Universal tobacco shuts plant in Hungary, moves to Italy

Food

U.S.-based tobacco firm Universal Corporation announced yesterday that it would move its processing plant from Nyíregyháza to Italy, according to Hungarian news agency MTI. The company reportedly expects to pay out $1 million in severance pay.

The move is effective immediately, the company said, and it is necessary to “further increase supply chain efficiencies in the European leaf tobacco market”, MTI reported. Universal Leaf Tobacco Hungary, the local division of the company, reportedly said the move is in line with the company’s strategy to “efficiently adapt its operations to changing market conditions”. 

According to the Richmond Times-Dispatch, the decision was made “in part because of declining demand for Hungarian-produced tobacco”.

The company’s announcement said that the Hungarian subsidiary’s management was able to reach an agreement with the affected employees at the plant in northeast Hungary. While it was not immediately clear how many people would be laid off, the settlements will cost roughly $1 million, the Richmond Times-Dispatch reported.

“Universal continues to be committed to the production and purchasing of Virginia flue-cured and burley tobaccos grown in Hungary and intends to maintain its traditionally strong market presence in the country,” the statement added, according to MTI.

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