Nitrogénművek ordered to pay HUF 11 bln fine before appeals are exhausted

Figures

The Kúria, Hungary's highest court, has decided that Nitrogénművek, the country's sole producer of artificial fertilizer, must pay a HUF 11 billion Competition Office (GVH) fine before the company uses up its chances for legal recourse, GVH said, according to a report by state news wire MTI.

Nitrogénművek had turned to the court regarding a request to suspend the payment until a final, legally binding decision is taken on the company's challenge of the fine.

The Kúria said Nitrogénművek's appeal could "last for years" and dismissed the company's argument that paying the fine would "make its operation impossible".

GVH said it instructed the tax authority to collect the fine, including a late payment penalty, "in the interest of protecting taxpayer money".

The competition authority levied the fine on Nitrogenmuvek and a number of its group members in October, for cartel activity. It also fined Hőgyészi Agrokémiai and Cargill Magyarország, whom, it said, have already paid their fines.

Members of the cartel had set prices and divided up the market, while restricting imports, for years, GVH argued. It added that the illegal practices drove up farmers' input prices and may have fed into consumer food prices.

Nitogénművek told MTI that it had deposited the entire amount of the fine in a domestic bank account over which the court has a lien. The company also said it will file a new appeal based on the changed circumstances since the fine was levied, citing the outbreak of the war in Ukraine, higher energy prices, and rising supply chain risks.

The company's strategic director Zoltán Bige said the company operates in a "strongly seasonal" sector that faces an uncertain energy market environment. Paying the fine voluntarily in the current economic environment would be "irresponsible", he added.

He said that hampering Nitrogénművek's operation over a GVH resolution that may eventually be overturned would result in a "significantly bigger handicap for the national economy". 

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