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FOOD INDUSTRY - 15.01.2004 Bread to cost HUF 200 per kilogram by February Bread has become a matter of politics. Leaflets distributed by Fidesz Hungarian Civic Alliance say that a kilogram of bread is to go up to HUF 212 from the current rate of HUF 145. According to experts interviewed by daily Népszabadság, this price is an exaggeration, however, they do state that a price hike of 15-20 percent is quite possible. This would translate into prices exceeding HUF 200 per kilo. Bread and bakery goods account for a mere 2 percent stake of domestic expenditures in the customer basket. (Nszab, p 1 and 13)
Hungarian subsidiary of Parmalat to be bought by producers? Executives of Parmalat Hungária Rt (Parmalat Magyarország) are having talks in the company’s Italian headquarters on the future of the Hungarian subsidiary with the bankruptcy commissioner of the Italian dairy giant. At the same time, they would like to ask permission to carry on negotiations on the sale of the Hungarian subsidiary. Selling Parmalat Hungária Rt. is what Italian executives would also like. They are of the opinion that the ailing giant can be saved through selling its foreign interests. The case surrounding the Italian company has hardly hit the milk plant in Székesfeghérvár, which has not paid its suppliers since last November. Daily Magyar Hírlap writes that the reason can be that CIB Bank has blocked all the company’s bank accounts, not accepting the parent company’s guarantees. Parmalat Hungária Rt is owing its suppliers HUF 720 millions. The latter ones, however, would not put their claims on the presently unencumbered real estates of the dairy plant, since they would be last on the list in an eventual bankruptcy proceeding. They are rather considering forming a consortium and try and buy the well-equipped Székesfehérvár plant. As potential buyer for the Hungarian subsidiary, the names of French giant Danone and Italian-owned Sole were also circulating earlier. Officials at both companies, however, denied this information. (MH, p 11)
FOOD INDUSTRY - 16.01.2004 Several hundreds of millions of dollars went through Parmalat’s Hungarian offshore company The Italian Parmalat, which is accused of balance counterfeit of 10 billion euros, also has an offshore company registered in Szombathely with capital of several billion forints. Through Canadian and Dutch companies the Italian firm has 100 percent ownership in PDBI Likviditás Menedzsment Magyarország Kft. (PDBI Liquidity Management Hungary Ltd.) that was founded in 1999 with capital of 50 thousand dollars. Since then the company’s capital has increased a lot; in 2002 it amounted to 220 and according to the latest information, to 132 million dollars. The domestic company that provided financial help to various subsidiaries of the Parmalat group was operated in Hungary due to favourable Hungarian tax conditions. A former executive of the firm stated: it is excluded that PDBI Kft. would play a role in the Parmalat scandal. But the testimony of Fausto Tonna (financial director of the corporate group who was dismissed last year) at the Italian prosecution, according to which all Parmalat daughters are concerned with the balance sheet counterfeit, contradicts this. Parmalat Hungária engaged in milk production, which was put on sale as a result of the mother company’s scandal, stated in relation to the case: the company has no ownership share in PDBI Kft., thus it cannot declare about the operation thereof. According to the latest news Austria’s determining milk producer, Nöm AG, which considers European expansion, is also interested in the Székesfehérvár based company that employs 500 people and processes 112 million litres of milk annually. (VG p1, 7)