ADVERTISEMENT

Fresh milk sales growing after VAT slashed

Telco

Milk and dairy products represent a growing business at supermarket chains, with annual revenues reaching nearly HUF 40 billion, reports business daily Világgazdaság. The growth has been partly fueled by the reduction of VAT on dairy products.

According to data released by market research firm Nielsen, milk accounted for HUF 38.5 billion in sales between December 2016 and November 2017 in hypermarkets and supermarkets, corresponding to 193 million liters. This is a growth of 9% year-on-year in value, although a 5% drop in quantity, Nielsen says, quoted by business news portal vg.hu.

The research did not cover small shops, but only hypermarkets and supermarkets. The percentage of UHT milk was 51%, while fresh milk accounted for 49% of all milk sold in such outlets. The vast majority of the milk, 98%, was sold in packages of 1 liter.

In specific chains, the UHT vs. fresh milk split differs. At Tesco, the mix is 65/35, while Spar sells 81% UHT and 19% fresh milk. Tesco, Lidl and Spar buy their milk from Hungarian suppliers, while only Spar purchases a small amount of lactose-free milk from an Austrian supplier.

The cut in the rate of VAT on fresh milk from 18% to 5% this year has led to an increase in fresh milk sales. At Hungarian-owned chain CBA, sales have risen by 10% year-on-year, and at Tesco even more, by 12-14%, while Spar has seen a 5-6% increase.

ADVERTISEMENT

MKIK: Local business tax should be maintained Analysis

MKIK: Local business tax should be maintained

Parl't votes to phase out savings coops integration framewor... Parliament

Parl't votes to phase out savings coops integration framewor...

Roche Szolgáltató appoints P&C business partner lead Appointments

Roche Szolgáltató appoints P&C business partner lead

Budapest airport shuttle bus service expanded City

Budapest airport shuttle bus service expanded

SUPPORT THE BUDAPEST BUSINESS JOURNAL

Producing journalism that is worthy of the name is a costly business. For 27 years, the publishers, editors and reporters of the Budapest Business Journal have striven to bring you business news that works, information that you can trust, that is factual, accurate and presented without fear or favor.
Newspaper organizations across the globe have struggled to find a business model that allows them to continue to excel, without compromising their ability to perform. Most recently, some have experimented with the idea of involving their most important stakeholders, their readers.
We would like to offer that same opportunity to our readers. We would like to invite you to help us deliver the quality business journalism you require. Hit our Support the BBJ button and you can choose the how much and how often you send us your contributions.