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Not asked by government, three tobacco firms submit distribution tender

Food

Imperial Tobacco Magyarország Kft., JTI Hungary Zrt. and Philip Morris Magyarország Kft. are jointly offering a concession of HUF 6 bln to operate a competition-free tobacco product distribution system, creating 500 jobs, a press release said today.

The three firms claim that the government was supposed to offer a public tender for tobacco companies to operate and supply the tobacco retail businesses, however, as such did not happen, the three tobacco wholesaler companies say they chose to offer their own tender to the government.

It was reported earlier that British American Tobacco (BAT) and Hungary’s Tabán Trafik will be awarded a concession to supply retail tobacco shops. The two companies will act together as middlemen between manufacturers and retailers for the next few years. BAT and Tabán are expected to pay HUF 600 mln to the state for the concession.

Imperial Tobacco Magyarország Kft., JTI Hungary Zrt. and Philip Morris Magyarország said they would like to be able to adequately support and operate the profitably of the tobacco retail sector in the future, as such, they also offered an average price margin of 11.46%.

“We believe that it is important for the businesses and for the government as well, to have a transparent and clean tender,” said Lóránt Dezső, executive director at Imperial Tobacco.

The tobacco companies noted that the government pursued the BAT Pécsi Dohánygyár Kft. and Tabán Trafik Zrt. to operate the tobacco retail businesses due to the lack of offers from other companies.

The bill approved by Hungarian Parliament mid-December on the establishment of a centralized distribution company for tobacco products is likely to cause the dismissal of 1,200 Hungarians who work in the business, Lajos Csizmadia, the spokesperson of the tobacco workers union (DDTSZ) told the Budapest Business Journal earlier.

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