Award of Hungary wholesale license hits tender spot

Three multinational tobacco companies have expressed concern that another multinational is part of a venture granted sole wholesale tobacco concession rights in Hungary, according to a story in Hungary Around the Clock, relayed by the TMA.

In a joint statement released today, Philip Morris International, JT International and Imperial Tobacco Group said the Hungarian government’s decision to issue wholesale tobacco concession rights to British American Tobacco and tobacco distributor Taban Trafik without an open tender breached EU rules.

The statement said that the concession placed PMI, JTI and Imperial in a ‘vulnerable’ position because they would be required to provide their sensitive pricing and inventory data to a close competitor.

Dow Jones reported last week that the Hungarian government had announced that BAT would join forces with a Hungarian tobacco trader to supply tobacco shops in the country.

Under the arrangement, BAT and Taban Trafik would jointly pay 600 million forints ($2.2 million) for the wholesale license, Janos Lazar, head of the prime minister’s office, was reported to have said at a press conference.

Hungary monopolized the retail trade of tobacco in 2013 and, in doing so, radically reduced the number of retail tobacco outlets.

Market experts estimate Hungary’s retail tobacco market is worth about 500 billion forints ($1.81 billion) a year.

In December last year, Hungary’s parliament, which is dominated by the governing Fidesz party, approved legislation to introduce a single firm licensed by the state as the only tobacco wholesaler.