Budapest Business Journal 2722

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BUSINESS JOURNAL BUDAPEST

VOL. 27. NUMBER 22

NOVEMBER 29 – DECEMBER 12, 2019

SPECIAL REPORT

Christmas Shopping

SPECIAL REPORT

Hungarian Online Retail Expands Rapidly The Hungarian online retail market is now catching up with international peers.

As Black Friday and the Christmas Holidays bring e-commerce to its annual peak, online retailers are readying themselves for the stampede. 15 SPECIAL REPORT

Budapest a top Spot for Winter Travel Budapest can look forward to a strong Christmas and winter tourist season, with flight bookings to the capital from long-haul travelers up 29% for the period from December 15 through January 15. 16

Sparkling Celebrations

SOCIALITE

It Absolutely Must be Aszú for Advent!

It’s that most wonderful time of the year, to borrow from a famous festive song, when attention eventually turns to Tokaji Aszú, which is Hungary’s greatest gift to the world of wine. 22

NEWS

Massive GDP Growth Surpasses Analyst Expectations

SP

LR EC I A

EPOR

T

Törley, a Hungarian pioneer of champaign-style wine that is now part of the German Henkell business has seen sales volume dip (slightly) but revenue rise, as the Hungarian market moves toward more high end sparkling wines, chairman of the board György Kovács says. 14 BUSINESS

Exceeding analysts’ expectations, Hungary’s economic growth reached 5% in the third-quarter of the year. Now everyone see a near 5% growth rate for the full 12 months; even the projected slowdown in 2020 might not be as bad as previously thought. 3

Efficient Climate, Energy Policy Reform Needed Clean, smart and affordable energy services for Hungarian consumers: these are the pillars of the new National Energy Strategy in the making, the main principles of which were presented at an energy investment conference this month. 7

News

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Budapest Business Journal | November 29 – December 12, 2019

THE EDITOR SAYS

EDITOR-IN-CHIEF: Robin Marshall EDITORIAL STAFF: Balázs Barabás, Zsófia Czifra,

Kester Eddy, Bence Gaál, Gergely Herpai, David Holzer, Christian Keszthelyi, Gary J. Morrell, Robert Smyth, Zsófia Végh.

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The Budapest Business Journal, HU ISSN 1216-7304, is published bi-weekly on Friday, registration No. 0109069462. It is distributed by HungaroPress.

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DIGITAL NATIVES, DIGITAL IMMIGRANTS AND ONLINE SAFETY I had thought the fact that we have now passed the fourweek event horizon for Christmas would be the most shocking statistic to bludgeon my consciousness this week. I was wrong.

In truth, I should not have been surprised; one of the first things I was taught by Ray Dedman, the seasoned chief reporter who served as my mentor when I started out on my journalism career 30-something years ago, was never to assume anything as it would “make an ass out of you and me.”

The statistic that trumped the Christmas countdown is contained in this issue’s special report, specifically in our story on online fraud. Within that, you can take your pick of figures that run from the surprising to the eye watering.

How about the fact that EY expects an increase in e-commerce fraud next year of anywhere from 150% to 300%? That is not a typo. It is true, of course, that as more people switch to online shopping, so the opportunities for online crimes to be committed multiply, but even so...

Then there is the idea that more than 80% of consumers trust that businesses are taking appropriate steps to protect their personal information, even while the majority of businesses and business executives see fraud as a growing concern.

But here is the stat that brought me up short.

Every two years EY conducts its Global Fraud Survey.

When Hungarian business leaders were quizzed in early 2018, just 10% of them said they would ask for the deletion of their personal data stored by businesses,

while almost 50% of the companies said at the time that they were not ready to delete such data, despite it being an obligation set out by the European Union’s General Data Protection Regulation (GDPR) that came into force on May 25 of that year.

In some cases, the growth in online crime is down to generational differences. I was born in 1967, when what computers there were took up entire rooms, and were always depicted in films as looking like oversized reel-to-reel tape players; younger readers can look those up on the internet. In other words, I am not a digital native (brilliantly translated from Hungarian into “digital aboriginal” in one press release we received this week). Indeed, when I joined my first newspaper in 1986, we still used typewriters (again, I direct younger readers to their favored online encyclopedia), but we soon moved to computers; effectively, I grew up professionally in an industry that was an early digital adopter.

The generation before mine had no such experience.

They have an excuse for making what amount to elemental online errors that, sadly, put them at risk of becoming the victims of online fraud. Today’s business leaders should, not to put too fine a point on it, know better. Because, if CEOs can’t – or won’t – look after their own data, why the heck should any customer, let alone 80% of them, trust those same business leaders with their own personal information?

Robin Marshall Editor-in-chief

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Budapest Business Journal | November 29 – December 12, 2019

News///macroscope

Massive GDP Growth Surpasses Analyst Expectations

Exceeding analysts’ expectations, Hungary’s economic growth reached 5% in the third-quarter of the year. Now everyone see a near 5% growth rate for the full year, and even the projected slowdown in 2020 might not be as bad as previously thought.

Christmas Shopping Peak in Hungary, 2004-2018 Growth in retail sales in November-December January-October average retail turnover (bln HUF)

November-December average retail turnover (bln HUF)

ZSÓFIA CZIFRA

Hungary’s gross domestic product grew by 5% according to raw data and by 4.8% according to seasonally and calendar adjusted and reconciled data in the third quarter of 2019 compared to the corresponding period of the previous year, the Central Statistical Office (KSH) reported in a flash estimate.

Compared to the previous quarter, the volume of GDP grew by 1.1% – according to seasonally and calendar adjusted and reconciled data – in the period between July and September. According to the KSH report, the main contributors to the growth were industry, construction and marketbased services.

When placing the data into a European Union perspective, it shows that Hungary’s growth rate of 4.8% (on the seasonally adjusted data) is the highest amongst the

28

member states.

It is worth noting that several countries have not yet reported the data; however, among them only Ireland might produce a higher growth rate, as it registered a 6% GDP increase in Q2 and 7% in Q1.

Commenting on the Q3 data, Minister of Finance Mihály Varga highlighted that Hungary’s data was well over the 1.4% average of the EU member states. He noted that growth was supported by the measures introduced by the Hungarian government, which aimed at improving competitiveness,

Slowdown Ahead

Although a slight setback might be seen in the coming months, a notable slowdown is not expected, Suppan opined. For this year, he expects a 4.9% annual GDP growth rate, which might slow to 3.7% in 2020, however, internal factors might mean there are upward risks to the ratio.

Századvég analyst Gábor Regős commented that there are no signs of a slowdown, with the performance of the Hungarian economy among the best in the EU. He agreed that domestic consumption and an increase in investment volume had pulled the economy upwards.

Similarly to his colleagues’ expectations, he sees that GDP growth will come close to 5% this year. However, in order to maintain the exceptional growth rate, he cautioned that Hungary’s competitiveness needs to be improved, exports should be kept at their current high level, and education needs to be developed.

The internal drivers of the Hungarian economy are so strong that they can efficiently counterbalance the slowing effects of the external environment, said Orsolya Nyeste, head analyst at Erste Bank. In spite of the upbeat expectations, Erste Bank’s forecast was previously the lowest; now, however, the bank thinks that the earlier projected annual growth rate

of

4.6%

Source:

supporting home construction, and better utilization of EU funding. Investment incentives also helped the growth.

Economic Shield

Varga also emphasized that the Hungarian government was quick to decide on defensive measures to shield the economy from the worst of the effects of the global economic slowdown. He said further economy protection measures would be introduced in the spring.

The better-than-expected third quarter GDP data has underpinned analysts’ optimistic expectations for the full year.

Now they unanimously say that the annual expansion of the Hungarian economy

will be

5%,

or very close to it. As for next year, when all institutions have warned that growth should slow down due to external factors, analysts are also more optimistic in the light of the fresh data.

The 5.1% growth rate in the first three quarters of the year will keep Hungary in the top league of the European Union, ING

Bank head analyst Péter Virovácz said. As for the full year, he expects that the growth rate will be very close to 5%, in spite of the fact that some slowdown is expected in the fourth quarter.

He also noted that the effect of the strong growth rate on inflation might be higher, although the National Bank of Hungary is not expected to change its monetary policy, he believes. Stronger growth means that next year’s budget will have a bigger room for maneuver in order to maintain the significant growth rate, he said.

Takarékbank analyst Gergely Suppan said that the main driver behind the strong data was industry, which also produced a significant increase, as well as the retail sector. He noted, on the other hand, that the construction sector slowed a little; however, it was still dynamic in and added to the third quarter GDP growth. An increase in domestic consumption, the slightly decreasing but still robust investment rate and the improvement in the foreign trade balance also contributed to the good results.

will likely be closer to 5%.

Next year, the rate will fall back to 3-3.5%, although household consumption might have a positive effect on the economy. She noted, however, that the limited access to EU funding from next year might have a negative impact on investments, which could drag the growth rate down to closer to 3% in 2020.

Numbers to Watch in the Coming Weeks Just one day after this edition of the Budapest Business Journal goes to print, the KSH will publish third quarter data from the investment market. On November 29, the second estimate of the Q3 GDP figures will be released.

On December 5, we will find out how the retail sector performed in October, and a day later, October’s figures from Hungarian industry will come out. A few days after that, on December 10, the KSH will report on the November consumer price index.

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Kinstellar to Change Managing Partner After 11 Years Having run the Budapest office of Kinstellar since its launch in 2008, and its predecessor Linklaters’ office for two years before that, Csilla Andrékó is standing down as managing partner. The Budapest Business Journal spoke with the firm about the rationale behind the move. more than 15 years and was part of the management alongside her for a long time.

ROBIN MARSHALL

BBJ: What exactly is changing at the office?

Kinstellar Budapest: There will be a change in the management of Kinstellar Budapest office; Kristóf Ferenczi will take over the role of the Budapest office managing partner from Csilla Andrékó as of January 1, 2020.

The management change is due to Csilla’s request for a more flexible arrangement with Kinstellar in order to allow her to spend more time with her family. It is part of a pre-planned and mutually agreed transition process at Kinstellar Budapest, which takes place at a time of growth and continued success following the first 11 years of our operation as Kinstellar. Kristóf represents continuity in the management of the Budapest office as he has been working with Csilla for

WHO’S NEWS

BBJ: What does it mean for the firm and its clients?

Kinstellar Budapest: No major overhaul is planned to the way the office has run its business. As previously said, Kristóf has for quite some time been part of the management of the Budapest office and, since 2018, of the whole firm, and as such he shares the philosophy in which Csilla has managed the office.

Kristóf Ferenczi: Whilst keeping much of the direction of the Budapest office, I will concentrate on capitalizing further on its core practices, as well as exploring the potential for building out new practice areas, business lines and legal service models through which Kinstellar can best service its clients in the 21st century’s fast changing business environment and, generally, bringing the office even closer to our clients.

Csilla Andrékó and Kristóf Ferenczi BBJ: Why now?

Kinstellar Budapest: The office has been very successful and stable for many years, it has grown substantially both financially and regarding its clientele. Our practices are viewed among the market leaders and we have a very experienced, high quality team with strong culture and integrity. We have been contemplating this change for some time and have been preparing for it in the last two years. As such, this seemed the right time to transition into this management change.

BBJ: What role will you play, Csilla, moving forward?

Csilla Andrékó: Having led the Budapest office for 11 years as Kinstellar – and

even before that as managing partner of Linklaters Budapest – and working as a partner for 20 years, I wanted to have a more flexible arrangement with the firm which involves less management responsibilities and a more business and client development focus going forward.

I will remain owner and partner of the firm and will continue my roles as head of Kinstellar’s and the Budapest office’s banking and finance practice. I will focus on further developing the relationship with regional and global banking clients, international law firms and will also pursue other, firm-wide initiatives, including exploring potential business opportunities on the Italian market, where I will spend more time partly due to my family ties, running the firm’s virtual “Milan desk”.

Kinstellar describes itself as Emerging Europe and Central Asia’s leading independent law firm. It was formed in November 2008 from offices in Bratislava, Bucharest, Budapest and Prague spun-off when U.K.-based Magic Circle law firm Linklaters decided to move out of the region and concentrate on larger markets.

Kinstellar (the name is an anagram of Linklaters) has since expanded into Bulgaria, Kazakhstan, Serbia, Turkey, Ukraine and Uzbekistan.

Do you know someone on the move? /// Send information to news@bbj.hu

Zádori Joins Dentons’ Energy Practice in Hungary, CEE Multinational law firm Dentons says it has strengthened its energy practice in Hungary and the CEE/SEE region with the recruitment of Eszter Zádori as partner.

Zádori, who will be based in Budapest, has 20 years’ experience in energy law. She advises major stakeholders in the sector, including transmission system operators (TSOs), natural gas producers, natural gas and electricity trading and sales companies, LPG distributors, as well as conventional and renewable power generation companies.

Eszter Zádori Dentons says that her experience extends from advising on complex commercial, M&A and arbitration matters to counseling in regulatory and compliance questions.

Prior to joining the company, Zádori practiced law at several international

and local law firms. She also served as in-house legal counsel at energy giant E.ON in Budapest.

“It is a pleasure to welcome Eszter to our team in Budapest,” said Hungary managing partner István Réczicza, head of the office’s energy practice. “She adds significantly to our energy sector capabilities in Hungary and across CEE/SEE. Her appointment demonstrates the role of our Budapest office as a hub for sector expertise and client service across the region.”

Sükösd Joins DLA Piper Hungary as Head of Competition Law Péter Sükösd, winner of Wolters Kluwer’s 2018 Compliance Lawyer of the Year Award, has joined the Hungarian team of DLA Piper as head of competition law.

Sükösd previously worked as head of legal and compliance at Metro Cash & Carry Hungary, where he was responsible for managing litigation related to the business activities of the company.

As a competition law and compliance expert, Sükösd has 17 years of experience.

He began his career in 2002 at the Hungarian Competition Authority (GVH), spending more than a decade in various management positions.

During this period, he also served as a national expert at the European Commission, and as a policy analyst at the Organization for Economic Cooperation and Development between September 2007 and April 2009.

As a senior legal manager of British American Tobacco between 2012 and

Péter Sükösd 2015, Sükösd was responsible for the antitrust and compliance matters of the Hungarian and Croatian subsidiaries of the company. Two years ago, he co-founded the Hungarian Corporate Compliance Society, which he currently serves as vice president. He also acts as co-president of the Hungarian Trade Association.

as well as overseeing the marketing, merchandising, logistics, and quality control departments.

Vass’ primary task will be improving inventory management, and implementing innovations in everyday practice. She is also entrusted with providing a wide, reliable, and constantly renewing range of goods for consumers parallel to introducing a new corporate control system.

“The current period poses serious challenges for all of us, as we have set ambitious goals for ourselves, such as a double-digit percentage increase in turnover and the introduction of the new corporate control system, SAP S/4 HANA,” notes Vass.

“Approaching customers and motivating them to make a purchase is one of the

Supply Director Named at Praktiker Following the retirement of Mária Szita, Tamara Vass was appointed the purchasing director of home improvements retail chain Praktiker Kft. Vass started working at Praktiker almost two decades ago, starting as the leader of the company’s marketing department, becoming category manager after returning from maternity leave.

She is now responsible for directing the 30-person purchasing division, the purchases made by 20 Praktiker stores,

Tamara Vass hardest tasks, meaning a lot of challenges and constant renewal, especially in today’s fast, digitalized world.”

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Budapest Business Journal | November 29 – December 12, 2019

Product Availability a Brake on Investment Despite Strong Demand Commercial property investment for Hungary reached EUR 1.1 billion for the first three quarters of the year according to Savills and the total for the year is estimated to be EUR 1.5 bln-1.6 bln.

“Access to good quality product as well as healthy fundamentals explain the sector’s strong performance,” he says.

In Hungary, transaction volume in the office sector is rising while simultaneously falling for retail.

The industrial sector is seen as a hot investment destination and volumes are also increasing in the hotel sector.

“Competition for the best assets has caused a fast yield compression over the past few quarters in the region. The average prime CBD office yield in the five countries was down to 5.26% in the third quarter of 2019,

28

basis points

GARY J. MORRELL

Supply across the CEE region (Czech Republic, Hungary, Poland, Romania and Slovakia) exceeded EUR 8 bln for the first three quarters of 2019 according to Savills.

With regard to the CEE region, a total investment volume of 54% above the five year average was concluded in the first three quarters of the year.

“We see prime yields reaching new, record lows in all the main sectors: a CBD office building has recently been at 4.9%,” comments Adorján Salamon, CEO of Eston International, the Hungarian associate of Savills, at the annual Eston International commercial property conference at Hillside Offices.

“Investors perceive the current situation as appealing and a bigger expansion of investment volume is hindered by the narrow supply of prime products.”

Poland, the largest economy in the CEE region, has captured 56% of the

News | 5

Eston International advised on Oktogon Ház transaction. investment activity in the first nine months of the year with

more than

EUR 4.5 bln.

The Czech Republic saw transaction turnover reach EUR 2.36 bln, according to Savills.

“Investment turnover in CEE has been rising steadily since 2013, by 24% per annum on average, reflecting increasing investor confidence in the region, underpinned by above EU average economic expansion, falling unemployment and growing consumerism,” says Savills CEE research.

Most Attractive

Offices continue to be the most attractive asset class for investment into CEE, accounting for more than 60% of the total investment volume in the first nine months of the year, a strong rise from 45% over the same period in 2018 according to Chris Gillum, head of offices regional investment advisory for EMEA at Savills.

lower than last year and 12 bps below the previous quarter. Prime CBD office yields are lowest in Prague at 3.9%, followed by Warsaw (4.5%) and Budapest (4.9%), while higher yields of 5.75% and 7% can still be achieved in Bratislava and Bucharest respectively,” comments Gillum.

Salamon argues that rising construction costs, 10% year-onyear for the first half year, will help prevent the markets in Hungary from overheating on the supply side. The change in the peception of Hungary from an investment perspective is that he no longer has to explain the details of the market to international investors.

With regard to market liquidity, he estimates that a prime located recently completed class “A” office development could attract as many as five-to-eight concrete offers, while a complex in a location further out could attract 15-20 offers.

With the low supply of investmentgrade assets, more investors could look to the value-add, redevelopment option of older product. Eston International has established a service that combines design and construction as part of a single utility according to the consultancy. Eston has worked on the redevelopment of the 17,000 sqm Buda Square for investors at a cost of EUR 4.5 bln.

CTP Announces Speculative Developments The CEE industrial developer and logistics park operator CTP has announced plans to build around 150,000 sqm of speculative industrial space in the Hungarian market in 2020 in response to what it describes as “brisk demand”.

GARY J. MORRELL

To the southeast of Budapest at CTPark Budapest East-Üllő, CTP is developing a 37,300 sqm industrial building. At CTPark Budapest South in Dunaharaszti the company is planning a 36,700 sqm facility in addition to the 23,000 sqm building that is due to deliver in the near future.

At CTPark Budapest West, in Biatorbágy, CTP is planning four new industrial development projects that will deliver a total 75,000 sqm of space.

Outside of the greater Budapest, the company also plans to develop a 5,300 sqm building at CTPark Arrabona in Győr.

“Last year’s successful acquisitions and our ambitious goals for 2020 speak for themselves,” comments Rudolf Nemes, country manager of CTP in Hungary. “These offer opportunities for us to pave the way for a fast and successful market expansion.

Being an active developer in a leasers’ market with a very low vacancy rate, CTP wants to realize these industrial development projects as soon as possible,” Nemes adds.

of CBRE, Colliers International, Cushman & Wakefield, Eston International, JLL and Robertson Hungary.

CTP has delivered more than 70,000 sqm of industrial space in Hungary this year bringing its portfolio to close to 500,000 sqm of space with an estimated asset value of EUR 300 million according to the company.

The company is committed to gaining BREEAM accreditation for its entire CEE industrial portfolio. “This is an on-going

process and represents a balance between investment costs and the benefits of operational efficiency,” said CTP. CTP has more than 5.5 million sqm of industrial space in around 100 locations across the Czech Republic, Hungary, Poland, Romania and Slovakia. The company is also the first regional commercial industrial/ logistics park operator to extend its network to Serbia with projects in the Belgrade and Novi Sad areas.

Record Low

Overall vacancy stands at a record low 2%, representing 43,000 sqm of vacant space, and there is no existing warehouse with an area of more than 5,000 sqm according to the Budapest Research Forum, consisting

CTPark Budapest West.

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Budapest Business Journal | November 29 – December 12, 2019

Photos by Hajnalka Hurta/AmCham

6|1

Joerg Bauer

William “Mo” Cowan

Farkas Bársony

Írisz Lippai-Nagy

30 Years of AmCham Bridge Building It was a night for recalling personal memories and institutional milestones as the American Chamber of Commerce in Hungary celebrated its 30th anniversary at a gala event in the House of the Nation, the Hungarian Parliament.

ROBIN MARSHALL

Some 430 guests attended the event on November 14, including business people, politicians, diplomats and past and present presidents and board members from the chamber. Paton sponsors were GE, also celebrating 30 years in Hungary, and the newly reborn Tungsram Group, a Hungarian multinational that has brought back a pioneering, innovative Hungarian brand.

Current AmCham President Farkas Bársony set the tone in his opening address. He made the point that time rarely stands still. “Thirty years ago we used a yellow phone book and watched VHS tapes. 30 years ago, when the killer app was Lotus 1 2 3, the Nintendo Game Boy and AmCham were born. Of these historymaking moments, only AmCham is still around. Everything else has been replaced by something better.”

As he sees it, AmCham has always served as a bridge, he explained, “Strong, firm, withstanding the test of time, weathering storms and connecting important sides that would be separated or difficult to reach otherwise.” The chamber has been a bridge between the country’s past and its future, the business community and the government, and between people, Bársony

The current AmCham Board on the stairs in Parliament. Photo by Lázár Todoroff/AmCham. said. “I am proud that I got the chance to walk on this bridge with you.”

Representing the government, Minister of Foreign Affairs and Trade Péter Szijjártó described

1989 as

“one of the most significant dates of our history”, when the country “became free and sovereign again.” Over the past 30 years the country had walked a long path, and come a long way, he said, but it had not done so alone. “The Americans, especially American businesses proved to be good workers, allies and friends.”

AmCham members have provided key input, he said. “We have always relied on your advices.[…] We never had the goal to reinvent the wheel or hot water; it was always much easier to ask you and then listen […]. Many of our major economic decisions have been based on the proposals and advice made by AmCham or the member companies of the chamber.

And this is something that we would like to continue, to rely on your advices, to rely on your insights.”

The path has been long, but it continues onward. “I would like to express the government’s appreciation to all of you, to AmCham and the American businesses

here and the leaders and your employees and colleagues for the achievements, for the performance you have made during the past 30 years. Without you Hungary definitely could not have been a success story; our cooperation has been a success story as well, and we are ready to continue.”

Extraordinary

William “Mo” Cowan, GE’s president for global government affairs and policy, was full of praise for Hungary’s rebirth and the strength of AmCham and his company’s

Péter Szijjártó

partnership with the government.

“A famous Hungarian inventor, physicist and Nobel Prize winner, Dennis Gabor once said: ‘Futures cannot be predicted but futures can be invented.’ I look forward to the next 30 years of GE in Hungary and am eager to see the new ways in which our joint future is invented. Judging from our history, it is sure to be nothing short of extraordinary,” he concluded Joerg Bauer of Tungsram described 1989 as “life changing for the world, and also personally, for me.” He talked movingly of how his father, as a child at the end of the war had relied on U.S. aid food parcels.

That generosity of spirit had stayed with Bauer junior, who first worked at Tungsram, then part of GE, in 1999. Now that it is independent again, he says he is determined to build on the innovative spirit on which the lightbulb company was founded by moving into other areas such as sustainable agriculture, with the aim to “make a difference from here in Hungary as we used to.”

AmCham CEO Írisz Lippai-Nagy also drew on her past:

30

years ago,

she was just leaving university and moving into a tiny flat. Dreams of work and travel and a bigger home were there, but seemed far off; 1989 changed all that.

“Thirty years ago I only had limited dreams. Now I know that our dreams can be as unlimited as our beliefs, efforts and dedication to make them come true. I can promise we will continue working hard to keep earning your trust and support, and I know we in AmCham have many successful years to come.”

Roundtable discussion on 30 years of investment in Hungary. Photo by Lázár Todoroff/AmCham.

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Budapest Business Journal | November 29 – December 12, 2019

Business

changes in all industries, Kaderják said, citing Prime Minister Viktor Orbán.

“According to our initial estimates, in the next 30 years roughly

2.5% of GDP

Efficient Climate and Energy Policy Reform Needed

Clean, smart and affordable energy services for Hungarian consumers: these are the pillars of the new National Energy Strategy in the making, the main principles of which were presented at an energy investment conference this month. To achieve the goals and a climate-neutral sector, radical changes and huge investments will be needed.

ZSÓFIA VÉGH

It has been a year since an integrated state secretariat for energy and climate was set up within the Ministry for Innovation and Technology with the mandate to focus on the challenges posed by both fields, not least pursuing efficient energy and climate policy, state secretary Péter Kaderják told Portfolio’s Energy Investment Conference.

should be invested to reach this goal. In the Netherlands, this figure is 0.5%, but their GDP is higher,” he added. The scale of these investments are likely to be around HUF 40 trillion-50 trillion, he said.

The ratio of renewables should be increased to 24% by 2030, while greenhouse gas emissions should be decreased by at least 40% compared to 1990 by the same date, Kaderják highlighted.

As for energy efficiency, maintaining final energy consumption at the level it was in 2005 would be desirable, he added.

Should it exceed this level, the excess could only be covered by generation from renewable sources.

Farewell, Fossil Fuels

Divesting from fossil fuels has already begun but should continue at an accelerated pace, said Diana ÜrgeVorsatz, director of the Center for Climate Change and Sustainable Energy Policy. The existing assets should not simply be abandoned, but no new investment should be made.

Coal-based technologies will be priced out of the market

by

2030,

“We have been working on setting strategic goals and drafting legislation that, in the long run, would create a calculable [climate] policy environment for investors,” he explained.

Part of this work has been to devise a new National Energy Strategy; because that has not yet been finalized, it was not presented, but Kaderják did present some of the underlying principles behind it.

First, the Hungarian energy strategy needs to be dealt with in the context of climate policy and economic development.

Since energy contributes an

estimated

70%

to climate problems, and Hungary relies heavily on energy imports (coincidently, also 70%), climate and energy issues

need to be handled in an integrated manner, Kaderják said.

Economic development and climate protection are not conflicting, but rather mutually reinforcing goals, and whoever finds a solution to these problems can become a winner.

Due to the relative position of the Carpathian-basin, Hungary could well develop solutions for the rest of the world, he said.

There is a need to strike a balance between climate protection, energy and security of supply, he continued.

Because the country’s GDP is below average, it is critical that it uses its resources efficiently.

Multiple Benefits

When the government is allocating funds for climate protection, it will favor solutions that bring about multiple benefits: for instance, help reduce dependence on imports, cut energy costs and boost economic development.

“We agree with the International Energy Agency that, in order to achieve climate neutrality, we need all known (and even more) technologies,” said Kaderják, referring to the state’s technologyneutral stance. Energy efficiency, the use of renewable energy sources and maintaining nuclear capacities are fields the ministry believe need extra attention and funds, he added.

The transition to a climate-neutral environment will be painful for many, he warned. There will be players, including coal miners and car manufacturers, that will come under pressure. Therefore a just transition is necessary; no one should be left behind, he added.

It is possible for Hungary to become climate neutral, but only with radical

gas-fueled electricity generation will also decrease substantially, said Csaba Kovács, a partner at KPMG. “The future will be characterized by offshore and onshore wind and solar energy,” he said. Onshore wind technology is already competitive on a market basis and solar energy is on route to becoming so, Kovács added, as a result of the generous subsidies paid by European consumers.

“We agree with the International Energy Agency that, in order to achieve climate neutrality, we need all known (and even more) technologies.”

“If it weren’t for these schemes and demand, research resulting in the [drop of] of investment costs and lifecycle could not have been carried out either in Europe or in other parts of the world,” he said.

The Hungarian subsidy system has moved in the direction of the market; the reform of the feed-in tariff and the introduction of the METÁR system were good steps as they helped cut back on overly generous subsidies, Kovács said.

In terms of funding, regulation and the role of the financial sector – for example, how to positively discriminate climate-friendly, sustainable investments – remains an important issue, he concluded.

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Business

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Budapest Business Journal | November 29 – December 12, 2019

Fintechlab Design Summit: Digital Banking Success Stories Founded in 2016, the MKB Fintechlab Innovation Lab and international startup incubator celebrated its third anniversary in October. The FinTech incubator has achieved significant success in the field of design thinking and customercentric development, and has supported internationally recognized innovations and digital developments with MKB Finance Group.

GERGELY HERPAI

MKB Fintechlab organized Design Summit 2019 on November 21 at the Hubdub club on Király utca, which presented success stories of disruptive financial market players such as Revolut, N26, TransferWise, Czech MONETA Money Bank, and Cherrisk, the digital insurance innovator.

In what is a unique event in the region, some of the more important figures of the Hungarian and international banking spheres gave lectures on the crucial role of design thinking in financial services.

One of the workshops covered the “Lego Serious Play Gamification Methodology”, where team members used Lego bricks as models to brainstorm and seek solutions to customer problems. The whole event was held in English.

“One of the most interesting questions today is what are the innovative policies and tools that can lay the foundations for enterprise transformation,” said Norbert Gaál, MKB Fintechlab head of design.

“We believe that customer-centered design and design thinking are such a pillar. The aim of the Design Summit is to create a common platform for those interested in the topic, where topics such as design-driven organizations and bank-specific design tools are on the table,” he explained.

János Pereczes, managing director of MKB Fintechlab, told the Budapest Business Journal, “The Fintechlab Design Summit aims to evangelize the power of customer experience and design thinking in the financial sector. We bring the most successful fintech startup executives and digital product design professional cream to Hungary to share

their experiences. Design Summit builds heavily on Fintechlab’s know-how built over the past three years.”

Paradigm Shift

Perhaps, among the many presentations, one the more interesting speeches was about banking security, as this is a topic which is crucial to everyone. In many ways, digitalization is a paradigm shift in the financial market in more than one respect: The most effective marketing tools are now digital as younger generations are early adopters of new technologies, FinTech is reducing bank margins and some services now need to be completely redesigned.

mission is to build a “fair and frictionless platform to use and manage money around the world.” It has developed a system allowing users to transfer, exchange, and spend money with a multi-currency card that is accepted everywhere.

Revolut currently supports payment and ATM withdrawals in

business started because it saw banks’ customer interfaces as weak, and wanted to build a bank that customers wanted to use.

120

currencies

and sending in 26 currencies directly from its mobile app. The company is based in London and was founded in July 2015.

The expert pointed out that there are 3.4 billion smartphones in the world and 30% of the labor market is already provided by the Millennial generation, who are early adopters of technological solutions. If you are designing a new product, it is no longer worth focusing on the 60-plus generation, he said.

Expensive Banks

Henrik Hagedorn These were some of the ideas mentioned

by Karol Sadaj, Revolut country manager, who believes that FinTechs are different from traditional banks in that they do not have to make profits every quarter, giving them more room for innovation, for example.

Revolut is a digital banking alternative that includes a pre-paid debit card, currency exchange, and peer-to-peer payments. According to the company, its

Sadaj did not spare the banks, either: he believes that incumbent financial institutions can be expensive and unwealdy. FinTechs, on the other hand, have reduced foreign exchange swaps, for example, they allow users to exchange foreign currencies and to spend free, all important factors in a globalizing world.

Today, the biggest risk when dealing with money is not being physically robbed, but being scamed when shopping online, said Revolut’s manager. For example, virtual cards offer a good solution, but the main problem is that usually they aren’t available at traditional banks.

You can also see how much you spend through most FinTech apps, so if you are a victim of a scam, you can react immediately.

The service can also be convenient: Revolut’s insurance service, for example, automatically asks you when you are traveling abroad whether you want travel insurance.

Another speaker, Henrik Hagedorn, N26’s strategic designer, said that the

Karol Sadaj N26 uses digital devices to measure product user feedback, what it calls the Experience Metrics Framework. This measures, among other things, how many customers are achieving their savings goals. Such UX metrics can also be used to measure customer satisfaction and company health.

In total, Fintechlab Design Summit 2019 featured

26

professional speakers

with hands-on experience and there were about seven hours of workshops at the Hubdub club.

The summit will become an annual event to support international FinTech networking and practical collaboration, while also being closely linked to MKB Fintechlab’s 2020 training, which focuses on design thinking and customer-centred design.

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Business

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Budapest Business Journal | November 29 – December 12, 2019

T-Systems Symposium: For Technology, Trust is Key It is hard to tell what technology has not transformed the way in which societies and citizens interact with each other. While most feels that technology has radically changed their way of living, even compared to not more than 10-15 years ago, we are still in the middle of profound transformations that we can benefit from immensely. The T-Systems Symposium held in Budapest on November 26 showed several areas of such transformation.

BALÁZS BARABÁS

A plenary session and no less than six sections revolved around the central theme of digitalization in the modern age, the effects of technology on successful development.

“We have available the necessary technology at the level that we need it. New roles, new models and new structures are born, and robots are part of our everyday life. This is not the future, it is already the present,” Zoltán Kaszás, CEO of T-Systems Hungary said in his opening remarks.

As one single example, access to water worldwide has been greatly improved by a better use of technology. But while we may feel we are at the peak of technology, we need to pay attention to something at least as important: trust. Efficiency must not annihilate trust towards technology and those that create and implement it, Kaszás said. The three words that will define the following years, will be: trust, efficiency and data, he concluded.

Development Imperative

The Hungarian government will put a much stronger emphasis on technology, as this is imperative for the development of the country, Minister for Innovation and Technology László Palkovics told attendees.

By 2025, at least 75% of all Hungarian public institutions and households will have internet access of 1 Gbps bandwidth (the average bandwidth now available for private use is about 0.3-0.4 Gbps currently).

The government aims at making Hungary a regional center for the next-

Zoltán Kaszás generation, 5G mobile internet access technology tests and software developers, he added. The statistics support this goal: In the last five years, the gross added value (GVA) produced by the ICT sector in Hungary has grown by more than 20%, to HUF 6 trillion.

The digital economy, including in-house software development by non-IT companies (car factories, financial services etc.) is contributing

at least

25%

to the national GDP, Palkovics claimed.

Hungary is performing very well in terms of the development of the digital infrastructure, even better than Germany.

Based on the mobile network download speed, Hungary is ranked 11th among European states and eighth by signal coverage, the minister added.

As for the strategic goals, Hungary has adopted a National Digitalization Strategy with six main focus areas: The internet of things (IOT); Big Data; Industry 4.0; artificial intelligence; 5G; and blockchain.

Measures for achieving these goals include:

is, to reduce the carbon-dioxide emission to 0% in electricity production.

Among several measures, this involves also completely eliminating coal from production. Another important goal is to make the citizens more involved in preserving the environment and make the country cleaner, Palkovics said.

But what about the end-user? Tibor Rékasi, CEO of Magyar Telekom thinks that while the end-user enjoys many benefits of technology advancements, he or she is much less interested in knowing what is the underlying technology behind it.

We are experiencing a revolution of content consumerism. The user wants access to data immediately; even a few seconds of waiting are unbearable in the

21st century.

A new phenomenon is arising: Until recently, users were focused mostly

on download speed, therefore providers offered asymmetrical internet access: low bandwidth upload in exchange for 8-10 times higher download speed.

Nowadays this is changing: Users are uploading more and more data in the cloud and on social media, which makes the upload speed almost as crucial as the download speed, Rékasi noted.

The quality of the access, the delays and the upload speed are, today, basically, a question of business life and death for providers.

Meanwhile, these come at a cost: energy consumption and data management. Users are increasingly sensitive to environmental challenges and data breaches, which poses a difficult task for providers: Give me speed and security, but don’t use too much energy. That is a real challenge, Rékasi said.

• State funding for faster construction and cost optimization of the 5G network; • Support for research in AI technologies, so that Hungary can become a reference point for the international AI community; • Strengthening small companies by making available to them the achievements of AI technologies.

Environmental Challenges

While the government is aware of the necessity of technological advantages, it is not losing sight of the environmental challenges, Palkovics noted. The aim of Hungarian economic policy is to make the country 90% climate neutral by 2030, that

László Palkovics

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Budapest Business Journal | November 29 – December 12, 2019

S TA R T U P S P O T L I G H T

IT Startup Aims for top With Customized Services

Photo by Lázár Todoroff

Tappointment has evolved from offering a smartphonebased appointment reservation system to delivering customized, creative IT services to clients, and is looking to break into international elite of the industry.

The Budapest Business Journal asks CEO Zoltán Lukács about the startupʼs journey and transformation.

BENCE GAÁL

BBJ: How did your journey begin?

Zoltán Lukács: One of my dear friends had a brilliant idea, a mobile phone-based appointment reservation system, in which I saw an idea to create something new. In 2013, we begun development with our own team.

We managed to involve a very experienced CTO, Gábor Barta, with whom I have had a great relationship since high school.

Thanks to a Hungarian angel investor, we received investment, and we were also successful in involving venture capital from PBG FMC Venture Capital Fund Management Ltd. in 2014, followed by another round in 2015. Meanwhile, we began doing roadshows in America, having realized that Hungarian service providers were not yet ready for digital transformation.

BBJ: The company now operates with a different profile. What’s the underlying reason, what prompted the adjustments?

ZL: Ours is a typical startup story, in the sense that we failed to get another round of investment at the end of 2015, bringing us to a crossroads. We had to decide between closing this chapter in our lives for good, or keeping the team together while transforming our operations, and supplying our partners with services: custom developments and software solutions. We chose the second option, and I believe it was the right decision. We reacted quickly to the changed circumstances, managing to get orders relatively soon, which became larger as time went by.

BBJ: How does your service-based development model work?

ZL: The specialty of our business model is that we do more for our clients than only develop and build a system based on their end-to-end specifications. Our clients trust

in us, which is why we are usually involved in the process from the kick-off brainstorming discussions to market introduction of the product. This means that our business and technical experiences and ideas are also incorporated in the product. We think together with our partners, understand their vision and problems, and strive to come up with the best possible solution. Our opinion counts, and our clients give us creative freedom to bring their ideas into life. The best thing is that we can create, and come up with new and exciting solutions.

BBJ: How did the transformation affect the startup’s operations?

ZL: We wanted to preserve the basic features of the startup model in a more refined form.

The Silicon Valley startup culture made a great impression on me during my first visit to Google in Mountain View in 2010, which was a defining moment in my life. I envisioned that something similar could also be possible in Hungary. We are working on enhancing the image of the company, and the internal organizational culture, showing our employees why it is worth being a member of Tappointment, and why it is good to work here. We are not doing it because we have to, but because we care about it. We want them to love and enjoy what they are doing, instead of considering the company “just a workplace”.

BBJ: What are the startup’s plans for the future?

ZL: Fundamentally, I am a perfectionist. We want Tappointment to reach the international league of elite developers in three years.

We want to build an organization where everybody does what they know how to do, what they do best, and that allows them to fulfill themselves. Currently, we have 21 employees, but we also have multiple open positions for developers. We imagine working with a team of 40 within five years.

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Business

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Budapest Business Journal | November 29 – December 12, 2019

Should you use a Holding Company?

Regular corporate finance columnist Les Nemethy looks into when it might make sense to set up a holding company.

Many small to mid-sized businesses have no need for a holding company. It may be sufficient for the company owner(s) to personally own shares or quotas directly in the company in question. This article will look at a number of instances where a holding company might, nevertheless, be advisable. I will look at three types of reasons for setting up a holding company: corporate governance; financial; and taxation.

Corporate Governance

I advised the owner of a group of companies who has numerous corporate entities which were held by him personally.

He exerted his control directly over each company, and his personal control was really the only link among the various corporate entities.

Given that the companies were growing, and in related activities, the owner wished to create a management team that would manage all of the companies. This was achieved by interposing a holding company that provided a coordinated common direction among all of the operating entities.

When a strategic or financial investor puts money into a group of companies, in my experience they more often than not insist on a holding company, as it would not be practical to appoint board members to each entity, and then somehow try to coordinate multiple businesses.

It is much simpler to provide coordinated governance for a group of companies at

the level of a holding company. In any situation where there are shareholders who wish to exert control over a group of companies, a holding company may considerably simplify corporate governance.

Financial

A holding company can also greatly simplify transactions. Let’s say an investor wants to take an interest of X% in five different companies under common ownership. If the owners were to establish a holding company for the five entities, the investor could achieve the same result with one transaction, taking an X% interest in the holding company. Similarly, for debt financing, the bank could enter into one loan agreement with the holding, instead of with each of the five operating entities, thereby providing financing to the entire group.

One of the advantages of creating a holding company is that it becomes

possible to create consolidated financial statements at the level of the holding, generally so long as the holding owns more than 50% of each subsidiary.

These stronger consolidated financial statements open up new horizons in financing, with the ability to attract more debt or equity financing than any individual subsidiary might be able to achieve.

A holding that is larger and more diversified than any subsidiary might also have less risk, resulting in a lower cost of capital, therefore also improving valuation.

Taxation

Significant tax advantages may be achieved by interposing a holding company between a company and an individual. Whereas in most jurisdictions dividends from company to individual shareholder incur taxes, dividends between a subsidiary and parent company typically flow tax-free,

allowing the parent company to reinvest earnings on a tax-free basis.

This is generally true for crossborder dividends within the European Union. (Other cross-border dividends are usually subject to taxes, including withholding taxes, which may be reduced or eliminated by tax treaties). Taxes will nevertheless typically need to be paid on dividends paid from any holding company to individuals.

A holding company can also help save capital gains tax. In many jurisdictions, the sale of subsidiaries by a holding company may be free of capital gains tax. Therefore the jurisdiction in which the holding company is incorporated is of paramount importance; it generally pays to incorporate a holding company in a jurisdiction that has tax treaties with all the countries in which the subsidiaries operate. This helps avoid double taxation.

It is extremely important to obtain advice from tax experts for the purposes of tax planning (which is perfectly legal) and make sure you are not entering the realm of tax evasion (which is illegal).

In short, the reasons for creating a holding company may be quite compelling. It is very important to ensure that, when a business owner sets up a holding entity, and transfers ownership of operating companies from personal ownership to the holding entity, that this does not trigger a taxable event, or if it does, that the tax implications are manageable.

If you are contemplating building a group of businesses that spans many companies, it may be advisable to create the holding structure as soon as possible to avoid the potential tax liability upon such transfers, and to create a multi-year track record of profitability at the holding level, to facilitate raising debt or equity financing.

Les Nemethy is CEO of EuroPhoenix (www.europhoenix. com), a Central European corporate finance firm, author of Business Exit Planning (www.businessexitplanningbook. com) and a former president of the American Chamber of Commerce in Hungary.

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Tradition, Modernity, Sustainability, Herbs and Chocolate: The Perfect Blend The Pannonhalma Archabbey has completely renewed its range of chocolates. The three new herbal products are a trio of lavender milk chocolate, herbal plain chocolate, and sage white chocolate. These handcrafted chocolates contain crumbled herbs: sage, lavender rosemary, thyme, summer savory, herb hyssop, and tarragon.

The marriage of herbs and wines from the winery of the Archabbey has also given birth to three truffles of special taste.

The creamy filling of the chocolate balls was made exciting by the tastes of wines typical of the Pannonhalma wine region.

The Pannonhalma Archabbey is characterized by the duality of respecting and preserving traditions while also being able to constantly renew. These new offerings bring authentic and sustainable products to the range which have also made the treasures of the herbal garden available all around the year, in an exquisite combination with cocoa beans.

In addition to the new handcrafted chocolates and truffles, the entire herbal product range is available via the Archabbey’s online shop and in its bricks-and-mortar shop in Budapest. www.apatsagitermekek.hu

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Budapest Business Journal | November 29 – December 12, 2018

Special Report Christmas Shopping

From traditional, high quality sparkling wine, to modern online shopping, Hungary has Christmas wrapped.

Törley Fighting Hard in the Battle of the Bubblies

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Hungarian Online Retail Expands Rapidly

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Budapest Becoming a top Spot for Winter Travel

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Beware This Christmas as Online Fraud Expands

18

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Special Report

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Budapest Business Journal | November 29 – December 12, 2019

Törley Fighting Hard in the Battle of the Bubblies Retail Trend

Meanwhile, on the retail front line, the recent experience of Spar Hungary exactly mirrors that of Törley, with the total market stalled, but a small, if growing trend towards higher quality products.

“Last year, sparkling wines delivered flat sales compared

In late November, supermarkets and specialist wine shops alike begin to expand the shelf space dedicated to sparkling wines. Little wonder: in December sales of effervescent vino spike to between five to six times normal monthly volumes.

KESTER EDDY

Leading the champers charge in Hungary is Törley Sparkling Wine Cellar, a company that boasts a history of nearly 140 years.

A full half-hour tram trundle south from downtown Budapest, past communistera housing blocks, factories, wasteland and the metallic sprawl of an electricity sub-station, Budafok features on but few tourists’ itineraries.

Yet this unprepossessing suburb has a star attraction: it is the home of the Törley Sparkling Wine Cellar, producer of the country’s leading bubbly brands such as Hungaria, BB and the eponymous Törley. In total, the company produces some

22-24 million

bottles of fizz annually in Hungary, of which two-thirds is consumed domestically, equivalent to a near 70% market share.

Yet after limited, if steady growth of 2-4% since 2014, sales in volume terms dipped slightly last year compared to 2017. True, this weakness was obscured by revenues, which inched upwards almost 1% to HUF 19 billion

as a minority of consumers switched to higher-priced, bottle-fermented products.

This is, nonetheless, a trend which György Kovács, chairman of the Törley board, both recognizes and encourages, having already jettisoned its own bottomshelf brands more than a decade ago.

“This shows us very clearly that the consumers [...] want higher quality,” he told the Budapest Business Journal in an interview.

“Our Hungaria Grande Cuvée Brut is the market leader in sparkling wine in Quebec.

We are very proud of this.

Imagine, a brand with the name Hungaria, a sparkling wine produced here in Budafok, in the Frenchspeaking region of Canada!”

Kovács takes heart from exports, which account for about one-third of sparkling wine sales.

Bubbly Jubbly: The Törley Story in Brief In the 1870s, a young student by the name of József Törley, a Hungarian of German descent, went to France to learn the secrets of Champagne production. He returned in 1882, and having discovered the terroir around Etyek, southwest of Budapest, to be similar to that he had encountered in France, he determined to produce a sparkling wine “better than that of Champagne.”

Judging that stone quarries at Budafok were equally ideal for the fermentation and maturation of such wines, the energetic Törley bought up the land and, together with an expert vintner invited over from France, plunged into production.

His timing was good: Hungary, having secured peace and stability after the Compromise with Austria in 1867, was developing as never before in its history. Coupled with

Törley’s innovative marketing skills, production rose at a rapid rate, and, with sales booming at home and abroad, the founder rapidly became a wealthy man.

Alas, conflict, ugly politics and depression soon took their toll.

World War II brought wayward bombing by the U.S. Air Force, then pillage by Red Army troops, followed by Hungary’s Stalinist era and nationalization.

Törley was privatized in 1992, snapped up for an undisclosed sum in Hungary’s great state sell-off,

by Henkell & Co, itself a revered sparkling wine maker, based in Wiesbaden, Germany.

Since then, bar occasional dips caused by economic downturns, Törley has largely been on an upward trajectory, the German parent investing significant sums, along with know-how in its Budafok offspring.

to

2017.

György Kovács

Champion of Canada

“Our Hungaria Grande Cuvée Brut is the market leader in sparkling wine in Quebec. We are very proud of this.

Imagine, a brand with the name Hungaria, a sparkling wine produced here in Budafok, in the French-speaking region of Canada!”

Törley also has significant sales in Sweden and the Nordic countries, the Baltics and Vietnam, and is making inroads into China, Kazakhstan and Nigeria.

But building export markets is slow and expensive, and with intense competition from rivals, many wellfinanced and capable of sustaining a long-haul struggle, Kovács is understandably anxious to protect and expand his all-important domestic market.

The company has always stressed the need for high-quality vineyard management, replanting between

20-30 hectares

of vines every year. Recently, it has also paid heed to the growing demand for organic wines by beginning the transformation of an initial 10 hectares to organic standards.

“The plantation will take three years to grow. For this, the second year, we are using only plant-based pest repellants, and animal-based ingredients have been completely eliminated from our processes,” Kovács said.

Törley is also targeting niche market demands through limited-edition sparkling wine specialties created to satisfy sparkling wine connoisseurs, each with unique taste and package design.

“The key to success is that we pay close attention to every step of processing sparkling wines and wines, from the cultivation of vineyards, through harvesting and base wine handling to the filling of bottles. From the vine-stock to the consumer’s table, so to speak,” he argues.

We realized a slight decrease in volume, compensated by higher price points,” Márk Maczelka, Spar’s communications leader said.

Indeed, he believes an increasing customer appreciation of the finer characteristics of upper-shelf sparkling wines is probably the key to future growth.

“We expect customers will be more and more conscious [regarding quality]. We also expect that consumption will be more general, and not just at Christmas and New Year’s eve,” Maczelka said.

Looking from the outside, British wine writer David Copp credits Törley with making big strides in the early years after privatization, but appreciates that the increasingly intense competition makes additional gains that much harder to achieve.

“Törley, for me, was an amazing story because they understood the market and how to be successful. It all started with good wine. These things don’t change, and if the vineyards are good and the wine-making team qualified, there is no reason they cannot match anyone,” he told the BBJ. “But everyone is now making sparkling.

It’s a tough market.”

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Budapest Business Journal | November 29 – December 12, 2019

Special Report | 15

Hungarian Online Retail Expands Rapidly transactions initiated in Hungary to more than EUR 3.1 billion (HUF 1 trillion) in 2018.

The Hungarian online retail market is now catching up with international peers. As Black Friday and the Christmas Holidays bring e-commerce to its annual peak, online retailers are readying themselves for the stampede.

CHRISTIAN KESZTHELYI

Hungary’s online retail (e-tail) market has expanded by more than 150% in four years; an expansion that, although expected by pundits, was massively underestimated.

The net turnover of webshops has leapt from EUR 0.8 billion (HUF 273 bln) in 2014 to EUR 2.1 bln (HUF 669 bln) in 2018, according to the most recent figures from eNET Internet Research and Consulting Ltd. In 2018, Hungary’s online retail trade volume grew by 23%, eNet reports, based on the sales figures of more than

5,000 e-tailers.

The share of online sales reached 7% of total retail sales, which corresponds to 13% growth compared to 2017.

“Online purchases are definitely growing in the Hungarian market. We have started to catch up to the international market.

The distrust seems to be disappearing; customers order now not just from Hungarian webshops but also from abroad,” Zsuzsanna Stampel, senior marketing manager of online retailer mall.hu, tells the Budapest Business Journal.

“Thanks to the awareness of legal rights, better security systems and faster loading time of websites, and the easy orientation between the quality of the offers, customers don’t have to be a digital native any more to complete an online order,” Stampel adds.

The most recent figures of eNet reveal that almost 5.4 million Hungarians, a jawdropping 91% of adult internet users, shop online regularly. With this figure peaking,

Christmas Bonanza

the proliferation of online shopping for food and household goods is expected to strongly contribute to raising the purchase intensity, which is the most essential factor in this scenario for the further expansion of the e-tail market.

Safer Shopping?

But what is behind the increasing number of online shoppers? “In physical shops, there is more opportunity to shop impulsively.

Customers spend their time to get to the product and get to the pay desk after.

“Online purchases are definitely growing in the Hungarian market. We have started to catch up to the international market.

The distrust seems to be disappearing; customers order now not just from Hungarian webshops but also from abroad.”

They can see several actions [sale offers] meanwhile. There is also no chance to check competitors’ prices,” Stampel explains.

“This is why shopping online is a more conscious and planned way of getting the product. You can surf multiple online stores and switch between them just in a second,” she adds.

Zsuzsanna Stampel One in four or five customers, approximately 1.2 million people, buy food and household goods online, a tendency that boosts the online turnover of FMCG products, making up one-sixth of Hungary’s total e-tail business volume.

Researcher eNet expects the dynamic growth of the past few years – 18% from 2015 to 2016, 35% from 2016 to 2017,

and

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27%

from 2017 to 2018 – to continue, fueling further expansion and increasing the overall weight of the market.

“Probably this is the reason that a physical-only presence is not profitable anymore. The biggest players have already launched online shops or are planning to do so. The FMCG category is the great proof of that; no one can afford to lag behind in the market,” Stampel says.

As global retailers expand their reach and will now deliver their goods to Hungary, locals are opting to order from abroad in increasing numbers. In fact, half of all online shoppers now order goods from abroad: 3.1 million in 2018, up from 1.7 million in 2016.

Hungarian internet users may have spent EUR 1.2 bln-1.3 bln (HUF 400 bln-420 bln) in foreign webshops and online marketplaces in 2018, according to eNET’s estimates.

This brings the overall value of e-tail

As Christmas increasingly sheds its religious roots and transforms into a capitalist and consumerist holiday, the commercial success of online stores is inevitable. At the end of 2018, Black Friday on its own generated almost HUF 78 bln (about EUR 247 million), while the total Christmas shopping period may have brought in HUF 323 bln (around EUR 1.023 bln) in trade volume according to eNET’s surveys conducted in December 2018 and January 2019.

“Tendencies in the season or on actual Black Friday saw electric categories in focus at the beginning: Video game consoles, TV sets, mobile phones and notebooks are the most popular categories, but major domestic appliances and small domestic appliances are also growing,” Stampel tells the BBJ. “Of course, this trend continues because of the nature of electronic products, it doesn’t have to fit as clothes do. However, the non-electric segment has also started to grow. Shopping online is very comfortable, you don’t have to go anywhere, you can be just where you are and the product comes to you,” she adds.

At the same time, the fact that consumers have

14 days

to send back products that they do not like, a return policy valid for any online store in the European Union, makes e-tail an ever more attractive way of spending money.

“The Christmas period is the main season of the year for commerce. The share of offline-online doesn’t tip over, but the quantity is outstanding. This is the peak of the non-electric segment, plus the toys category is exceptional,” Stampel says.

Online shopping is a great option to avoid the masses in the bricks and mortar stores and also to avoid unnecessary spending prompted by compulsive habits.

Still, Stampel urges some caution.

“You have to calculate with the delivery timing, so it’s recommended to think ahead and catch the greatest offers in time.” At the end of the year, nobody wants to be left without a nicely wrapped gift under the tree.

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Special Report

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Budapest Business Journal | November 29 – December 12, 2019

Budapest Becoming a top Spot for Winter Travel Budapest can look forward to a strong Christmas and winter tourist season, with flight bookings to the Hungarian capital from longhaul travelers up 29.3% for the period from December 15 through January 15, according to research by travel analytics firm ForwardKeys.

BENCE GAÁL

The growth is the second strongest among the surveyed EU cities, with only Helsinki ahead of the Hungarian capital on a 29.6% growth rate. Two other capitals performed particularly well in the CEE region: Bucharest, which registered the third strongest growth (28.4%); and Czech capital Prague, with an increase of 16.5%, the ninth strongest performance in the EU. “When we look at the data, we see that Budapest’s strong booking position is due to notable capacity growth on routes from New York and Tel Aviv,” Jérôme Goldberg, global retail and travel retail director at ForwardKeys told the Budapest Business Journal.

“However, there is more to it than that. Budapest is a stunning, elegant city that has a tremendous experience to offer visitors, including spectacular architecture, awe-inspiring museums and a rich historic cultural heritage.”

While it has been catching up with its Western European counterparts in recent years, it is worth noting that Budapest still lags behind in terms of the total share of long-haul bookings from outside the EU. Top three destinations London, Paris, and Rome possess a total share of 16.2%, 13.6%, and 7.4%, respectively.

Budapest, with its 1.5% share is still well behind Munich, which occupies the last place in the top 10 destinations with a 3% share of the total.

The Advent and Christmas Market at Szent István Basilica. Photo by Lerner Vadim/Shutterstock

Targeting Austria

On the other hand, Vienna, the capital of Hungary’s most immediate Western neighbor Austria, does seems to be within firing distance. The city accounts for about 2.1% of total long-haul bookings, registering a year-on-year growth of 8%.

The Hungarian capital’s performance seems even more impressive, if one considers the fact that it has managed

to actually beat some of its Western peers. Budapest has a larger slice of the pie of total bookings than Copenhagen (1.1%), Helsinki (1.2%), and Athens (1.3%).

Among direct competitors in the former Eastern Bloc, Budapest trails only Prague, which has a booking share of 2.7%. Bucharest accounts for just 0.5% of total bookings, with Warsaw also punching below its weight at 0.7%, despite the fact that the Polish capital’s population is similar to that of Budapest.

Other underperforming regional cities include Zagreb, with a share of only 0.3%, and Ljubljana, clocking in at 0.1%.

What’s more, these two cities actually registered a sharp year-on-year drop in bookings, with rates falling by 12.8% and 17.7%, respectively.

Budapest’s popularity among tourists as a winter destination, particularly around the holiday season, should come as no surprise. Last winter, a public vote for Europe’s best Christmas market, organized by European Best Destinations, saw the “Advent Feast at the Basilica” in Budapest gathering the second highest number of votes.

This year, the Christmas Market on Vörösmarty tér has been open since November 8, while the fair at the Basilica opened its doors on November 22. Both are set to welcome visitors into January.

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Special Report

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Budapest Business Journal | November 29 – December 12, 2019

Beware This Christmas as Online Fraud Expands As our smartphones become a gateway to virtually any errand that we might need to run, online transactions are on the rise.

Parallel to this, online fraud is also growing, so be vigilant as you go about your Christmas e-shopping. Ferenc Biró, partner at EY Hungary’s forensic services discusses the latest online fraud sentiment with the Budapest Business Journal.

CHRISTIAN KESZTHELYI

Smartphone usage is increasing so fast that, currently, smart devices and mobile phones are predominantly used for both online shopping and personal banking.

The size of online shops and ease of access to digital marketplaces create fertile virtual soil for online fraud, which has grown into the most widespread forms of misconduct, and it is expected to expand further.

“Current estimates for 2020 are prognosticating 150% to 300% increase in e-commerce fraud.

The most common types of schemes affecting buyer and merchant likewise include credit card fraud, identity theft, chargebacks, and false returns,” Biró tells the BBJ. More than 80% of consumers trust that businesses are taking appropriate steps to protect their personal information, while the majority of businesses and

business executives see fraud as a growing concern: more than

60% report

the same or higher levels of fraudulent activity compared to last year, according to EY figures.

“A clear majority involves the use of card details that have been fraudulently obtained through methods such as unsolicited emails or telephone calls, or via digital attacks such as malware and data hacks,” Biró says.

“The card details are then used to undertake fraudulent purchases over the internet. We see ‘Buy online and pick up in-store’ on the rise. From the consumers’ perspective online auctions and fake retailer websites pose the greatest threat,” the expert says.

Protect Yourself

With such crimes on the rise, it is becoming more important than ever that consumers are alert and take precautionary steps to protect themselves. Prior to an online purchase, it is highly advised that the buyer researches both the product and the merchant.

Validating a seller by browsing through the online reviews, as well as checking privacy policies, return rights and consumer rights are all steps worth considering.

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Digitally, a seller should be aware of the security level of the website they are browsing. Secured websites that are SSL certified (either there is a tiny padlock before the web address or it starts with https:// prefix) encrypt communication between the buyer and the seller, making it extremely difficult for hackers to hijack and decipher confidential payment data.

“Current estimates for 2020 are prognosticating 150% to 300% increase in e-commerce fraud. The most common types of schemes affecting buyer and merchant likewise include credit card fraud, identity theft, chargebacks, and false returns.”

Additionally, it is handy to have disposable, prepaid or virtual debit/credit cards, which are easy to obtain through smartphone-based financial technology service providers, such as Revolut or TransferWise.

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Budapest Business Journal | November 29 – December 12, 2019

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Special Report | 19

Today, businesses, non-governmental organizations and industry associations are all running on and offline educational campaigns to increase awareness, yet there is still a long way to go.

“As a bottom line: nothing replaces a basic understanding of how online transactions work and common sense. If a deal sounds too good to be true, usually it is. Be skeptical,” Biró warns.

Rapid Expansion

Despite the risks associated with online purchases, the rapid expansion of the field looks certain to continue. E-commerce’s share in the total economy is expected to rise both in terms of value and in volume of transactions.

“The real currency within e-commerce will be trust. Businesses and executives have to strive for a balance between online experience, ease of access and purchase and security protocols. Protocols that not only make customers feel safe but also protect their personal information while effectively safeguarding the business,” Biró concludes.

EY conducts its Global Fraud Survey in every second year. When Hungarian business leaders were quizzed in early 2018,

only

10%

said they would ask for the deletion of their personal data stored by businesses, while almost half of the companies said at the time that they were not ready to delete such data — an obligation set out ADVERTISEMENT

by the European Union’s General Data Protection Regulation (GDPR).

In relation to their own personal data, Hungarians were shown to be less conscious about businesses handling their personal data, when compared to other countries regionally or globally.

“Our experiences show that domestically many people do not know exactly how the regulation affects them […] As every company deals with information of varying types and amounts, it is crucial that they take the steps that are relevant to their businesses only, avoiding extra

and unnecessary costs,” Biró said at the time of last year’s suvrey.

With 2020 just around the corner and with the promise of increasing transactions, both in number and weight, hopefully EY’s Global Fraud Survey due next year will reveal more awareness on the side of consumers.

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Budapest Business Journal | November 29 – December 12, 2019

Socialite Colin Farrellʼs Budapest Kebab of Choice There are a staggering number of kebab shops in Budapest.

Staggering being the operative word because, for many of us, a kebab is simply something we aim at our faces after a long, mostly liquid night out.

If you’ve ever eaten a kebab you’ll know that it can sometimes be a risky business. Quality can vary wildly and some kebabs should come with a health warning.

DAVID HOLZER

Which is why we should be thankful for Irish movie star Colin Farrell.

Shooting the mini-series “The North Water” in Hungary, Farrell discovered Hari Kebab in District VII and, according to the restaurant’s owners,

Harsányi explained. “Zsolti and Judit spent several years in an authentic Turkish place learning all the tricks it takes to make great kebabs. We combined their experience with my entrepreneurial ambitions to launch Hari.

There’s actually a little wordplay going on with our name. In Hungarian, ‘hari’ means a small bite.”

Although the Harsányis and Judit took care to learn the traditional ways of making delicious kebabs, they’re proud to have a created a kebab in their own style made with heart and soul.

They also use locally baked fresh bread, offer huge portions at reasonable prices as well as unique flavors and combinations. Other little touches include inviting customers to pay into an honesty box for tea and coffee. Making sure that customers enjoy the experience of eating at Hari is just as important as the quality of the food.

This extends to dogs. Hari was voted Budapest’s most dog-friendly restaurant in 2017, 2018 and 2019.

That ‘Hari Feeling’

has already popped in for a kebab on more than one occasion.

Farrell’s endorsement is not to be taken lightly. Especially if, like me, you’re partial to the occasional kebab (known in Hungarian as gyros, a loanword from Greek) but have no idea which restaurant to grace with your custom.

For the past 25 years, Farrell has frequented the Abrakebabra in his hometown of Dublin, Ireland.

Apparently, the first thing he does on his way back from the airport is stop for his usual kebab, large fries and Coke. Given that Farrell’s father ran a health food shop and he’s a keen practitioner of yoga, he clearly believes the occasional kebab is perfectly compatible with a healthy lifestyle.

What intrigued me most about the story of Colin Farrell and Hari Kebab was how he found it in the first place. It’s not exactly in a prime location in Budapest’s glittering downtown. I got in touch with Attila Harsányi, manager of Hari Kebab and one of the owners.

“We don’t know how he found us,” Harsányi told me. “But we recognized him on the second or third visit. He was very nice, open and friendly. We took a photo with him but didn’t want to be too pushy.”

Given that, according to Kitti Tordai of Daily News Hungary, Farrell was hiding behind a long beard, spotting him must have been quite an achievement. He also played a Hungarian in the movie “Dead Man Down” and may have used his finely-honed acting skills to appear as much like an ordinary Budapest kebab muncher as possible.

But perhaps eagle-eyed Hari Kebab staff were alerted by the ferocity with which Farrell tore into his kebab.

“We don’t know how he found us. But we recognized him on the second or third visit.

He was very nice, open and friendly. We took a photo with him but didn’t want to be too pushy.”

Return Custom

Farrell returned to Hari Kebab eight or 10 times altogether, which gives you some idea of how fine the kebabs are. One time, Harsányi told me, he brought the entire film crew of between 20 and 30 people with him. Unable to resist temptation, Harsányi asked Farrell why he kept coming back.

“Hey Brother,” Farrell said. “I eat kebabs all over the world because I love them. But I haven’t eaten any as delicious as these before.”

Harsányi was moved. “It’s hard to believe what he told me. I felt so great. I’m pretty sure we’ll see him some more.”

When Hari Kebab opened in March 2017, it was a dream come true for Harsányi, his brother Zsolti and Zsolti’s partner Judit. The brothers Harsányi had become tired of having to travel abroad for a decent kebab. From the beginning, they wanted Hari to be more than just another one of the countless kebab joints all over Budapest.

“We wanted to prove that it’s possible to make kebabs that are as good as food you’d find in any good restaurant,”

And has the endorsement of Colin Farrell paid dividends for Hari Kebab?

“We’ve seen more and more articles about him and us, which is obviously good for business. Although we can’t say that every new face we see is the result of him, traffic has increased notably. But we’re not letting this go to our head. We just keeping doing what we’ve always done, striving to give our guests that particular ‘Hari Feeling’, which is what our beloved customers call it. We want to keep evolving to infinity and beyond!”

Hari Kebab is at 6 István utca, a few minutes’ walk away from Keleti station.

Find out more at www.harikebab.hu.

Other Notable Budapest Kebab Restaurants As I said, it’s hard for a novice without Colin Farrell’s connections or nose for excellence to find a great kebab restaurant in Budapest. I asked around and two names kept coming up: Byblos and Szeraj.

Byblos is actually a pretty upmarket Lebanese and Levantine restaurant on Semmelweis utca. Szeraj, at Szent Istvan Krt, is a Turkish and Middle Eastern restaurant and is somewhat of a Budapest institution that’s been around for 20 years and is popular with locals, especially late at night.

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Budapest Business Journal | November 29 – December 12, 2019

Socialite | 21

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Hungaria 2020 2020. A truly special year. It being special is granted, since this kind of doubled date only occurs once in every 101 years. 2020 provides us with an excellent opportunity to value what we have – each other. And, although we are different, we still like to get together and share every special moment.

We would like to contribute to these special moments with an exciting couple of Hungaria sparkling wines, which represent the familiar first-rate quality of the brand. We believe that every man and woman deserves the most suitable companion.

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This is our gift to You and Him/Her for every such moment in 2020 that deserves a bit of a special celebration.

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Is telecommuting the new standard?

Working outside an office is becoming the standard for small business owners. New technologies let you take your office home in your pocket, which is especially comfortable during holiday season. Indeed, the new multifaced Samsung Galaxy Note10 can make you want to run everything from home all the time. This device can serve as a personal computer with its upgraded DeX feature that lets you connect your phone to a PC or Mac with a single USB cable. Thus it can be a hub for all holiday preparations, listening to festive songs, as well as the occasional work coming in. The 6.3” or 6.8” screens are perfect for presentations at work, and can also serve for watching favorite Holiday movies. And with the professional camera, you can take the family portrait. www.samsung.com/hu

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It Absolutely Must be Aszú for Advent!

It’s that most wonderful time of the year, to borrow from a famous festive song, when attention eventually turns to Tokaji Aszú, which is Hungary’s greatest gift to the world of wine.

ROBERT SMYTH

It is considered by to be the best sweet wine in the world; some go as far as to say it is one of the finest wines of all.

On tasting a good Aszú, I usually lament the fact that I don’t indulge in this sublime stuff more often. It’s certainly a shame that most of us only think of cracking open a bottle of Tokaji Aszú on special occasions, such as over the Christmas season.

Worse still, many run for dry wine cover at the very mention of a tipple of Tokaji Aszú, so much has the world turned against the so-called “stickies”, no matter how sumptuous they may be.

The Tokaj wine region, also referred to as Tokaj-Hegyalja (Tokaj-foothills), is sitting on such a rich reserve of awesome Aszú that it is a shame not to partake when in Hungary. For serious wine lovers, it’s really a question of what’s not to like? This is for a number of wine-related reasons.

Tokaji Aszú has serious history and is made from a centuries-old process (yet is boosted and made fresher by modern technology) that is unique compared to the other botrytized wines of the world.

The botrytized berries are picked one-by-one in several sweeps of the vineyard, and are steeped in a base wine made of regular “healthy” late-harvest

grapes that have not been hit by botrytis (or so-called ‘noble rot’). To add the historical aspect, a lot of Aszú comes from the first vineyards to be officially classified in the world.

(Szamorodni, from Tokaj, is unusual in Hungary in that it is made in the same way as other great sweet wines like Sauternes, from Bordeaux, with the bunches comprising both regular and botrytized grapes picked together, and then pressed.)

Ticking the Boxes

Terroir-wise, Tokaji Aszú ticks all the boxes required to make fine wine. It’s made for the most part from indigenous grapes with the base usually from the focused and linear Furmint, which is typically beefed up and fleshed out by the fruity and honeyed richness of Hárslevelű, along with several others (although the opulently floral Sárgamuskotály aka Yellow Muscat or Muscat Blanc is an outsider).

The region’s soils are remarkably diverse due to the huge amount of volcanic activity here millions of years ago, with the composition of the soil sometimes varying considerably even in one vineyard. The edgier style of wine from the volcanic-based vineyards makes a nice contrast to the softer, fruitier style coming from more loess-based soils around the town of Tokaj itself.

Tokaj has the conditions that allow the botrytis to develop, by virtue of the high amount of moisture in the air in fall, thanks to the region being influenced by the confluence of the Bodrog and Tisza rivers, as well as a high water table.

The botrytis shrivels the grape to a near raisin-like state and intensifies the sugar, acidity and flavors. However, climate change appears to be disrupting the botrytizing process in some years, although 2019 is a bumper vintage in terms of quantity and quality.

Tokaji Aszú is not the kind of stuff that you can quaff glass after glass, but is to be sipped and savored.

A bottle can be enjoyed for several weeks – it has already been exposed to oxygen in its making, through the long barrel ageing, and the high sugar protects it once opened.

As such, Tokaji Aszú is an awesome advent wine, although you might need a couple of bottles to make it through the whole of the four festive weeks, but one might stretch to at least the 12 days of Christmas. It’s such a layered wine that it rewards revisiting with new details revealed on each subsequent sip.

At the table, I don’t care for Aszú paired with sweet desserts, as sweet plus sweet equals sickly and cloying, in my book, but I find it pairs delightfully with stinky, runny cheese, with Tokaji Aszú’s typically tingling acidity slicing fabulously through the fat.

Layered and Complex

Rather than being a so-called dessert wine, I also find it to be ideal actually in place of pudding. In any case, sweet is perhaps not the best way to describe these botrytized beauties, the best of which are as layered as they are rich, with incredible length and complexity driven by the Furmint grape’s angular acidity that cuts through the residual sugar (in excess of 150 grams per liter for a six puttonyos). This gives endless length and prevents the wine from being cloying.

I was fortunate enough to recently taste three six puttonyos offerings from the same producer (Barta from the Tokaj town of Mád) and the same vineyard (the remarkable looking Öreg Király dűlő, comprising volcanic rhyolite tufa with some zeolite and red clay) but from different vintages, and it is a joy to the senses how these magical wines slowly mature and change character with every passing year.

The 2016 Barta Öreg Király dűlő six puttonyos is lemon colored, fresh and citrusy, even grassy, with some of that intense apricot jam/dried apricot scent, which for me is the classic botrytis note, then lemon drops and freshly squeezed lime, with a very long and lingering palate, with the kind of zesty acidity that will keep it for years. It is not yet in the shops.

The 2013 six puttonyos is yellow-golden colored and has tropical and caramel notes to and is creamier and rounder on the palate, soft and very long. It costs HUF 35,000 from the winery.

The no longer available 2008 is starting to pick up a deeper color (orangey or amber in this case), as older Aszú does, and tertiary notes of ageing, such as tobacco, dried fruit, sultana and dates, and this one has the kind of stony minerality that writers so often allude to, but for me so rarely really comes through. Indeed, everything can really come through in a good Tokaji Aszú.

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Budapest Business Journal | November 29 – December 12, 2019

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XpatLoop Gala Raises HUF 4.6 mln for Children’s Charities A packed house of guests from Hungary’s international community united to “Feel Good and Do Good” at XpatLoop’s 19th anniversary celebration, raising HUF 4.6 million for Hungarian children in need.

BBJ STAFF

Held on November 2, the annual Xpat Charity Gala took, as usual, the traditional British theme of the Guy Fawkes’ Bonfire Night with Special Effects International arranging a virtual bonfire and big screen fireworks display (along with all the event’s other various audio and visual elements).

Welcome drinks were served from the start, along with a range of appetizers.

Main alcoholic drink sponsor Zwack Unicum ensured guests could get into

Some of the key sponsors and supporters: (From left) Gergely Papp, Budapest Marriott Hotel; Dennis A. Diokno, FirstMed Budapest; Stephen Linfitt, Publisher of XpatLoop.com; TV presenter Zsuzsa Demcsák; Éva Patzauer, Magic Lamp Foundation; British Ambassador Iain Lindsay; and master of ceremonies Hans Peterson. the spirit from arrival. The Coca-Cola tradition of celebrating the arrest of Guy Company also provided a wide range Fawkes on November 5, 1605, which foiled of soft drink refreshments all evening, the Gunpowder Plot to blow up Parliament. and Nespresso served top quality coffee Charity Choir options throughout the event. Craft beers Lindsay then fronted a Charity Choir in a and cider were available, alongside wines special rendition of the Hungarian blues from some of Hungary’s top vintners, song “Jég Dupla Whiskyvel” (“Double traditional Hungarian pálinka and singleWhisky With Ice”). The choir was a malt Scotch whiskies.

Once the welcome zone was full, the doors “supergroup” of event supporters and VIPs, including Sándor Zwack, whose were opened to the Grand Ballroom of the recently refurbished Budapest Marriott Hotel, eponymous firm ensured there was more than enough Scotch Whisky to live up to the host of the event for the fourth year. the song. Lindsay, who sung in Hungarian, The gala was officially opened by was delighted with the charity gala. guest of honor Iain Lindsay, the British “Well done to XpatLoop for organizing Ambassador to Hungary. With a virtual a fantastic Bonfire Night party, it was the bonfire burning bright behind him, the best one in my time here,” he said. Lindsay British Ambassador referenced the U.K.

described it as, “a lovely event which raised an impressive total for Hungarian children’s charities. A huge thanks to all those who contributed so generously. And to all those who joined me in singing ‘Jég Dupla Whiskyvel’!”

That was followed by an international buffet featuring a wide range of culinary offerings provided by many of Budapest’s finest restaurants and caterers. Out on the ballroom terrace, guests enjoyed BBQ dishes and gourmet delights.

After dinner, Master of Ceremonies Hans Peterson (who had earlier made a theatrical performance in a Guy Fawkes mask and recited part of the traditional Bonfire Night Verse set to a dramatic soundtrack), took charge of proceedings, together with TV star, author and model Zsuzsa Demcsák.

One of the highlights, and a key fundraising element of the night was a Live Auction, offering a range of generously donated items. Yet more was raised through the silent auction.

Live music came in a number of forms, from Ian O’Sullivan who sang in the welcome zone, to Steve Collison and Marcello Maruccia who played relaxed versions of rock and pop tunes.

Later, Ricky Party’n Band got guests dancing to live versions of pop hits, and finally DJ Andrew Woods entertained guests until 1 p.m. At the end, Stephen Linfitt, the founder of XpatLoop.com and organizer of this charity gathering for 15-plus years, thanked everyone involved.

PRESENTED CONTENT

Art World Comes Together to Celebrate 40 Years of the Spring Festival Müpa Budapest CEO Csaba Káel has been playing an important role in building the worldwide reputation of Budapest as one of Europe’s vibrant cultural destinations. Since September he is also the Government Commissioner for developing the Hungarian national motion picture industry, as well as the chairman of the executive board of Budapest Spring Festival, as Müpa Budapest is not just a key location, but the main organizer of the prestigious event series, that has just announced its anniversary program.

BBJ STAFF

BBJ: From the film industry to the performing arts scene: could we say that cultural experiences have a strong impact on the image and the brand of a city?

Csaba Káel: I firmly believe that unforgettable cultural experiences are shaping the way we think about a certain city or country. Creating a complex and engaging Budapest experience for visitors and locals through the arts and culture is an important mission for me. Budapest Spring Festival, and of course Müpa Budapest as well, provides visitors with an extraordinary program selection year

by year. We are deeply committed to quality and diversity, while we are always searching for new, fresh approaches and innovative solutions. In programming, in communication, and strategy as well.

BBJ: The Budapest Spring Festival will celebrate its 40th anniversary next year. How do you plan to mark such a landmark occasion?

CK: I am extremely proud to say that Budapest Spring Festival has become one of Central Europe’s most important celebrations of the arts during the past four decades and attracts massive international attention, with satisfied visitors returning from all over the world.

We are celebrating the 40th festival with a selection of exciting new productions, Hungarian masterpieces and extraordinary international projects. Some of the invited artists – Sergei Nakariakov, Ballet Company of Győr or Erika Miklósa – have a nice history and strong bond to the festival, and we are excited to welcome them back on stage for this anniversary.

BBJ: What highlights are you most looking forward too?

CK: It really is not easy to choose: Diversity of art forms and genres is a core value of the festival, and the program is going to be special and colorful in 2020. György Kurtág is one of our Hungarian musical masterminds and a contemporary legend.

According to one critic, his opera – the only opera he has written, “Fin de partie” is a loving farewell to 20th-century modernism.

The opera was premiered in Milan, Teatro alla Scala in November 2018, directed by Pierre Audi, and the Hungarian premiere is going to be one of the musical highlights of the year. Opera lovers can get ready for the concerts of Kristine Opolais and Lawrence Brownlee. One week before Easter, Collegium Vocale Gent and Philippe Herreweghe bring Bach’s “St Matthew Passion” to the Liszt Academy. The opening event of the festival is going to be a real treat for ballet and music lovers: The Ballet Company of Győr, a legendary dance ensemble that is also looking back on a history of four decades, joins forces with

Csaba Káel. Photo by Szilvia Csibi.

Liszt Prize-winning violinist and composer Félix Lajkó to create a new performance of “Giselle” together. And that is just to mention a few highlights.

BBJ: When exactly will the festival run, and what will be the main venues?

CK: The Hungarian capital’s premier cultural institutions and theaters join forces for the 40th Budapest Spring Festival, and the 2020 program includes special venues as well. The Market Hall on Rákóczi tér will host an unconventional production, “The City of Marias”, which is based on Astor Piazzolla’s tango opera, “María de Buenos Aires”. But the capital’s most important concert halls and performing arts centers, from Liszt Academy to the Erkel Theater, from the Trafó House of Contemporary Arts to Pesti Vigadó, are cooperating to celebrate Budapest Spring Festival’s success story and these amazing four decades from April 3-19, 2020.

Energy comes in many forms The new Audi Q5 TFSIe with powerful plug-in hybrid technology.

Electric has gone Audi The average combined fuel consumption of the new Audi Q5 TFSIe is 2.4 –2.0 l/ 100km, its combined electricity consumption is 19.1–17.5 kWh/100km and its combined CO2 emission is 53–46 g/km. The fuel consumption and CO2 emission values have been determined according to the current version of the required standard (Regulation (EC) No 715/2007). These values serve as a basis for comparison with other vehicle types and do not guarantee the actual fuel consumption of the vehicle.