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Inquiry starts into sugar industry privatization

Parliament has set up a committee to lead an inquiry into the privatization of Hungarian sugar factories.

Hungary had 12 state-owned sugar factories in 1990 but all of them were eventually sold to foreign investors. 

The 16-member body is set to find out who and on what conditions made decisions on selling Hungary's 12 sugar factories in the 1990s, and whether the new owners have kept to requirements stated in the privatization contracts, the Rural Development Ministry said.

The committee will also investigate whether the purchase price for the factories were in line with market prices and why the mills were sold to mainly foreign investors.

According to information provided by the ministry, the committee will scrutinize the responsibility of former governments, mostly members of the Socialist Party (MSzP) and the Free Democratic Party (SzDSz).

It will also be looking into what regulations applied to the sugar industry at the time of Hungary’s EU accession, and how these regulations affected the Hungarian sugar production, prices and employment in the sector.

An EU directive introduced in 2006 encouraged EU farmers to cut sugar production with subsidies, which prompted Hungary to give up 75% of its sugar production quota.

Today, the country has only one sugar factory, which covers one-third of annual domestic consumption, making it heavily reliant on imports.

The committee has 180 days to publish its findings.