Budapest Business Journal 2922 by Business Publishing Services Kft.

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BUSINESS JOURNAL BUDAPEST

VOL. 29. NUMBER 22

DECEMBER 3 – DECEMBER 16, 2021

SPECIAL REPORT Christmas Shopping

SPECIAL REPORT

Black Friday Sales: Better Than Expected, but Barely While the odds may have been (mainly) against retailers, sales were not so bad during Black Friday. But prolonged high inflation and new waves of the pandemic may hurt deeper sales next year. Barabás Balázs embarks on some data mining to evaluate the pre-Christmas deals. 13

SPECIAL REPORT

Bringing the Writing of Bánffy to a Wider Audience Today, Miklós Bánffy and his works are little known even among Hungarians, less still among foreigners: Northern Irishman Thomas Sneddon has set out to change that, as Kester Eddy reports. 14

Stocking up for Christmas

SOCIALITE

János Bródy: Singer Poking the eye of the Establishment Janós Bródy, who turned 75 this year, is a revered artist in this country. As David Holzer is told, “Ask any Hungarian, especially over the age of 40, about Bródy and his career as a bandleader and solo artist, as well as his stage musicals, particularly ‘István, a király’ (Stephen, the King).” 18

NEWS

MNB Continues Fighting Surging Inflation

As part of the new phase of monetary policy, the National Bank of Hungary unexpectedly raised rates again on Nov. 30, for the fourth time in two weeks. The latest move gives the MNB more room to maneuver amid a surging inflationary environment. 3

AL R PEC I

EPOR

Bálint Fazekas, head of sales at Euronics, says the retailer started preparations for Christmas much earlier this year and has built up store inventories 25% larger than they were in 2020. All this to try and circumvent the various supply chain problems. 16

BUSINESS

People, Know-how, Quality Help Arconic Köfém Grow

Marking its 80th anniversary in Hungary, ArconicKöfém Mill Products Hungary Kft., one of the leading aluminum rolling mills in Europe, has launched a year-long series of events in Székesfehérvár (65 km southwest of Budapest). 7

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Budapest Business Journal | December 3 – December 16, 2021

THE EDITOR SAYS

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

Kester Eddy, Bence Gaál, David Holzer, Levente HörömpöliTóth, Christian Keszthelyi, Gary J. Morrell, Nicholas Pongratz, Gergely Sebestyén, Robert Smyth, Zsófia Végh. LISTS: BBJ Research (research@bbj.hu) NEWS AND PRESS RELEASES:

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What We Stand For: The Budapest Business Journal aspires to be the most trusted newspaper in Hungary. We believe that managers should work on behalf of their shareholders. We believe that among the most important contributions a government can make to society is improving the business and investment climate so that its citizens may realize their full potential. The Budapest Business Journal, HU ISSN 1216-7304, is published bi-weekly on Friday, registration No. 0109069462. It is distributed by HungaroPress. Reproduction or use without permission of editorial or graphic content in any manner is prohibited. ©2017 BUSINESS MEDIA SERVICES LLC with all rights reserved.

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THE RISE OF OMICRON The Rise of Omicron may sound more like a Marvel Universe film than the latest iteration of COVID19, and it may or may not prove a hugely significant development. It has underlined both the naivety of those thinking, or perhaps more accurately hoping, that the worst is behind us and the fragility of the global economic recovery. These threads intertwine into a fiendishly complex equation, but the crucial input into that algorithm is the lack of data about Omicron. In recent days, respected scientists have suggested the variant is very much of concern because of the unusually high number of mutations it displays and an apparent step change in transmissibility from Delta. But we have also had equally respected researchers suggesting the level of infection might be less severe than, for example, Delta, the currently dominant strain of the coronavirus. One of those outcomes sounds worse than the other, but they are not mutually exclusive. The critical factor limiting our knowledge is precisely that; limited knowledge. We need more data, which implies more people infected, to understand Omicron better. Not that lack of knowledge stopped investors from passing judgment. On Friday, Nov. 26, in the wake of the news of the discovery of Omicron breaking, the Budapest Stock Exchange’s main BUX index fell 2.6%. On Monday, Nov. 29, having had a weekend to mull it over and buoyed by the hope that things

might not be as catastrophic as at first thought, a partial recovery saw the BUX back up by 2.1%. The day after that saw shares drop again right at the end of trading, this time by 0.2%. The Budapest bourse is by no means alone in these bipolar mood swings. What would calm the markets would be news that the current vaccines, developed at such remarkable speed starting from all but scratch back in early 2020, are at least reasonably effective against Omicron. The problem is that it will take a little while before we can know that; buckle up and jump aboard the stock exchange roller coaster. In the meantime, Hungary’s retailers, hoteliers and resterauters will all be hoping that the mask-wearing reintroduced by the government for indoor settings is the limit of the restrictions redeployed in the run-up to Christmas. For now, the Advent Market is still open, albeit behind a cordon, which you need a COVID immunity card to get past. That is more than can be said for the market in Vienna, which was closed when the lockdown on the unvaccinated in Austria was extended to all citizens. All of this makes for a rather downbeat editorial this issue, for which I can only apologize. By the time you read this, we will be just three weeks from Christmas. Keep well, and keep your fingers crossed. Robin Marshall Editor-in-chief

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Why Support the BBJ? • Independence. The BBJ’s journalism is dedicated to reporting fact, not politics, and isn’t reliant on advertising from the government of the day, whoever that might be. • Community Building. Whether it is the Budapest Business Journal itself, the Expat CEO award, the Expat CEO gala, the Top Expat CEOs in Hungary publication, or the new Expat CEO Boardroom meeting, we are serious about doing our part to bind this community together. • Value Creation. We have a nearly 30-year history of supporting the development of diversity and sustainability in Hungary’s economy. The fact that we have been a trusted business voice for so long, indeed we were the first English-language publication when we launched back on November 9, 1992, itself has value. • Crisis Management. We have all lived through a once-in-a-century pandemic. But we also face an existential threat through climate change and operate in a period where disruptive technologies offer threats and opportunities. Now, more than ever, factual business reporting is vital to good decision-making. For more information visit budapestbusinessjournal.com

25 Years of Bringing Burns to Budapest The 25th annual Budapest Burns Supper will be held on Saturday, Jan. 22, 2022, at the Corinthia Hotel Budapest, promising, as the organizers put it, “Another evening of fine food, fine wine, the inevitable whisky or two, and some traditional Scottish entertainment.” BBJ STAFF

favorite “bard.” The Budapest Burns Suppers organized by the Robert Burns International Foundation have been held in the Grand Ballroom of the Corinthia since 2004, although the original venue was what was once the Hűvösvölgyi Vigadó, out in District II. The Budapest evening features all of the usual elements of a Burns Supper, including pipers who travel from Scotland specifically for the event. What makes it stand out is the fundraising element, generating huge amounts over the years to help seriously ill children in Hungary. The supper is, therefore, also a celebration of the work of the foundation over the previous year. There are no administration costs of organizing the supper, as these are covered by sponsors. A significant part of the money raised on the night comes from the raffle and auction.

Tickets went on sale at 9 a.m. on Monday, Nov. 29 and can be ordered through the official website of the organizers, the Robert Burns International Foundation (rbif.hu/events/2022-burns-supper/). Some 300-plus guests are expected to attend the 2022 anniversary event. A Typical Budapest A Burns Supper is a celebration of the life and Burns Supper Menu works of the poet Robert (“Rabbie”) Burns. • Cold Starter Sometimes called the Scottish Bard and regarded as • Fresh Haggis, flown in from Inverness, the country’s national poet, he is to Scotland what Scotland, with Champit Neeps and Tatties Shakespeare is to England. These memorial suppers (mashed swede or rutabaga and potatoes) are typically held on or around the poet’s birthday • Main Course on Jan. 25, although that wasn’t always the case. • Dessert The First Supper • Cheese with Oatcakes The first Burns club was founded in Greenock, Scotland, • Coffee and Tea with shortbread in 1801 by merchants from Ayrshire, some of whom had known Burns. They held the first Burns supper on what they thought was his birthday on Jan. 29, 1802, but in For more on Burns the man, there is also 1803 discovered that the correct date was, in fact, Jan. a very thorough biography on the website of 25, 1759; since then, suppers have been held on that day the Encyclopædia Britannica (britannica.com/ or the nearest Saturday to it. biography/Robert-Burns). You might also While extremely common in Scotland, Burns Suppers check out robertburns.org, the website are also held throughout the world by groups of Scots, of Burns Country. giving everyone the chance to celebrate Scotland’s

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Budapest Business Journal | December 3 – December 16, 2021

News///macroscope

Central Bank Continues Fine Tuning to Tackle Surging Inflation

Industrial production in Hungary, 2001-January-October 2021 Producer volume index

ZSÓFIA CZIFRA

Once again, the National Bank of Hungary is using unorthodox measures as it continues the monetary tightening cycle it started in June. In an effort to support the Hungarian currency and keep surging inflation under control, the Monetary Council has deployed another tool. Now the base rate and the one-week deposit rate have taken different paths. Only two days after its latest rate hike, the National Bank of Hungary introduced further moves: it raised the one-week deposit rate to 2.5% at its weekly tender on Nov. 18, which was followed by another step a week later, elevating the one-week deposit rate to 2.9%. “The one-week depo rate will exceed the level of the base rate as long as the commodity and financial market risks relevant to the inflation outlook prevail,” a bank statement said, adding there was no time limit for this decision. In an unexpected move on the last day of November, the MNB made its interest rate corridor “asymmetrical,” setting the stage for further monetary tightening. At a non-rate-setting meeting, the bank raised its collateralized loan rate by 105 basis points

4.1%

and the overnight deposit rate by 45 basis points to 1.6%. “Widening and setting the interest rate corridor asymmetrically upwards is an integral part of the strategy of the new phase of monetary policy,” the bank said.

Source:

Forint Firms

The forint, which hit a new record low at HUF 372 per euro last week, immediately firmed after the announcement on Nov. 30, reaching HUF 366.1 versus the euro. According to ING Bank analyst Péter Virovácz, the move could help shore up the forint to around 360 by the end of the year. However, he warned that the bank’s tightening measures take effect with a substantial lag due to a complicated policy toolkit. The MNB was the first in the European Union to undertake a tightening cycle to combat increasing price pressures in the middle of a faster-than-expected recovery from the COVID-19 pandemic. On June 23, the Monetary Council raised the base rate to 0.9% from the 0.6% that had been in effect since July of 2020. Since June, the base rate has been raised five times, now standing at 2.1%. Despite the strong inflationary pressures, the bank slowed the pace of the rises in September (to 15 basis points from the previous 30) but accelerated again at the end of November. The MNB has raised its base rate by a combined

150

basis points

since June. The second reading of GDP data for the third quarter of 2021 has also

come out. According to the Central Statistical Office (KSH) release, the volume of gross domestic product increased by 6.1% in Hungary in the third quarter compared to the corresponding period of the previous year. According to seasonally and calendar adjusted and reconciled data, the performance of the economy rose by 0.7% compared to the last quarter and by 6.1% compared to the corresponding period of the previous year. In Q1-Q3 2021, the economic performance was 7.1% higher (6.8% higher according to seasonally and calendar adjusted and reconciled data) than in the same period of the previous year. The latest figures confirmed that the expansion of the Hungarian economy in the third quarter was below expectations, said Gábor Regős, head of the macroeconomics department at Századvég Gazdaságkutató Zrt. The second readings figures reveal the reasons for this: industry was already known to be performing poorly, but the decline in agriculture and education was surprising, the analyst said. Significant growth has been seen in several industries that have been particularly hit by the viral situation

(e.g., transport, tourism) but have not yet reached pre-viral levels. The information and communications sector has soared and achieved double-digit growth. On the consumption side, consumption and investment have expanded substantially, perhaps at a slightly slower pace than expected, Regős said. Concerning the fourth-quarter data, the question is to what extent the performance of the industry can speed up, how much this will be hindered by the shortage of raw materials, and what the effects of the fourth wave of the coronavirus will be, Regős concluded. He added that economic growth could exceed 6.5% this year on an annual basis, while it could be around 5.5% next year.

Numbers to Watch in the Coming Weeks On Dec. 3, the KSH will publish October retail trade data. The performance of the Hungarian industry in October will be detailed on Dec. 7. The following day, KSH will release data on the November consumer price index.

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TritonLife Looking to Expand a Healthy Business

Health Matters

A monthly look at health issues in Hungary and the region

purposes in person, and it’s also useful if a patient is present for their knee prosthesis surgery!” The pandemic lockdowns gave healthcare digitalization in general a notable boost. Social distancing called for alternative channels in medical care, and the government also took important steps by incentivizing digital administration and introducing EESZT, the central storage platform for health records. Artificial intelligence is also taking on more of a role in facilitating decision-making and diagnoses.

Leading private healthcare provider TritonLife Group says it is expanding rapidly to serve growing market needs. Its latest facility also features in-patient care. LEVENTE HÖRÖMPÖLI-TÓTH

Private healthcare in Hungary was growing by more than 10% year-onyear on average between 2012 and 2018, with its total revenues estimated at HUF 282.5 billion in 2018, according to statistics from the business portal portfolio.hu. Although the market has shown signs of consolidation lately, the most recent news-worthy development actually featured a new opening. As Lajos Fábián, co-owner of TritonLife Group, explains to the Budapest Business Journal, there are no more small-sized businesses on the market that appeal for acquisition; they are simply not mature enough from the business or professional perspective. “Of course, certain undertakings may become suitable targets with time, but for now, ever-stronger market demand should be met by cautious expansion of existing capacities,” he says.

Appercell Runner-up at EIT Health InnoStars Awards

Lajos Fábián According to 2019 figures, TritonLife was the fourth local private healthcare provider in Hungary, with the secondhighest revenue growth rate of 44% and staff of 350. That also makes it one of the biggest employers in the industry. The latest manifestation of the abovementioned capacity expansion is the launch of TritonLife Duna Private Hospital. The facility provides both outpatient and in-patient services, the latter showing the dire need for quality hospital beds overall, the provider says.

Locomotion

Primarily, locomotor (orthopedic, spinal, and hand) surgery will be performed in the hospital’s two new operating rooms. This and the opening of a third private hospital in the city, TritonLife Medical Center RK64, will push the company’s total number of operating rooms in Budapest to 12.

development András Bencsik said Appercell wants to “help pharmaceutical companies fail faster,” referring to the 80-90% failure rate in clinical trials for drugs because of differences between human and animal biology and other factors.

Hungarian startup Appercell, which has developed a method for drug development that could minimize the need for live animal experiments, was runner-up at this year’s EIT Richter Q3 Health InnoStars Awards, Income up 69.2% business daily Világgazdaság The third-quarter net income (Global Economy) reported. of Hungarian pharmaceuticals In the contest organized by company Gedeon Richter rose EIT Health, a knowledge and 69.2% year-on-year to HUF 38.2 innovation community of the billion, boosted by higher sales European Institute of Innovation and a financial gain, according to and Technology (EIT), Appercell an earnings report published on competed against other startups the website of the Budapest Stock from European countries with Exchange. Revenue increased moderate innovation capacity for support to bring its idea to market. 14.4% to HUF 157.5 bln. The direct cost of sales rose at a faster clip, Co-founder and head of business

The group was initially known for its maternity wards, hosting 2% of all births in the country. Over time, other areas have been added to the portfolio of the 15-year-old organization. Fábián says that locomotor surgery is relatively easy to plan, and it has different support service needs to maternity care, so it was logical to find a separate home for it. More physical space is badly needed despite the rise in telemedicine. True enough, it saves time for customers and staff alike, but it’s far from being a cureall, Fábián adds. “Just to stick to the example of the locomotor center, preliminary consultation, assessment of x-ray, CT, or MRI records, and discussion of surgery plans can be done remotely without a problem. But a 79-year-old patient with diabetes should definitely be checked for anesthesiology

climbing 18% to HUF 71.8 bln. Gross profit rose 11.5% to HUF 85.7 bln. Sales and marketing costs increased 14.6% to HUF 27 bln, and R&D spending was up 24.2% at HUF 16.5 bln. The operating profit rose 10.6% to HUF 33.1 bln. The bottom line was lifted further by a HUF 6.6 bln net financial gain, compared to a net loss of HUF 4.5 bln in the base period.

Hungary Establishes National Healthcare Research Agency The Ministry for Human Capacities has announced the establishment of the National Healthcare Research Agency (NEKU) to support clinical studies and medical research, and make innovative therapies available

“Just to stick to the example of the locomotor center, preliminary consultation, assessment of x-ray, CT, or MRI records, and discussion of surgery plans can be done remotely without a problem. But a 79-year-old patient with diabetes should definitely be checked for anesthesiology purposes in person, and it’s also useful if a patient is present for their knee prosthesis surgery!” The healthcare provider says it has several ambitious projects in the pipeline. TritonLife Szt. Lukács (St. Luke) Private Hospital is up for expansion next year, with seven new medical locations in the countryside are scheduled to open from Kaposvár to Győr through 2023.

to a broader range of patients, according to state news agency MTI. NEKÜ, an initiative of the Minister for Human Capacities Miklós Kásler, aims to improve conditions for conducting clinical studies and medical research, support research centers and healthcare facilities in the practical application of national research directives, and share good practices through international cooperation. The ministry also announced the establishment of the National Medical Sciences Research Center (NOKK), the first such institution in Hungary devoted exclusively to developing and supporting clinical studies and medical research. The measures could more effectively involve Hungary in international clinical trials, the ministry said.

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News | 5

Fourth Wave Restrictions Kick-in Coronavirus ///roundup As the number of infections continues to rise during the fourth wave of the coronavirus pandemic, the government once again started requiring people to wear facemasks in indoor public spaces from Nov. 20. NICHOLAS PONGRATZ

During a weekly press conference on Nov. 18, Gergely Gulyás, the head of the Prime Minister’s Office, said masks would be required in shops, museums, cinemas and theaters, and at service providers where more than five people are present. Decisions on whether to insist on masks in schools would be left up to headteachers, while booster shots will be made mandatory in the healthcare sector, he added. Additionally, the government submitted a proposal to Parliament on Nov. 23 to extend the effect of government decrees issued by the government under a state of emergency due to the coronavirus crisis until June 1, 2022, according to the state news agency MTI. Back on Sep. 27, MPs had decided to extend the effect of the legal provisions until Jan. 1, 2022, with a vote of 112 for, 25 against and no abstentions.

Meanwhile, chief medical officer Dr. Cecília Müller told TV news channel M1 that vaccination against the coronavirus has never been more necessary than it is now, describing the current predicament as “a race against time.” Müller stressed that the rising number of people becoming infected and an increasing amount going to the hospital demonstrates that we are in the fourth wave of the epidemic. While noting that the vaccine does not protect 100% from the infection, she said that it does prevent a serious course of the disease requiring hospitalization. To further that end, the government organized a vaccination action week from Nov. 22-28. During that period, anyone could visit any of 101 participating hospitals or inoculation centers to get vaccinated between 7 a.m. and 7 p.m., without registering or making an appointment. According to the head of the epidemiology department of the National

the drive, he praised the fact that “very many” had gotten their booster jabs, saying it was of “pivotal significance” ahead of the holidays. At an annual hearing of the parliamentary economic committee, cabinet chief Antal Rogán said the government is planning further vaccination drives in December and January, as well as targeted campaigns in cooperation with health authorities to encourage as many people A woman receives the third booster as possible to take up the booster jab. dose of the German-American Booster jabs could be coming just in time Pfizer-BioNTech Comirnaty in light of a new COVID variant raising coronavirus vaccine at the Ferenc alarm globally. On Nov. 26, the Council Markhot Hospital in Eger on Dec. 1, of the European Union discussed possible 2021. Photo by Péter Komka / MTI. EU responses to the newly identified B.1.1.529 variant, dubbed Omicron. In line with the ultimate decision, Hungary decided to restrict air traffic and deny Public Health Center (NKK) Ágnes entry of people from the southern African Galgóczi, some 388,000 Hungarians got region while quarantining Hungarians jabs of COVID vaccine during the first returning from there. three days of a week-long inoculation As of Nov. 28, the National Center for drive, a figure that eventually amounted Public Health (NNK) said it had not yet to 742,000 by the end. detected Omicron in the samples present Pivotal Significance in Hungary. However, NNK acknowledged The campaign proved so successful that it had appeared in the “immediate the government decided to extend an neighborhood” in Austria, the Czech inoculation drive by another week, Prime Republic, Germany and Italy over the Minister Viktor Orbán said in a weekly weekend. According to the World Health interview on Kossuth Rádió on Nov. Organization, there is an increased risk of 26. While conceding that “few” people re-infection with this Omicron compared to had gotten their first COVID jab during previous novel variants of the coronavirus.

If you are a UK National living in Hungary before 1 January 2021, the UK-EU Withdrawal Agreement protects your rights. This means that you need to apply for a new National Permanent Residence Permit in Hungary by the end of 2021 even if you already have a pre-transition period EU residency document. All UK nationals and their family members who want to continue living in Hungary must apply before 31 December 2021. Documents issued under EU rules will lose their validity after 1 January 2022. You can find further information on the scheme at the website of the Hungarian immigration authority: http://www.bmbah.hu/index.php?option=com_k2&view=item&layout=item&id=1314&Itemid=1853&lang=en.

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Budapest Business Journal | December 3 – December 16, 2021

Redevelopment of Krausz Palota Gets Underway Having been granted a heritage permit, the refurbishment of the classic Krausz Palota by Avison Young has begun with the aim of redeveloping the 130-year-old building into a boutique office building. GARY J. MORRELL

Krausz Palota (or Andrássy út 12) is a World Heritage site built in 1885 based on the plans of the architect Zsigmond Quittner. The complex was initially renovated in 2002, meeting the art historical standards of the day. This much more in-depth refurbishment, designed by BORD Építész Stúdió, will provide 4,600 sqm of class “A” office space over five floors, according to the development plans. “Managed by AEW on behalf of institutional investors and locally managed by Avison Young, the building will be refurbished to become one of the most modern and exclusive offices concepts in

The Krausz Palota on Andrássy út in central Budapest. the city center, focused on fulfilling the high expectations of tenants for aesthetics and comfort, while also preserving the illustrious building for future generations,” says Avison Young. “The renovation will be completed in line with best practice sustainability consideration vying for an ‘Excellent’ ranking under the BREEAM International NoneDomestic Refurbishment sustainability rating,” adds the Toronto-headquartered global commercial real estate services firm. EBH Invest, the general contractor, has now started demolition work and is scheduled to complete the project by the fourth quarter of 2022.

! M Ö R Ö I N D A TEDD SZEBBÉ A RÁSZORULÓ CSALÁDOK KARÁCSONYÁT! Adományozz tartós élelmiszert a kijelölt áruházainkban, vagy vásárolj Adni Öröm! adománykártyát a SPAR online shopban vagy az akcióban részt vevő üzleteinkben! További részletek: www.adniorom.hu 2021. december 16-21.

As part of a UNESCO World Heritage site, the area is historically protected, severely limiting the potential for commercial development and establishing a clearly defined central business district. Genuine class “A” offices are extremely limited, and only a handful of assets are of sufficient scale or have suitable floorplates to cater for largescale or headquarter buildings.

Being Reborn

“We are delighted that a building like this, which defines Andrássy út and its turn-ofthe-century architecture, is being reborn as a modern bureau palace and is taking its rightful place in the most attractive district

of Budapest,” comments Jake Lodge, principal of Avison Young Hungary. “In addition to managing such a building, it is a remarkable task to oversee the renovation to meet the expectations of Budapest’s top companies. It will be targeted as a boutique office building providing bestin-class office accommodation in historical settings located in the upmarket Andrássy út,” Lodge adds. Commercial redevelopment has contributed to the rebirth of city infrastructure, enabling the renovation and preservation of listed buildings in the historic center and enhancing the atmosphere and look of Budapest. However, the permitting and development can be protracted in this area of the city, which acts as a deterrent to developers and investors. Total modern office stock in Budapest now stands at approaching 4 million sqm according to the Budapest Research Forum, which is made up of CBRE, Colliers International, Cushman & Wakefield, Eston International, JLL, and Robertson Hungary. New supply expectations for 2022 represent a sizable 276,000 sqm as several projects scheduled for this year have been delayed, says CBRE. There is currently around 450,000 sqm of space under construction, according to the consultancy; Cushman & Wakefield puts the projected pipeline at 356,000 sqm.

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Budapest Business Journal | December 3 – December 16, 2021

Business

Investing in People, Know-how, and Quality Helps Arconic Köfém Grow Marking its 80th anniversary in Hungary, ArconicKöfém Mill Products Hungary Kft., one of the leading aluminum rolling mills in Europe, has launched a year-long series of events in Székesfehérvár (65 km southwest of Budapest). ÉVA KASZAP

One of its most recent celebrations was the opening of the so-called Arconic promenade in Székesfehérvár, where the company’s foundation supported a project planting 80 trees in a natural walkway for the recreation and wellbeing of local residents. Underlining its commitment to responsible and ethical operations, the Arconic Foundation has granted some HUF 70 million in investments for local communi-ties and non-profit organizations in 2021. The Budapest Business Journal talked with Arconic’s local Hungarian leaders, Zsuzsa Varga, HR Director and managing director, and Balázs Gábor, plant manager and managing director, as well as international executives, Rob Woodall, president of global rolled products for Europe and Asia, and the HR director for rolled products and extrusions in Europe, Russia, and Asia, Françoise Frost. Topics covered included some outstanding business results, core company val-ues, and the challenges of talent management and social engagement in Hun-gary, among other things. BBJ: What are the main driving factors behind your global success despite current disruptions caused by the pandemic? Rob Woodall: Overall, our industry is positioned for growth. Building

areas of environment, health, safety, and community involvement. Building solid quality systems brought it to the level it is today. Thanks to the high engagement of our Hungarian workshop and leadership, the location also earned “the right to grow” with various investments during the years. BBJ: Can you describe the core talent management values of the Hungarian unit? Françoise Frost: We believe that inclusion and diversity are vital advantages that drive innovation and help advance our business. Employees with diverse backgrounds foster diversity of thought and creativity. We aim to grow our talent pipeline by focusing our employer branding on appealing to all and ensuring we create a highly inclusive workplace driven by fairness and equity. We reward performance and role model behaviors that are aligned with our strong company values. We encourage and support professional development, overall wellness, and career progression for employees at all levels.

Zsuzsa Varga: Since there is no professional education for aluminum works in Hungary, we established a dedicated mentor system to assist our newcomers in The Arconic-Köfem tree planting. From left: Balázs Gábor; onboarding. We have also developed an Zsuzsa Varga; Françoise Frost; and Jasper von Zon, the OKJ specialization since these courses, communication director responsible for Europe and Asia. certified by the National Qualifications Register, have recently been phased out by the government. Our OKJ studies are strong partnerships with our global BBJ: Arconic-Köfém Mill Products registered by the Ministry for Innovacustomers, leveraging our technical Hungary has been undergoing tion and Technology, and we encourage capabilities, and training our staff considera-ble growth. To what can and support our staff to take part. We is of the utmost importance for us this be attributed? have our own software-supported talent and enables Arconic to meet the Balázs Gábor: First of all, we are known management program helping congrowing demand in our end markets. for high-quality production. The site sistent performance evaluation. The Ground transportation, building has been in operation for 80 years, has COVID-19 pandemic also made us and construction, packaging, and implemented various investments, and re-think our operations and reshape industrial sales increased compared en-tered new markets throughout its long them to enhance our preparedness for to the prior year, and those trends are history. Additionally, our site has recent-ly addressing potential disruptive events. expected to continue. been ASI [Aluminium Stewardship Initiative] Performance Standard certified, BBJ: How do you see your relationship BBJ: You have a powerful presence in demonstrating our commitment to with the city of Székesfehérvár? Europe. What is the role of the Hunenvironmental sustainability. The ZsV: We are fully committed to our garian unit in this? Hungarian team is strong in know-how social responsibility. Arconic-Köfém RW: Our 2,000 European employees and skills, making our operation costMill Products Hungary Ltd. and its generating 18% of Arconic’s USD 5.7 efficient and well-positioned to meet predecessor have always considered the billion sales speaks for our commitment customer and societal needs. development of the local communities to the European region. We established as a priority. We believe that we have a presence in Hungary through our significant responsibility in creating a predecessor company Alcoa, almost valuable staff base, so we work in close three decades ago. Arconic-Köfém partnership with the local secondary and Mill Products Hungary Kft., in higher education. This year, the Arconic Székesfehérvár, cur-rently employs Foundation and our company have backed approximately 800 workers in its the local community with some HUF 70 rolling mill, cast house, and business mln. Among the projects we support, we support departments. The cast house give priority to those that add value to manufactures rolling mill ingots, round the people living in our communities, cross-section billets for extrusion and which is in line with Arconic’s values. Rob Woodall It’s important for us to make our local forging purposes- from virtually any type of aluminum alloy. Our main community and the environment cleaner, markets are automotive, construction, greener, more sustainable, more beautiful, ma-chine manufacturing, packaging, BBJ: How does the global unit support and habitable. electrical products, household products, Arconic in Hungary? and transportation sectors. ArconicRW: Since the 1990s, when Arconic’s BG: The Köfém site has been part of Köfém plays a vital role within the predecessor set foot in Hungary, the Szekesfehérvár local community global Arconic system. Not just on Köfém operations have been able to for 80 years. Our long partnership with the operations side but also on the tap into Arconic’s U.S. metallurgical the community is a good indication business services side as the location is scientists. The site was able to start that many, if not all, things are going home to a large global shared services supplying Arconic’s global customer well for both partners. We have always department that supports several base (90% of the materials produced appreciated the support we have received international Arconic businesses at Arconic Köfém are exported) and from the local authorities and are proud and resource units. received an array of support in the that we have been able to grow together.

8|2

Business

www.bbj.hu

Budapest Business Journal | December 3 – December 16, 2021

EY Brings Global Delivery Services Center to Hungary, Eyes Further Expansion

transformation and innovation-led services from clients worldwide. EY GDS also seeks strong cooperation with local universities to provide valuable market knowledge and access to quality talent.

Diverse and Inclusive

“Known for its purpose of building a better working world, EY offers a diverse and inclusive culture where people are empowered to be intentional about their careers, to embrace continuous learning, and to seek out the experiences and skills that will help them bring out the best in themselves and others,” Rao says. What are the career opportunities for Hungarian talent? EY’s GDS aspires to grow its extensive workforce continuously. “Every day, EY GDS builds an exceptional experience for this mammoth workforce where each has a say, feels inspired and motivated to bring their authentic selves to work, and feels a sense of belonging. The organization focuses on empowering people to be intentional about their careers, seeking out the experiences and the learning, the skills, the impact, the leadership behaviors that will help them bring out the best in themselves and others,” according to Rao.

EY’s Global Delivery Services (GDS) Center will be housed at the Hungarian headquarters and aims to employ 500 professionals in the next three years. The Budapest Business Journal talks to Srini Rao, global vice-chair at EY GDS, about how the Big Four player expects the Budapest office to bring a fuller line to its service offering by supporting internal operations. CHRISTIAN KESZTHELYI

EY sees GDS as playing a vital role in the delivery of its growth strategy. Over two decades, the unit has evolved from providing simple delivery support to a 60,000-strong network of professionals. With the addition of Budapest, they are now based in 18 cities across seven countries, including Argentina, China, India, the Philippines, Poland, and the United Kingdom. EY GDS is continuously exploring possibilities to increase its presence in key markets in Europe. In this context, the new center in Budapest will be the fifth city for the service in Europe, and it will initially share space in EY Hungary’s headquarters. “EY Global Delivery Services is a dynamic and truly global network of service delivery centers. EY GDS teams combine deep technical knowledge with a focus on innovation, technology, and process improvement to create scalable services to support all EY member firms, service lines, and functions across all geographies and sectors,” Rao tells the BBJ. Part of EY’s delivery network, GDS only works with external clients through EY member firms. Teams in GDS centers often work on global client accounts, where local member firm teams may

Srini Rao focus more on in-country clients. Many of the activities, competencies, and services are the same because GDS helps deliver client work. “Together, we help our clients capitalize on transformative opportunities. We also help them fulfill regulatory requirements, keep investors informed and meet the needs of all of their stakeholders. And in a fast-changing world, we give them the support they need to be effective today and create long-term value for tomorrow,” Rao explains.

Attractive Location

The Hungarian capital is an attractive place for setting up EY’s GDS center. The combination of highly-skilled talent, the availability of multilanguage capabilities, the stable economic environment, and support from the Hungarian government were all factors when EY decided to base the center here. The HUF 767 million investment is supported by a Hungarian government grant of HUF 384 mln. Initially, the center will focus on tax-related services, joining the 10,500-strong international team. However, EY has big plans for the center. Via planned capacity and

capability building, the hub will support all EY service lines and business disciplines, including audit, consulting, strategy, transactions, and operation functions. “The EY GDS team in Hungary is currently focused on delivering services to support EY’s tax finance operate service, and in the year ahead, will launch payroll services, legal managed services, and transfer pricing services. It also plans to expand into VAT services, accounting compliance and reporting, corporate income tax, and mobility services in the future. Adding a GDS center in Hungary brings a fuller-service offering, as well as additional language capabilities, and will enable GDS to serve EMEIA-based EY teams and their clients in a more holistic way,” the global vice-chair says. As confirmed by Minister of Foreign Affairs and Trade Péter Szijjártó, EY is planning to scale up its GDS center activities to employ almost 500 professionals by the end of 2024, with a specific focus on tax and accounting-related skills. EY GDS is looking to increase its workforce with accounting, tax, and technology skills, given the strong demand for digital

“The EY GDS team in Hungary is currently focused on delivering services to support EY’s tax finance operate service, and in the year ahead will launch payroll services, legal managed services, and transfer pricing services. It also plans to expand into VAT services, accounting compliance and reporting, corporate income tax, and mobility services in the future.” Following the COVID-19 pandemic, like many other companies, EY’s GDS teams did the best they could to transition into working from home seamlessly. The firm insists it was able to continue business as usual overnight. The vice-chair adds that he believes that such arrangements will be characteristic of what the future of work will look like. There is also an increased focus on well-being and engagement. “The organization focuses on creating an infrastructure to support people in their roles beyond work as primary caregivers; this is in an increasingly virtual and truly remote environment. EY GDS continues to be the epicenter of efficiency, innovation, and modern practices and has evolved into a hybrid model, part physical, part virtual, and highly digital,” Rao concludes.

www.bbj.hu

Budapest Business Journal | December 3 – December 16, 2021

A Pillar to Stand on: Growing and Moving Just a few months before moving into new offices – so new, in fact, the building is not yet complete – the excitement at ExxonMobil Hungary is palpable. The Budapest Business Journal sat down with the project leads to discuss the details. ROBIN MARSHALL

Business | 9

deliverables, you’re most productive when you work from home. And I think applying that flexibility drives trust and accountability to the employees; to me, that’s the healthy model. With flexibility comes responsibility and judgment. It’s perhaps not the easiest way to do it, but I think it’s the right thing to do.”

Fishnet Carpets

As with all energy companies nowadays, ExxonMobil is keen to improve its sustainability levels wherever possible. A new office building (aiming for LEED “Gold” accreditation) with greater energy efficiency, solar panels, rainwater harvesting, bicycle racks, and EV chargers helps with all that, but so do the internals. “We have acoustic ceiling panels that use 60-plus percent of recycled PET, for example, and we have carpets which are made 100% from fibers derived from discarded fishnet,” says Orbán In the past year, about 300 positions were added to the Global Business Center. Are more on the way, and are there any concerns about filling those posts in a tight labor market?

“It is important we explain

ExxonMobil will relocate the equivalent of what we stand for and a small village in moving its 2,000-plus provide a safe space for all staff from the CenterPoint and myHive employees in the workplace. offices to the GTC Pillar building, just off the Váci ut office corridor in District XIII, We are proud of where in the spring of 2022. we are and committed to “It will be the largest office in all of the Europe, Africa, and Middle East region for further growth as part of our ExxonMobil. It is a global talent hub for core values and focus areas.” all of the region and supporting the entire globe,” says Jeroen Kirschbaum, the lead country manager for Hungary of the Budapest-based Global Business Center. Kirschbaum admits sourcing future “We’re making good progress. It’s talent is “top of mind,” although he adds, András Orbán (left) and Jeroen Kirschbaum. “We’re not seeing that as a constraint to pretty remarkable that despite the pandemic, we’re still, for the most part, expanding further the overall service on schedule; obviously, there have been offering and the work scope from the Evolution-proof a lot of challenges in the construction “If it’s a formal format, they can go into Budapest hub.” “We figured that things are gonna evolve area in general, but we’re still in pretty He can’t yet talk about job numbers an enclosed area; if it’s informal, they over this lease. This is a long-term good shape.” but says the quality of the position can use any of these open-plan spaces. The move will be a staggered affair, with commitment. And things are not going to The size didn’t decrease as a result of matters at least as much as the quantity. be the same five years from now, 10 years the pandemic, but we already have a a March-April time frame for moving in. A good example is the global talent hub from now. We have to remain flexible to “We will have an early move stage for ExxonMobil’s environmental and significantly improved balance pushing where we make sure everything works in respond to the evolution of workplace property solutions organization. collaboration,” Orbán adds. the building. That’s when we want all the needs and employees. The pandemic has “This is a new service offering that has ExxonMobil currently operates a accelerated some of those things, and we inevitable initial problems sorted so that never been handled out of Budapest or hybrid model combining office and have made changes in design and how we home-based locations due to the when we make the big move, day one in a centralized way. Now, most of the use the spaces,” he explains. is perfect for everyone else,” explains financial and commercial support for our pandemic. While Kirschbaum sees the “All of the meeting spaces are ‘zoomAndrás Orbán, the business venture property solutions and environmental office as a “catalyst for innovation,” he friendly rooms,’ so that we can also manager responsible for the Budapest says working for home is likely to remain activities worldwide are coordinated out effectively work in virtual or hybrid building project. of the Budapest hub. And so we appointed part of the structure. modes with all of our partners and “We think it will be two weeks, roughly, a new managing director, who is also “I think there will be a tremendous business colleagues all over the world,” to get everything sorted out, then we will the first female Hungarian managing amount of flexibility provided to all have the main move, and we will try to get Kirschbaum says of the changes made. director for ExxonMobil Hungary, to employees, based on their role, based on “There’s full Wi-Fi across the entire as many people as possible into that. How lead that new division. That’s also one their teams, and based on their personal building; it is the first ExxonMobil building considerations,” the country lead says. long that is going to be depends on many that we expect to continue to grow and in the world that will be completely wireless He argues it is essential not to apply a things still, but let’s say two, three weeks, capture more opportunities.” and one of the first buildings in the region.” “one size fits all” approach. and then we will have the remaining 20%, The appointment of a Hungarian woman Orbán agrees that flexibility was roughly, who didn’t move in earlier for as MD is timely, given that the company “Personal situations are not the same; already a crucial element of the new business reasons,” Orbán says. just this month produced its first annual work deliverables are not the same. And design. “We are tripling the collaboration they’re fluid over time. So there might ExxonMobil will be the only tenant in diversity report. It is both a statement of spaces and areas compared to what we the Pillar building. But having signed intent and a record to be judged on and be projects that you’re working on have today. We will have a large area the lease in October 2019, has the where, for your personal growth, for your drive accountability, Kirschbaum says. concept for how the building will be used we refer to as the Pavilion for informal “It is important we explain what we productivity, you should be in the office collaboration, think tanks. We have changed, given the experiences learned stand for and provide a safe space for every day because that’s what’s going to team tables in the open plan area, so through the pandemic? all employees in the workplace. We are make you successful,” he explains. there are more opportunities for people Kirschbaum says there had been a proud of where we are and committed “And there might be other days to collaborate depending on their needs,” that, maybe because of personal clear strategy to build flexibility into the to further growth as part of our core initial design long before COVID struck. the business venture manager says. values and focus areas.” considerations, or because of the work

10 | 2

Business

www.bbj.hu

Budapest Business Journal | December 3 – December 16, 2021

The Economic Vulnerability of Central European Economies Two related phenomena may characterize today’s global economic scene: first, an “everything boom,” where virtually all asset prices have rapidly exploded in value, and second, steeply rising indebtedness, writes Les Nemethy. Both these phenomena have been underpinned by extremely low interest rates, which have simultaneously fueled high asset prices and a massive debt binge, whereby governments, corporates, and individuals worldwide take advantage of central bank suppressed interest rates. In finance, the concepts of debt and risk are inextricably intertwined. The more debt, the more chance of bankruptcy and default. It is almost a certainty that the current situation will finish badly; the big question is when? Central Europe is not alone in its high debt levels. In 2020, the global average national debt surpassed 100% of GDP. Countries like Japan and Greece have

spectacularly high national debts at 230% and 168%, respectively, although Japan has an incredibly powerful economic engine. Total global debt in 2020 increased from 300% to 360% of global GDP, an eye-popping increase. The numerator of this ratio increased due to massive pandemic spending; GDP, the denominator, decreased in many countries, also due to the pandemic. If we see the storm clouds approaching, we should batten down the hatches. In this column, we look at how vulnerable Central Europe might be to a potential economic downturn. We do this by providing the highlights of an analysis by Rabobank on Poland, the Czech Republic, and Hungary.

Vulnerability of Central European Economies Economic Indicators Current Acct Deficit (as a % of GDP) Inflation (% Y.O.Y.) Economic growth (%) Budget balance (as % of GDP) Competitiveness (value) Political risk (scale 0-100) Security risk (scale 0-100) FX reserves (import cover months)

Until 31 December 2021

Up to 50% discount for performances organised by the Opera between 1 January and 31 July 2022. opera.hu | facebook.com/Operahaz

Hungary -5.7 0.4 3 -3.6 -7.5 4.3 71.5 87.3 3.3

Poland 1.5 4.1 2.9 -2 -4.9 4.6 56 88.6 5.6

2.4 77.5 43.4 34.4 56.2 26.6 3.3

-4.4 148.6 85.7 21.1 70.4 31.5 17.7

1.3 53.8 60.6 34.9 44.6 14.5 15.9

Financial markets index Volatility Market Beta Liquidity Hot money indicator

-1.1 9.1 -0.4 0.4 0.1

-1.5 10.1 -0.3 0.4 -0.2

0.4 9.8 -0.3 0.6 -1.4

Source: Rabobank, World Bank, IIF, OECD, national sources

Over the past few years, in most countries, we have had the lowest interest rates in the history of the world. Hungary This is the only reason high debt levels have not led to default and crisis. Interest rates are so low they are lower than and Poland 3.23. While Poland and inflation rates in most countries. the Czech Republic receive marginally If interest rates were to suddenly passing scores, according to Rabobank, rise (in other words, a reversion to Hungary is not only the weakest the historical mean of real interest among the major Central European rates), it would simultaneously: economies. It also has the second1) knock the wind out of asset prices, worst performance among 20-plus meaning a possible collapse of global emerging economies ranked, financial markets, and after Argentina. 2) create failures in debt service, defaults The poor Hungarian score is driven and bankruptcies of individuals, by high levels of total external debt, corporations and governments. primarily government debt and debt Thus everyone, governments, of non-financial corporations (NFCs). corporations, and individuals, need A high percentage of debt is owed to to consider antifragility measures. external creditors. The Omicron variant of the coronavirus may or may not be the next shock that Antifragility hits the financial system, but mutations As American financier Howard Marks will not stop with Omicron. Sooner or said: “Financial [stability] doesn’t come later, there is likely to be a mutation from making or having a lot of money.[.…] that does not respond to vaccines. And You know what it comes from? Spending there are numerous other non-pandemic less than you make. Living within your “black swans” swimming out there. means. It’s important to know that your antifragility comes from the extent to which you are not at the limit.” Les Nemethy is CEO of EuroThis may be applicable not just for Phoenix Financial Advisers individuals but also for companies and Ltd. (www.europhoenix.com), nations. Most of the world seems close to a Central European corporate the limit, some closer than others. finance firm. He is a former The world economy is integrated World Banker, author of as never before; the contagion risk is Business Exit Planning (www. enormous. This is why antifragility businessexitplanningbook.com), measures (for example, reducing and a previous president indebtedness, denominating debt in of the American Chamber local currency as much as possible, of Commerce in Hungary. lengthening the tenor of debt) would be so important.

-11.73,

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Czech Rep 0.6 3.8 2.8 4 -5 4.8 67.9 93.6 10.3

Debt vulnerability indicators Total external debt (as a % of GDP) Government debt (as a % of GDP) Household debt (as a % of GDP) NFC debt (as a % of GDP) NFC debt in foreign currency (as a % of GDP) Government debt in foreign currency (% GDP)

When the scores are aggregated, they provide the following results: the Czech Republic 1.93,

The Corporate Finance Column

www.bbj.hu

Budapest Business Journal | December 3 – December 16, 2021

PRESENTED CONTENT

An Eternal ‘Work in Progress’

LEVENTE HÖRÖMPÖLI-TÓTH

Believe it or not, the entire nervous system is subject to the proper functioning of so-called ion channels as the process of nerve cell stimulation depends on them. Furthermore, salt absorption and excretion are also determined thereby. With that in mind, targeted research has been underway for a long time now to find out as much about these crucial parts of the body as possible. László Csanády, a biologist at the Hungarian Center of Excellence for Molecular Medicine (HCEMM), leads a team whose mission is just that. “We need to learn about their structure, way of functioning and pharmacology, and thanks to a major breakthrough

2016

now we have better chances to do so than ever,” he says. Indeed, a new method called cryo-electron microscopy allows the detailed structure of ion channels to be determined. Until then, just a few low-resolution maps were available, whereas more than a thousand have been identified to the finest atomic detail since the abovementioned invention. Salts such as sodium, potassium, calcium and chloride cannot freely

cross the cell membrane but do so through dedicated pores. Each pore possesses a gate that can be open or closed and lets through only one type of ion. Cells determine which kinds of pores should be open and for how long, and that is the basis of the processes of ion absorption and excretion.

Business | 11

all very motivated, they have super professional attitudes, and we love working with each other,” he says. Photo by Mongkolchon Akesin / Shutterstock.com

You may never have heard of ion channels, but they are more important than you think, and they even have something to do with Elon Musk. Biologist László Csanády of HCEMM tells the Budapest Business Journal about his work on getting the most out of understanding their secrets and discusses the incredible ROI a cow’s heart can generate.

Welcome Return

Those with a doctorate often move away from Hungary, preferring to go abroad, find a job in the private sector, or leave for the clinical segment. Yet, at HCEMM, they tend to stay on, a clear demonstration of the attractiveness of the place. Csanády himself spent five years in the United States doing his Ph.D. But he returned home and was welcomed by professor Veronika Ádám’s Biochemistry Institute. He says occasional bumps on the road give him extra motivation. As a result of the COVID-induced disruption of supply chains, for instance, they ran out of a crucial enzyme necessary to activate one of the ion channels they study. They had no choice but to make some of their own from cow heart.

“Since we are doing basic research, our purpose is not necessarily to develop a particular drug but rather to make advancements in understanding the molecular strategies that can be exploited to develop such drugs.”

these ion channels. That’s why not only the metabolism depends heavily on ion channels but also all kinds of stimulusbound body activities. Hence, treating heart rate conditions and seizures are on the radar of researchers as well. The latter moved Elon Musk’s imagination too. Under his Neuralink project, a brain-machine interface (BMI) would implement brain stimulation to interrupt or even prevent epileptic seizures. As Musk put it, “the neurons are like That hardship turned out to generate wiring, and you kind of need an electronic handsome profits, though: the five thing to solve an electronic problem.” milligrams of the enzyme they initially “We must understand which drug gained would typically have cost affects a given channel and how exactly that happens. We can make forecasts accordingly,” adds Csanády. “Since we are doing basic research, our purpose is to get from their supplier, whereas they spent just HUF 500,000 to buy not necessarily to develop a particular equipment. And the cow heart? You drug but rather to make advancements can get a kilo for HUF 2,000. “Now we in understanding the molecular have made so much enzyme from three strategies that can be exploited to hearts that it is worth HUF 100 mln,” develop such drugs.” Csanády says. This process is rushing ahead at Since HCEMM’s operation relies high speed. Research teams around on grants, the existence of a research the globe are working on revealing the roadmap is self-evident. But research secrets of ion channels. At HCEMM, is not a genre where pre-written scripts there are many opportunities to rule, a fact with which Csanády is happy. forge close relationships with foreign “Of course, we start out in a certain colleagues. Cross-border collaboration direction, but interim results give us is further enhanced thanks to the hints of which way to go. It’s an eternal center’s partnership with the European ‘work in progress’ thing.” Molecular Biology Laboratory (EMBL), which grants access to EMBL facilities, administrative support and joint research activities. László Csanády was honored HCEMM creates collaborative with the prestigious Széchenyi agreements with academic and industrial Award earlier this year, the partners on a case-by-case basis to highest state-level recognition ensure that the arrangements are tailored for top research performance. to the particular needs of each partner. Other award winners included The center is conducting research and Biontech researcher Katalin development with a specific focus on Karikó, famous for her part in aging-related diseases, metabolic and developing mRNA vaccines, and cardiovascular diseases among them. cardiologist Béla Merkely, the That’s where Csanády’s effort rector of Semmelweis University. ties in, and he works with a team of eight. “Our team members are

HUF 20 million

Biologist László Csanády “We aim to impact these channels since over- or under-functioning both lead to disease conditions. For an increasing number of channels, the ‘gates’ can be opened or closed externally; that is, they can be stimulated or blocked by medical treatment,” explains Csanády.

Electronic Problem

The ions in question are electrically charged, and the electric characteristics of cells are established as a result of

www.bbj.hu

Budapest Business Journal | December 3 – December 16, 2021

Special Report Northern Irishman Brings Writings of Miklós Bánffy to International Audience

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Christmas News in Brief

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Euronics Stockpiling Early for Christmas

16

Christmas Gift Suggestions

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Christmas Shopping

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Budapest Business Journal | December 3 – December 16, 2021

Special Report | 13

Graphic by Lauritta / Shutterstock.com

For years, Black Friday was a much anticipated and mass-marketed period of the year for retailers. Time and again, it has brought increasingly higher sales and new customers. Discounts were not so significant as in the United States, but the promotion was ideal for buying Christmas presents at lower prices, while there was still enough time to return the products and pick others, if necessary. Logistics got better, and stocks were sufficient to satisfy more clients with low-priced products. The pandemic brought this frenetic trend to a halt. Many shoppers lost their jobs, and there were fears they would spend less, and the supply chain from Asia to Europe narrowed significantly, which made accurate forecasts in the retail sector hard this year. It was not all bad news on the customer spending side, though; indeed, outlooks were promising. According to data released by the Central Statistical Office (KSH), the average net salary per month in Hungary in September was HUF 293,400 with state benefits, around EUR 830, and a 9% increase compared to the previous year. Inflation in September was 4.4% year-on-year.

Purchasing Power

A more accurate picture of the spending possibilities is outlined in the GfK Purchasing Power Europe 2021 study. Purchasing power is a measure of disposable income after the deduction of taxes and including any received state benefits. The study indicates purchasing power levels per person per year in euros and is based on the population’s nominal disposable income, not adjusted for inflation. The European average is EUR 15,055 per capita. The highest figures were registered in Liechtenstein, Switzerland

Best Sellers

Sales barely grew 5% both in terms of the items sold and turnover, while customers spent significantly more compared to the previous year, which means that they concentrated on products they needed, rather than those that were expensive. The “most sold” top list by categories is relevant: 1. Household items and cleaning products: 79,000 pcs 2. Childcare and toys: 57,000 pcs 3. Laptops and other IT products: 34,000 pcs 4. Small household appliances: 28,000 pcs TV sets, consumer electronics, smartphones and wearables ranked lower in sales compared to previous years.

and Luxembourg, at above EUR 35,000. At the tail end is Ukraine, with a purchasing power of only EUR 1,892 per person per year. Among the 42 countries surveyed, Hungary ranks 30th, the same as last year, with a purchasing power of EUR 7,643 (EUR 636 per month). Compared to this, the Czech Republic and Poland performed better, with EUR 10,667 and EUR 8,294 respectively. Romania ranked immediately behind Hungary, with EUR 7,453. It is worth noting that the figures above are medians, and regional disparities can be very broad within countries. For example, in the Czech Republic, the difference between the region with the highest purchasing power (the capital city of Prague) and the lowest is EUR 5,000. In Poland the difference is EUR 8,000, in Romania, it is no less than EUR 9,600. In Hungary, the difference is less dramatic, at EUR 3,800. On the other hand, the strongest region in Hungary, according to purchasing power (Budapest, at EUR 9,722), is much lower than the regional peers.

The Predictions

So, the average net salary per month in Hungary in September was HUF 293,400 (according to KSH), while the average purchasing power per person per month in Hungary is about HUF 225,780 (so says GfK). As expected, countless pieces of markets research and polls had attempted to predict how much of this Hungarians were prepared to spend and whether Black Friday would continue to be attractive this year.

Here are some of those predictions and findings: • Spending will be somewhat higher than last year, HUF 59,000 (Telenor);

• While the majority of Hungarians are

price sensitive, only 20% indicated that Black Friday would be important for buying the Christmas presents (Impetus Research); • The peak of Black Friday popularity in Hungary was in 2017. Last year, many respondents said they would not participate in the promotion for various reasons: 13% did not need anything, 37% found the price cuts unattractive, and 19% were not interested in the products discounted (picodi.com); • This year customers will spend more than HUF 60,000 on Christmas presents, on average for seven persons, up from five last year (GKI Digital/arukereso.hu).

By now, all retailers have closed their Black Friday promotions, and we are able to look at the figures. Online retailers Extreme Digital and eMAG merged in 2019 but held Black Fridays separately until last year. The average spending per person in 2020 was HUF 34,000 on eMAG and HUF 40,000 on Extreme Digital. This year, the two companies held a joint promotion on the eMAG platform. Looking at the forecasts above, the retailers adopted a more cautious approach of a focused sale, together with a unified stock and logistics. It seems that the strategy worked, but the growth was probably not at the expected rate.

Items sold Turnover (HUF) Orders placed Average value per order (HUF)

2020*

2021

399,000

420,000

9.5 bln 10.13 bln 214,000

166,000

40,000

61,000

*Extreme Digital and eMAG cumulated

We began this article with a regional comparison of purchasing powers, noting that the Hungarian average is slightly above Romania’s. For a more detailed picture, it is worth comparing the Black Friday sales at eMAG, a company that runs businesses in both countries. For better understanding, we have converted values in RON into HUF. While the exchange rates change daily, the differences are noticeable. 2021 2021 eMAG eMAG Hungary Romania Items sold

420,000

2.2 mln

Turnover (HUF)

10.13 bln

44.4 bln

Orders placed

166,000

no data

61,000

80,000

Average value per order (HUF)

The best sellers in Romania were: 1. Household items and cleaning products. 2. Beauty and self-care. 3. Alcoholic beverages and coffee. 4. Small household appliances. Like Hungary, TV sets and smartphones ranked lower, with laptops and IT products not even in the top 10 list. So, why are the differences in sales so much higher, both in volume and value, between Romania and Hungary if the purchasing power is higher in the latter country? The answer lies in the irrelevance of the median figures. In Hungary, the highest purchasing power by region is in Budapest at EUR 9,722. However, in Romania, there are five counties with purchasing power at this level or higher. To conclude, this year’s Black Friday sales were better than forecast in the polls, but not significantly so. Attention will now switch to the Christmas season proper and the hope, for bricks and mortar retailers especially, that shops can remain open.

14 | 3

Special Report

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Budapest Business Journal | December 3 – December 16, 2021

Northern Irishman Brings Writings of Miklós Bánffy to International Audience Miklós Bánffy was, as they say in the vernacular burokban született in 1873 with a silver spoon in his mouth (although the more literal translation is “born in a sheath”), and with a glittering career beckoning. He became an MP, director of the Hungarian Opera, a playwright, author and even an international negotiator. But after a life enduring border changes, wars and political upheavals, he died a pauper in Budapest in 1950. Today, Bánffy and his works are little known even among Hungarians, less still among foreigners: Northern Irishman Thomas Sneddon has set out to change that. KESTER EDDY

Anyone who has even dabbled with learning Hungarian will appreciate “An Oratorical Triumph,” a story of little more than two pages by Bánffy, in which he recounts the struggle of Archduke Karl Ludwig, the younger brother of Austro-Hungarian Emperor Franz Joseph, to address an audience in Nagyvárad (today’s Oradea, in Romania) in the early 1880s. The Archduke was on an inspection of the Empire’s Red Cross offices and had taken the train, replete with his personal royal carriage, from Budapest to Transylvania. He was accompanied by Gyula Károlyi, a senior figure in Hungarian society and father of a future prime minister, Mihály Károlyi.

volumes, including “The Monkey and Other Stories.” It is from this collection of tales, written across Bánffy’s entire life, that the delightful story of the Archduke’s verbal stumblings originates. It is also the example that Sneddon chose to read to his audience at the book launch in mid-summer. A number in the collection offer vignettes into long-forgotten aspects of life, surely based on real events and the daily hardships and cruelties affecting common people in AustroHungary more than 100 years ago. Others, such as “Danse Macabre,” in which a romantic young nobleman falls hopelessly in love and has secret, if innocent, trysts with Queen MarieAntoinette in Versailles, presumably stray well into fiction (even if they are deeply perceptive of the cringe-worthy grovellings of courtiers).

Kindly Presence

Sometime after their departure, the Archduke invited Károlyi into his carriage. The Archbishop of Nagyvárad had sent across not only his welcoming speech but also his suggested reply for the Archduke, all in advance and all in the Magyar tongue. But there was a snag, as the Habsburg Royal ruefully had to admit (in German): his Hungarian was, well, rather rusty, so would Károlyi edit and simplify the response a bit, please? As he worked through the cuts and consulted, the bit soon became a chunk, then a big chunk until, finally, it was whittled down to just one sentence. This read: “I am delighted to be here and have been greatly heartened by the things I have seen during the inspection,” the last word coming out as a tapasztaltakkal in Hungarian. The Archduke was exceedingly pleased with this much-abbreviated version. But, perhaps wearied by the mental exertion, perhaps lulled into slumber by the swaying of the carriage, it would seem he was loathe to practice it. After their arrival, the inspection and subsequent sumptuous banquet, the moment of delivery was nigh; the Archduke rose and took the paper with the shortened speech from his pocket. “I am delighted to be here,” he read, “and have been greatly heartened by the things I have seen during the tapa ... the tapastapala … the pastapala...”

Sensing the difficulty their esteemed guest was having, the audience came to the rescue with a loud cheer and enthusiastic applause. Despite (or perhaps because of ) this linguistic hiccup, it seemed everyone was happy, and an impromptu procession accompanied the Archduke and Károlyi to the station for the next leg of their trip. But Károlyi was very uneasy: there had very, very nearly been a royal embarrassment, and, sitting alone in his compartment, he cursed his thoughtlessness at leaving such a difficult word as tapasztaltakkal in the Archduke’s speech. Then, but a few miles into the journey, a servant informed him that the Archduke would like to see him in his carriage. Károlyi set off with a heavy heart, fully expecting a very Habsburg dressing down. Yet, he was mistaken. “I wanted to thank you, Count Károlyi, for your wonderful little speech,” the Archduke smiled in greeting. “That tricky word, in particular, seems to have hit the spot!… That tapalapa… talapatata… Oh, you know the one I mean! Absolute gem of a word!” Thomas Sneddon is fascinated, almost enchanted by Bánffy’s writings, an enchantment that inspired him to begin translating the Transylvanian Count’s works in a project that has resulted in two pocket-book

“I’ve always had this sense with Bánffy of a kind of a [….] he’s a kindly presence on the page, someone who wasn’t out to do his characters down for some ideological reason. There is a kind of willingness to be fair,” says Sneddon. The second translation, “The Remarkable Mrs. Anderson,” is a rampaging novel of fiction about the theft of a priceless Leonardo painting from the Budapest Museum of Fine Arts and the baddies’ efforts to escape with the artwork in the boot of their car around Italy, with only reporter Milla Anderson (not the police) hot on their heels. “I really enjoyed translating this. It’s a very fun read, though it has no pretensions of being a grand literary classic. It’s a kind of adventure story. I think it would work very well as a four-part TV series; it has the flow of television. It’s very nice, but it’s not particularly deep or meaningful,” Sneddon told the Budapest Business Journal. Both volumes are published by Blue Danube/Somerset Books, and both sport intriguing covers (“Anderson” a 1930s Italian travel poster, “The Monkey,” an 18th-century screen in the John Paul Getty Museum, Los Angeles.) “The design of the books, cover artwork and choice of paper kept me up at nights, so I’m glad you like the look of them. I think they’re a really nice size,” editor Annabel Barber told the BBJ after the launch. When last checked, Best Sellers was offering both books at a 10% discount, retailing at HUF 5,940 apiece.

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Budapest Business Journal | December 3 – December 16, 2021

Christmas Tree Price to Rise 10-20% This Year The price of Christmas trees in Hungary could rise 10-20% this year, lifted by higher transport and labor costs, the Hungarian Ornamental Horticulturist Association said on November 23. Because of the weaker forint, the price of the imported Nordmann fir, the most popular tree in Hungary, is expected to climb by as much as 20% to HUF 7,000-8,000 per meter. Spruce trees are expected to sell for HUF 4,000-5,000 per meter and blue spruce for HUF 5,0006,000 per meter. Hungarians purchase some 1.8-2 million Christmas trees around the holidays, including 500,000-600,000 Nordmann firs, mainly from Denmark.

Young Families Club Holding Advent Charity Event Online For the sixth time, the Young Families Club (Ficsak) is organizing a charity advent fair for family organizations, the proceeds of which will be used to support Lea Home’s Temporary Home for Families, Minister for

Family and Youth Affairs Katalin Novák said on Facebook on November 23. Novák noted in her video message that more than 30 family organizations are participating in the collection, all of which consider it necessary to think not only of the families belonging to their organizations but also of all Hungarian families as Christmas approaches. Ficsak started the charity event six years ago and has been organizing it ever since, selling homemade gifts and supporting good causes with the proceeds, the minister recalled, adding that the charity Advent fair will be held online this year.

Food Bank Association Collects 348 Tonnes of Food Some 348 tonnes of durable food was collected in the Christmas fundraising campaign of the Hungarian Food Bank Association over the weekend of November 20-21, writes profitline.hu. Some 6,500 volunteers helped with the collection in 315 stores in 160 settlements across the country. The Food Bank will be delivering food to those in need in the coming weeks through 300 charities across the country.

Holiday Candy Sales to Decline in Volume, Rise in Value Hungarian candy manufacturers expect holiday candy sales to decline in volume but rise in value terms this year, daily Magyar Nemzet (Hungarian Nation) said on November 24. Sales of chocolate figures are expected to reach eight million, and sales of the traditional chocolate-coated sweets (szaloncukor) used to decorate Christmas trees to 3,500 tonnes. In value terms, total sales in December are projected at HUF 50 billion. In recent years, demand has shifted towards higher-quality products, Gábor Intody, secretary-general of the Association of Hungarian Confectionery Manufacturers, told the paper. Many people prefer

A total of 70,000 people will benefit from the food gift, mainly those with large families, the elderly, people with disabilities, the homeless, residents of children’s homes, and carers from other social institutions.

Budapest Opens Christmas Markets The Budapest Advent and Christmas Fair opened on November 19 in Vörösmarty Square, profitline.hu reports. “It is with

better-quality desserts, with unique sweets, organic and vegan products becoming more popular. Most consumers, however, keep to traditional flavors, he added. The paper said that the price of sweets is expected to rise as raw material prices and almost all other production costs have increased. Photo by Krisztian Tefner /Shutterstock.com

News///in brief Christmas

Special Report | 15

great pleasure that, even within limits, the epidemiological situation allows us to hold the traditional Christmas market. The Metropolitan Municipality has been organizing it every year since 1998, which was unfortunately interrupted last year because of the pandemic,” said Erzsébet Gy. Németh, deputy mayor for humanities, who opened the event. She explained that the Budapest Christmas fair is cordoned off this year, and the event can only be attended by presenting a COVID immunity card.

252x158_Conti_xmas2021_ok.indd 1

2021. 11. 25. 11:05

16 | 3

Special Report

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Budapest Business Journal | December 3 – December 16, 2021

Euronics Stockpiling Early for Christmas Christmas this year may be merrier than 12 months ago when many were separated from their families due to the pandemic. Yet, it is also likely to be less generous as supply chain disruptions make it harder to buy presents. Traditionally, the run-up to Christmas and Black Friday (increasingly morphing into Black Week) are the busiest periods for retailers and the most lucrative. ZSÓFIA VÉGH

“We generate roughly a third of our revenues between Black Friday and Christmas,” Bálint Fazekas, head of sales at Euronics, tells the Budapest Business Journal. November is primarily about online shopping, gradually transitioning to offline through December. The pandemic slightly changed that dynamic, though; last year, Euronics saw a 40% increase online, which had slowed down to 20% by 2021. The increase is not unique: since the coronavirus outbreak, online traffic at webshops in Hungary rose

43%

on average, according to a survey by Shoprenter. This spike in demand following the relaxation in restrictions and the ensuing shortage of parts and products has caused problems in the supply chain and thus delays in shipping. As a result, some

collected from easybox vending machines available at nearly

420

locations

nationwide. With the number of infections increasing, contactless pick-up is becoming more prevalent. Products ordered on Black Friday will be shipped by eMAG within a maximum of 14 days from Dec. 3, 2021. The retailer notes that the situation may have improved compared to last year, but there are still minimal stocks of PlayStation 5 and Xbox Series X consoles available. If you want such a set, it is worth booking it, as subscribers will be notified when they become available, the group advises. “The global chip shortage is a real phenomenon; its effects can be felt here as well. Fortunately, as the largest player in the Hungarian market, we are fairly on the top of the manufacturers’ list so that we can order quite large quantities. We don’t expect a general product shortage this season, at most a temporary unavailability of a single model,” eMag and Extreme Digital write. (For more on eMag and Extreme Digital’s 2021 Black Friday sales, see “Black Friday Sales: Barely Better” on page 13.)

Bálint Fazekas The online assortment is extensive, bestselling products won’t be available this Christmas, or only in limited stock. but the inventory is limited, while shops feature fewer products in larger Black Friday and Christmas are tied in stocks. Delays in supply chains that many people try to buy Christmas affect everything, including prices. presents in November. Therefore, ever Heightened demand paired with low more retailers, including Euronics, have decided to extend this period so as not to stocks plus rising inflation leads to higher prices. overburden the system. “We saw the biggest increase in “We usually ship products within 1-3 the price of televisions,” Fazekas days of ordering; we have the stocks in physical shops and warehouses,” Fazekas explains. But he says Euronics has not increased its prices. “Our profit explains. The chain has 40,000 square margins will be lower, but we meters of warehouse capacity. decided against a price hike.” Starting Earlier Even so, there will be products To avoid shortages, it starts to that will be less readily available. stockpile goods in the quarter before The company will try to counter these busy periods and even, in the potential shortages by offering case of big white household appliances, similar goods. half a year earlier. Contactless Pick-up “This year, we started preparations Due to delays in international much earlier and accumulated stocks shipping, there will be a temporary to the maximum. We are confident that shortage of the most popular we are not going to face any shortages; mobile phones and IT products, we have reliable partners and store eMag and Extreme Digital says. inventories are Following the completion of the merger between the two, larger eMag and Extreme Digital hosted than they were a year ago,” Fazekas a joint Black Friday for the first says. He adds that the retailer will need time this year which took place to increase warehouse space in line with entirely on the eMAG platform. increasing online shopping demand. The group said it expects about Online and bricks and mortar 30% of this year’s Black Friday shops follow different strategies. orders requested at eMAG to be

25%

“This year, we started preparations much earlier and accumulated stocks to the maximum. We are confident that we are not going to face any shortages; we have reliable partners and store inventories are 25% larger than they were a year ago.” The shortage of video cards is already tangible and is gradually spiraling into laptops with better graphics units. “Video cards are almost impossible to get hold of, and if even we do, retailers will charge two or three times the normal price,” refurbished IT products company Furbify quotes computer expert Péter Tóth as saying. “The shortage in the segment is so severe thanks in part to the cryptocurrency miners; they would buy the cards no matter the price,” he adds. The same is true in the console market, the demand is enormous, and customers have to wait months to get a gaming machine. Due to the lack of inventory, the price increase is spiraling into the notebook market as well, the expert warns.

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Budapest Business Journal | December 3 – December 16, 2021

Special Report | 17

Meet FOREO LUNA™ 3 MEN

Vagheggi

The facial cleansing tool that takes care of your skin, so you don’t have to. Featuring gentle yet firm silicone touchpoints and T-Sonic™ technology, LUNA™ 3 MEN cleans and conditions your skin and beard, removing the grime of the day from your face in just one minute, while a targeted firming facial massage reduces the appearance of fine lines, so your skin looks toned and energized. www.notino.hu

The Atypical phytocosmetics range has been developed explicitly for skin exposed to urban pollution, which accelerates skin aging by up to 20% due to collagen loss. It is also especially effective in skin exposed to blue light pollution associated with a hyperconnected lifestyle, which creates oxidative stress. The product’s main ingredient is hemp, a plant used since time immemorial. The seeds of the plant contain a precious active ingredient that positively modulates the skin’s microbiota, soothing the skin, boosting hydration, and improving elasticity. Research and innovation have extended to the packaging, which uses recycled paper made from hemp fibers. www.vagheggi.hu/category/ show/atypical-91

Goodbye Dark Spots, Hello Luminous Skin

s.Oliver Pure Sense for Him

Wellis Feel the sense of nature in your bathroom! Fall in love with one of our freestanding bathtubs, choose from a wide variety of shower cabins, or make your home perfect with a Finnish sauna! Find our products at our partners all over the country! wellis.com

Know Someone who Loves the Tub? Send them to the bath with this gift full of fizzing orbs. “Snow Fairy” grants the sweetest swishes, while “You Shall Go To The Ball” dances the night away under strawberry-scented pink and white swirls. To end the night, “Twilight” lets them sink underneath a blanket of stars and lavender-tonkascented waters that would make anyone feel sleepy. www.lush.com/hu/hu

We’re always looking for something real, something pure, something that doesn’t distract us from ourselves but emphasizes our personality. This is also true of our perfume: the familiar notes of crisp apple, bitter grapefruit and orange create a dynamic opening, then move into a clean heart of juniper and oakmoss. All of this leads to pure masculinity, characterized by the unmistakable, authentic scent of cedar and sandalwood. A natural fragrance that embodies vitality and virility!

New Cellular LUMINOUS630 Anti Dark Spot is NIVEA’s breakthrough dark spot treatment that works with your skin for visible results in four weeks. The serum combines the breakthrough ingredient LUMINOUS630 in its highest concentration with vitamin E and cellactivating hyaluronic acid (in-vitro). The Day Fluid protects existing spots from getting darker and prevents their reappearance. It also prevents photoaging while moisturizing the skin. www.nivea.hu

Xplora X5 Play: A Smartwatch you can Call Them On This is a clever little piece of tech which not only makes the perfect Christmas gift for kids aged 4-11; it gives parents peace of mind too. It’s a smartwatch for kids that allows the wearer to make and receive calls, send text messages, emojis, and pictures to up to 50 pre-agreed contacts. You can also use it to locate your child and create Safe Zones, which will alert you whenever your child leaves or enters the zone. Kids can track their steps to earn prize incentives through the Xplora Goplay platform, which encourages children to be more physically active. Xplora X5 Play is available in black, blue or pink. www.telekom.hu

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Budapest Business Journal | December 3 – December 16, 2021

Socialite János Bródy: The Singer Poking the eye of the Establishment I would never have heard of Hungarian singer-songwriter János Bródy if someone hadn’t drawn it to my attention that he is celebrating his 75th birthday this year. DAVID HOLZER

Bródy is a revered artist in this country. As someone put it to me, “Ask any Hungarian, especially over the age of 40, about Bródy and his career as a bandleader and solo artist, as well as his stage musicals, particularly ‘István, a király’ (Stephen, the King). It’s like asking any grey-haired Brit or American about The Rolling Stones or Crosby, Stills & Nash.” I would guess, though, that Bródy is all but completely unknown outside Hungary. He also sings and writes only in Hungarian, which, with the best will in the world, doesn’t help. Bródy was born in 1946 in Budapest. He joined the band Illés (Elijah) in 1964 as a singer. Judging by the cuts collected on the 2005 compilation “Nehéz az út” (The Road is Hard), he was pretty good. I don’t know what he’s singing about, but the music ranges from sophisticated psychedelic stuff with adept playing and smooth harmonies like “Sárga rózsa” (Yellow Rose) to the belting “Little Richard.” It being the 1960s, Illes’ music was influenced by bands like the Beatles and the Stones. By 1967, Bródy was writing his own lyrics. Like Dylan or Lennon and McCartney, he wrote in code. But, where they were mainly writing about drugs and sex, Bródy was secretly criticizing the Hungarian communist regime. He has never stopped making his music from a position of opposition to whoever is in power in Hungary. The ambiguity of Bródy’s lyrics helped make Illés’ gigs an outlet for implicit protest by the band’s fans. But their popularity put them into a

Hungarian songwriter and singer János Bródy (right) with German-Hungarian musician Leslie Mandoki at a press conference in Budapest Park on July 13, 2017. File photo by posztos / Shutterstock.com

“I like his lyrics very much. He uses simple words in a beautiful way. As a performer, he’s charming but also humble. My mother loves him too; she was a fan in the 1960s. When we listen to his music together, we’re not a daughter and mother. We feel the same age: we are both young. This is the power of Bródy’s music.” musical straitjacket. By the early 1970s, they were experimenting with mixing Hungarian folk and rock and roll, but their fans demanded less challenging stuff.

Police Baiting

Bródy continued speaking out. At an event in Diósgyőr (186 km northeast of Budapest) in 1973, he said from the stage (and I’m translating roughly, here): “We also wish to thank the police forces. Many of you came here yesterday from Miskolc and couldn’t

sleep anywhere. For them, the police provided shelter, even if it was not as comfortable as the bed at home, and let them out this morning, asking them if they slept well and wishing them fun for tonight.” The resultant fine and one-month ban from performing caused Illés to begin to fall apart. After they folded later in 1973, Bródy started the band Fonográf with some former members of Illes and new blood. I’ve only listened to 1978’s “Útközben” (On the Way), which is competently played rock and roll with an Eagles country-rock influence on some cuts. Bródy’s lyrics were as inflammatory as ever, and Fonográf was heavily censored by the communists. The 1973 album “Jelbeszéd” (Sign Language), made by Fonográf collaborator Zsuzsa Koncz, written by Bródy, was taken out of stores and destroyed. Despite this, you can find “Jelbeszéd” online; it was re-released in 2002, and it’s well worth the listening. Koncz has a powerful, pure voice with a tone that I think of as particularly Hungarian. Like Bródy, she is an icon in Hungary. “Sign Language” is a particularly adept way of describing what Bródy has always done: send coded signals to his audience. In 1980, he released his first solo album, “Hungarian Blues.” As time went on, his writing has increasingly expressed disappointment with life

in newly democratic Hungary, with lyrics sung in a seasoned, somewhat world-weary voice to an often wistful musical backing.

Fulfilled Disappointment

He has continued to record albums and give performances as well as write plays. In true Hungarian style – and again, this is a rough translation of the words on his website – he performs “with an ironic smile, offering a short, temporary happiness between hopeless love and fulfilled disappointment, consoling the unrealized dream.” Bródy’s solo albums have all gone gold or platinum in Hungary. He’s also published several books of his lyrics which have sold well. In 2001, the singer-songwriter was diagnosed with cancer and had a kidney removed. Fortunately, he was able to continue making and performing his art. After listening to his latest album, 2020’s “Gáz van, babám!” (There’s Trouble, Baby!), I still struggle to warm to the music, but I do wish I could understand what he’s singing about. This is particularly the case with his 1984 recording of the song “Ha én rózsa volnék” (If I Were a Rose), an anthem for Hungarians who came of age in the 1960s. Alongside the new album, Bródy is releasing another book of his lyrics, “Saját hangon” (In my own Voice). Researching this article, I asked a fan who saw him a few times in the 1980s and 1990s what she felt about him. She said, “I like his lyrics very much. He uses simple words in a beautiful way. As a performer, he’s charming but also humble. My mother loves him too; she was a fan in the 1960s. When we listen to his music together, we’re not a daughter and mother. We feel the same age: we are both young. This is the power of Bródy’s music.”

I asked my friend László Kovács, of Hungarian reissue label Moiras Records, for his suggestions on where to start with Bródy. He recommended: 1. Illés, “Goodbye London” 2. Fonográf, “Hunyd le a szemed” (Close Your Eyes) 3. Bródy, “Földvár felé félúton” (Halfway to Földvár) 4. Brody, “Ha én rózsa volnék” (If I Were a Rose) 5. Brody, “Ne szólj szám” (Don’t say numbers) Moiras is a great place to start if you are interested in getting to grips with Hungarian popular music. Find out more at www.moiras.somoskiado.hu.

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Budapest Business Journal | December 3 – December 16, 2021

Socialite | 19

Pleasant Surprises at the Bordeaux Grand Tasting Out of a sea of predominantly turbo-charged tannic wines made from the Bordeaux varieties at the Winelovers’ Bordói November Nagykóstoló (Grand Tasting), held on November 20 at the Corinthia Hotel Budapest, came a most welcome wine to savor and also soothe palate fatigue. ROBERT SMYTH

From the Balatonboglár wine region on the southern side of Central Europe’s largest lake, Bujdosó Libás újbor (new wine) 2021 is made in the same way as Beaujolais, via a process known as semi-carbonic maceration. However, Ferkó Bujdosó, the young and much-traveled winemaker, learned the method during a stint working in New Zealand for the famous Matua winery, using the Pinot Noir grape. The grapes are put into an open-topped tank, as whole bunches with the stalks attached, then start macerating (softening and breaking apart). The grapes at the top undergo intracellular fermentation, whereby the fermentation kickstarts inside the grapes, as carbonic gas takes up the space previously occupied by the oxygen from the air. The middle part now macerates, while the grapes at the bottom get compacted and give out juice. The yeasts naturally inherent in the grapes start to ferment the sugars in what is regular alcoholic fermentation. The overall result is a wine that is extremely fruit-forward and very light on tannins. Bujdosó Libás újbor 2021 uses the Cabernet Franc grape variety and to great effect. It positively oozes zesty, primary flavors of raspberries, blueberries and blackberries, and is remarkably comparable to a good Beaujolais Nouveau in style and quality. It is light and very fresh but has plenty of fruit to wrap around your tastebuds, without the bite of tannins that comes with fuller-bodied red wines, thanks to that semi-carbonic maceration process. It

is a bargain for HUF 1,600 from bujdosó. hu. Incidentally, Bujdosó’s big reds have also been showing more of a refined, silky touch since Ferkó Bujdosó has brought home his experiences from making wine in several important foreign wine regions.

Memorable Wines

Tasting full-bodied, tannic reds for six hours can be challenging, but some wines certainly stuck out as memorable at the Bordeau November Grand Tasting. Despite the Pannonhalma wine region’s relatively cool climate in the northwest of Hungary, the Pannonhalmi Főapátság (archabbey) makes what is for me one of the most impressive Bordeaux-style blends in Hungary. Infusio is an intense, concentrated and full-bodied wine that nevertheless has a welcome cool, zesty streak running through it. It hails from a plateau on the south-facing Babszökő vineyard, which has brown woodland soil with red clay. The limited-edition Infusio 2019 has more Cabernet Franc (40%) than usual, with Merlot contributing 60%. It is very elegant with minty aromas that beautifully complement the intense black and red fruit, with sleek tannins and an extremely long, delicious finish. The high alcohol of 15% is nicely integrated and does not bring any burn. It costs HUF 8,950 from Bortársaság and apatsagipinceszet.hu. The 2018 Infusio claimed the eighth spot in the 2021 edition of “Winelovers 100 legjobb Magyar Bor” (100 best Hungarian wines) and was the highest placed blend of Bordeaux varieties in the listing, although three single varietal

25th Annual Budapest Burns Supper 22 January 2022

Cabernet Francs, at which Hungary excels, came in above it; the highestrated, Vesztergombi Pince’s 2017, came in third position overall. Taking my long-kept (and long soldout) bottle of Infusio’s 2016 vintage to a blind tasting of a dozen premium Bordeaux blends, including some heavyweight bottlings from Bordeaux itself, it was placed third, behind two French heavyweights. It had aged beautifully, with delightful finegrained tannins and Christmas spices from the beautifully integrated oak, complementing the soft black fruit. In the buildup to this big new Infusio, the 2020 Pannonhalmi Tricolis rosé, a blend of 50% Merlot, 30% Pinot Noir (how did some of this Burgundian grape make it into a Bordeaux tasting?) and 20% Cabernet Franc, is in great shape. It has rounded out and has a delightful salmon color, with lots of juicy red fruit on the nose and palate.

Killer Cab

From Szekszárd, the Eszterbauer Borászat is a great exponent of Bordeaux blends and also makes a killer single-varietal Cabernet Sauvignon, called Tivald, the 2017 of which has won so many medals that they hardly fit on the bottle. Meanwhile, its Mesterünk 2017 (ranked 59 in the Winelovers 100 best list), a blend of Cabernet Franc and Merlot, tastes lovely

at the moment, with a pleasing earthiness and spiciness, beside the plentiful fruit, bringing nice complexity. For a big wine with a local touch, Eszterbauer’s soon to be released Grand Vin 2017 sees Kékfrankos playing a pivotal role, along with the Bordeaux varieties of Cabernet Franc, Cabernet Sauvignon and Merlot, and brings a delightful degree of freshness and lightness of touch to the otherwise full-on party. Meanwhile, from Villány, Gere’s Kopár is a long-established favorite on the local market and has been all the better since Cabernet Franc was handed the starring role, with Merlot and Cabernet Sauvignon supporting. The 2017 vintage (HUF 8,750 from Bortársaság) was aged in 300-liter Zemplén oak barrels, which bring a complex touch of tobacco that adds an extra dimension to the layers of blueberry, blackberry and blackcurrant). This year, the Mitiszol? (What are you drinking?) tasting, which features organic, biodynamic and natural wines, was not held due to COVID. Instead, Chef Market, the brand’s owner, arranged minitastings for press and gastro partners. From Villány, the Wassman winery’s Mundia 2018 is a blend of Cabernet Franc and Kékfrankos and is a natural wine that received no added sulfur and was neither filtered nor fined. It has an appealing purple color, with aromas of violets, blueberries and black pepper, followed by a vibrant, juicy palate. This is a natural wine to get excited about, one in which everything turned out right. It is also a bargain at HUF 3,299 from chefmarket.hu. Another great deal from the tasting is Pelle Pince’s organic Birtok Furmint 2018 (HUF 2,799 from chefmarket.hu), one of my go-to Furmints from Tokaj oozing quince and briny minerality. It was made solely in the tank, which keeps its varietal purity. The winemaker is Dénes Szarka, who also has his own Tokaj cellar, and showed he also has the Midas touch with botrytized sweet wine, with Szarka Pince’s Tokaji Aszú 6 puttonyos 2017 claiming the number one spot in Winelovers 100 list.