ancient cobbled streets below the castle reminded me strongly of a town I’ve visited in Morocco called Chefchouen where the buildings in the medina are painted blue. Eger is every bit as beautiful and intriguing. There are also more tanning salons and tattoo parlors. I’m sure Eger is splendid in the summer. But, if you want to really get in the mood for Christmas, I’d recommend a trip sideways in time. Even if it’s only for a day.

Read about all the things we didn’t do at www.ieger.com.

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Budapest Business Journal | November 30 – December 13, 2018

Here’s to a Gloriously wet November An anything but dry second half of November, both in terms of the amount of rain falling and the wine flowing, saw a flurry of events for wine lovers with lots of new wines to whet jaded palates. ROBERT SMYTH

Showcasing “natural wines” – one of the hottest and also most controversial topics in the world of wine – the annual “Mitiszol?” (literally “What are you drinking?”) event, went off smoothly rather than with a bang, in the suitably contemporary setting of Millenáris on November 17. Smoothly in that these minimumintervention wines made without the use of pesticides and herbicides and similar artificial products, with natural treatments such as copper, sulfur and orange oil used to spray the vines, have now reached a certain level of consistency on the part of Hungary’s exponents of the art, which also includes a merry band of ethnic Hungarian winemakers across the border into Slovakia. This year, there were notably fewer unpleasant twists and turns to the flavors (across several vintages) brought about by mother nature, which is harder to defend against when you rely on natural treatments only. Those who practice organic – or the even more hard-core biodynamic – winemaking will tell you that it can be difficult at the beginning of the transition over as the vines and vineyards have become reliant on synthetic pesticides and other treatments. However, after a few years, the vines recover themselves and become more robust and are able to defend more for themselves, and produce better, healthier fruit – and also better wines, or so the argument goes. The proof was in the pohár (glass) at “Mitiszol?” I, for one, buy into the notion that wines made with minimum

intervention, fermented from indigenous yeasts are the best articulators of terroir, which is ultimately what we want to taste.

Early Harvest

A Junibor (an association of young winemakers) tasting of new wines from the 2018 vintage, held at DiVino Gozsdu on November 23, featured wines made from grapes that had been harvested very early in this consistently very warm vintage. They were picked early in order to preserve the acidity, which can drop off quickly if the grapes are left out on the vines.

I, for one, buy into the notion that wines made with minimum intervention, fermented from indigenous yeasts are the best articulators of terroir, which is ultimately what we want to taste. However, this was not always achieved with many of the wines; in fact, one or two were on the flabby side. Although most are in good shape now, it might be better they were drunk in the short-term rather than laid down – indeed many of the wines are made for early consumption anyway. Perhaps this is a sign of things to come, should temperatures keep rising, although it should be noted that 2017 actually saw higher temperatures reached over, while in 2018 it was hot for most of the growing cycle.

From the Kunság, Hungary’s largest wine region and part of the Great Plain, Frittmann’s Irsai Olivér 2018, harvested at the beginning of August, had fuller body than usual for the wine and retained enough acidity to carry that weight. This is a grape that’s too often upfront on the nose and pale in comparison on the palate, but this had good balance. Jeckl Vadóc Portugieser 2018 from Villány was light-medium bodied, fresh and zesty (yes! sufficient acidity) with restrained tannins and juicy raspberry and cranberry notes. A nice example of the grape and the ideal early red. From Csopak, St. Donát’s Magma Kékfrankos 2018 is already in great shape with its aromas of potpourri and sour cherry, followed by smooth and ripe palate. Producers from Somló, Hungary’s smallest wine region but a giant in terms of the expressive whites it produces and for its place in the upper echelons of Hungarian wine culture, came to Budapest on November 23 for a tasting of mainly the 2017 vintage at the Stefánia Palota. A trio of ultra-talented young producers, who teamed up to form the Bazaltkör Egyesület have now released their first joint wine (first mentioned in this column in May) – Bazaltkör Juhfark 2017 – whereby Bálint Barcza (Barcza Pincészet), Péter Tóth (Kőfejtő pince) and Tamás Kis (Somlói Vándor Pince) put together their finest Juhfark musts, taken from grapes from their best plots. The wine is a blend of three different barrels of Juhfark, one from each winemaker, with the barrels coming from the Trust Hungary cooperage and each barrel possessing different characteristics, with two coming from

l eon a r do da v i nci and the Budapest Horse and Rider

museum of fine arts budapest 31 october 2018 – 6 january 2019

the Zemplén hills in northeast Hungary (one of which was steamed) and one coming from France. The wines were fermented and aged in the barrels for seven months.

Savory and Complex

“Juhfark needs the oak,” said Kis, who uses stainless steel for most other varieties. The wine is savory, long and complex with notes of ginger and eastern spices. It costs HUF 5,000 directly from the producers. Tóth from Kőfejtő, who worked in Marlborough, New Zealand, for Yealands and in Szekszárd for Merfelsz, before settling down in Somló where he has five hectares, is making some really fine wine. In need of a bottle of wine for the evening from the Somló event, it had to Kőfejtő’s Cuvée 2016 – 50% Olaszrizling with the other three main Somló grapes of Furmint, Hárslevelű and Juhfark contributing the rest. HUF 3,335 from Bor és Más. István Spiegelberg also showed a stunning range of wines from across several vintages. He says that Juhfark needs just a few grams of residual sugar to soften the impact of the grape’s often searing acidity, advice given to him by Angela Muir, Master of Wine. Down in Villány on the same day, another Master of Wine, Peter McCombie, told my colleague Zsófia Végh on the sidelines of the Cabernet Franc conference that he believes that the two worlds of the big, robust Cab Francs (on which the region’s reputation was built but is now getting tired for many) and a new, fresher, lighter style can peacefully co-exist. He also said that a touch of leafiness or herbaciousness – suggesting less ripeness rather than a lack of ripeness – makes a good Cabernet Franc. I found this, as well as delicious red and black fruit, smooth and round tannins, body and balance in Ruppert’s 2013 Cabernet Franc (HUF 14,000 for a magnum at Bortársaság).

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Budapest Business Journal | November 30 – December 13, 2018

PRESENTED CONTENT

Óbuda Social Circle Celebrates 30 Years of Music and Culture

Socialite | 23

instance.” As an example, she noted: “The chamber orchestras do not only rehearse and prepare for concerts at the Academy of Music here, but they also perform in the house.” However, the family atmosphere entails a lot more. The Circle had a number of unique events recently, like the ZeneZug (Music Corner) Festival. “The Budapest Strings utilized the homely corners of the building during the ZeneZug Festival, and there really was music everywhere,” the director recalled. Why is it worth visiting the Óbuda Social Circle for foreign music lovers? “Music is an international language; 80% of our programs are music events.” said Harsányi. Guests may enjoy not only classical, but “good quality, entertaining” popular light music concerts, as the house has partners include the Franz Liszt Chamber Orchestra, like the Budapest Ragtime Band and Blue BENCE GAÁL the Budapest String Chamber Orchestra, Danube Concert-Salon Orchestra. the Anima Musicae Chamber Orchestra, With the Social Circle’s current season Asked what has been the house’s most and the Óbuda Chamber Orchestra, which well underway, the house can already boast memorable event, the director said there has been operating for 64 years.” successes such as a Bernstein anniversary is no self-explanatory answer, as it had Of the programs, she said that every season evening, which Harsányi enthusiastically hosted numerous programs. begins on the World Day of Music and it described as “very well done”. “We always strived to make programs that traditionally ends with the birthday concert The Circle does not only offer musical fit the house’s milieu, making them unique of Anima Musicae on June 20. During the programs. The director said that it also and of high standard,” she noted. “Continuity summer, guests can attend operas, concerts commemorates artists that it considers Mária Harsányi its own, such as writer “...Gyula Krúdy, and roots are of paramount importance to us.” and theatrical acts in the Circle’s gardens. She added that the Social Circle carries on On October 1, a book about the who spent the last three years of his the traditions of a café turned cultural house, institution’s history, also electronically life at the building that now serves as contains three studies about the building, first named after Attila József in 1956, accessible and downloadable from the the Hungarian Museum of Trade and alongside its past as a café and cultural then renamed in honor of Leó Frankel Circle’s website, has been published. Tourism, and frequented the café which house. A CD selection of the past ten years’ was then operating in the building of in 1966, alongside the heritage of Judit Personal Confessions musical recordings has also been released. Merényi’s 20-year tenure as director. the Social Circle at the time.” The Circle “It also contains the personal confessions Asked what makes the house and its Regarding the musical events of the commemorates both the birth and death of performers and creative artists,” the programs unique, she answered: Social Circle, she said: “The house is the of the writer, as well as the recently director noted, saying that the book “Due to the family atmosphere, for home of a musical family. Our regular acts deceased Péter Esterházy.

The Óbuda Social Circle, one of Budapest’s most renowned cultural institutions, celebrates its 30th anniversary. The Budapest Business Journal discussed the circle’s past, present, future, and what makes it unique with Mária Harsányi, who has been its director for ten years.

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