Budapest Business Journal 3022

Christmas Shopping

Copious Dishes and ‘Brutal’ Prices at Christmas Fairs

During winter, some of Budapest’s squares become even more stunning when Christmas fairs open. This year they are more welcome than usual, following two years of pandemic restrictions. Prices, however, are likely to be prohibitive for many locals.  14

Black Friday: Will December be Better?

Black Friday was unpredictable. Customers were told to expect maximum discounts of 20%, while inflation in October was 21.1%, meaning those who could take advantage of the rates could buy at last year’s prices, at best.  16

Finding a way Forward

Christmas Shopping in Budapest: It’s not About the Shopping

There are two ways to approach Christmas shopping in Budapest. You can plan as if it were a military exercise and get in and out as fast as possible. Or you can treat the process as a thoroughly enjoyable way to spend a day. David Holzer opts for the latter.  21

Investments Galore, but Recession Seems Unavoidable

The volume of investments in Hungary continued to increase in Q3. Analysts expect this positive tendency to continue in 2023; however, the overall economic situation does not look too rosy in the near future.  3

László Károlyi, chairman of the French-Hungarian Chamber of Commerce and Industry, and executive director Ágnes Ducrot, discuss steps the chamber is taking to help members cope with the economic crisis. 10

BUSINESS

Air France-KLM GM: ‘Look Beyond Price, Focus on Choice’

In August 2022, Bas ‘t Hooft, general manager of Alps and Central Europe for Air France-KLM, touched down in Budapest with his family to live. We discusses his impressions of Budapest and Hungary and his thoughts on aviation and its future.  9

EDITOR-IN-CHIEF: Robin Marshall

EDITORIAL CONTRIBUTORS: Balázs Barabás, Zsófia Czifra, Kester Eddy, Bence Gaál, Gergely Herpai, David Holzer, Christian Keszthelyi, Gary J. Morrell, Nicholas Pongratz, Robert Smyth.

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Address: Madách Trade Center 1075 Budapest, Madách Imre út 13-14, Building B, 7th floor. Telephone +36 (1) 398-0344, Fax +36 (1) 398-0345, www.bbj.hu 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

THE EDITOR SAYS

LIGHTING THE WAY THROUGH ADVENT

November has turned to December. Thanksgiving is already behind us, Advent is with us, and Christmas lies just a few weeks ahead. I don’t know about you, but as I have got older, I have noticed a tendency about myself to arrive at the Festive Season almost unaware. It probably has something to do with the blur of deadlines in the run-up to year-end, and the not-insignificant magical powers of my Time Thieves (known to others as children). In other words, there is just too much to do to take more notice of it, until there is nothing left to do. Not even the ever more irritating, ever earlier appearance of Christmas chocolate Santas in the shops seems able to shock me out of this (it was in early October this year in my local supermarket, by the way, well before Halloween). I did enjoy the outrage of one of my friends who spotted a Christmas tree, complete with lights, in an apartment window in London on November 6. Well, we Scrooges must stick together. Bah, humbug! Except I am not a Scrooge. Well, if I am, it is only partially, and even then, only in the post-ghosts of Christmas sense. Generally speaking, I do try to “honor Christmas in my heart.” I am less keen to “try to keep it all the year.” I would go as far as to say I love Christmas. I especially love Christmas in those 12 days allocated to it. We report on Black Friday in this issue of the Budapest Business Journal. It has been an odd time this year. Inflation is high, energy bills are punitive, and the exchange rate sucks. The pre-publicity warned that

discounts would likely be nearer to 20% off than 80. That combination makes for a hard sell, but it is typical of where we find ourselves in 2022. Driving back from the office late this week, I looked left as I prepared to turn right onto Andrássy út and was struck by the bright lights of the Ferris Wheel of Budapest, gleaming away from its permanent home in Erzsébet tér. The lights seemed to me to be brighter than usual until I realized they had no competition; there are very few of the usual Christmas illuminations on Andrássy, the municipality having reckoned that by not switching on the lights this year, it can save HUF 28 million.

Perhaps the need to make savings this year will offer us a less overtly commercial Christmas. Then again, looking at some of the prices from the Christmas markets, perhaps not. But it would be nice to think we could reconnect with Advent before embarking on the main event. Advent has become swept up in the general swirl of what some will insist on calling the Holidays, but it is to Christmas what Lent is to Easter. At least, that is the intention in the Christian church calendar. It is supposed to be a time of waiting, of preparation. Get it right, and perhaps Christmas won’t catch you unawares. It is way too early to extend Christmas greetings, but it is the perfect time to wish you a Happy Advent.

Robin Marshall Editor-in-chief

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THEN & NOW

Bence Majoros, who eventually won the game and title, plays against Nándor Ecseki in the men’s final of the Hungarian table tennis championship in Budapest, at the Ormai László Table Tennis Hall on November 29. In the black and white image from the Fortepan public archive, gentlemen play ping pong outside somewhere in Budapest in 1940.

Photo by MTI / Tibor Illyés

Photo by Fortepan / Katalin Sattler

• macroscope

Investments Continue, but Recession Seems Unavoidable

National Economic Investments in Hungary (2002-2022 Q1-3)

volume index, the same period of the previous year equals 100

Q I-III

enough to curb inflation, says Trippon. According to the economist, disinflation will be very slow next year, and overall inflation rates will remain high. At the same time, a temporary decline is inevitable in the United States and the eurozone. Global growth is slowing to 1.5%, a fact in which China’s economic problems also play a role. Due to inflationary challenges, the tightening policy of the central banks of developed countries is expected to continue well into

2023.

The Fed’s interest rate hike may peak at around 5%, while the tightening cycle at the European Central Bank might stop at 2.5-3%, according to the CIB analyst.

Source:

ZSÓFIA CZIFRA

The volume of investments increased by 7.7% in the third quarter of 2022, compared to the same period of last year, significantly exceeding expectations and following a 7.8% increase year-onyear in the previous quarter. It grew by 1.9% compared to the previous quarter, according to the latest data released by the Central Statistical Office (KSH).

Construction investments (representing almost two-thirds of the performance value of the total) increased by 10%, and investments in machinery and equipment (accounting for more than one-third of the total) grew by 3.3%. Within machinery, the volume of imported machinery grew while that of domestically produced items decreased, the KSH reported.

Among enterprises with at least 50 employees, cumulatively accounting for 56% of investment output, the volume of developments grew significantly, by 10%, with developments by foreign-owned enterprises playing a prominent role. At budgetary units, which accounted for

11%

of investments, the performance dropped by about one-tenth, the data reveals.

While central government bodies saw their developments decrease significantly, purchases of fixed assets by local governments slightly increased. Investment volume in other categories (enterprises with fewer than 50 employees, private entrepreneurs, non-profit enterprises, as well as households) grew by 9.5%.

Manufacturing contributed the most (by 7.6 percentage points) to the 7.7% volume increase of the national economy’s investments in Q3 2022. Investment activity also grew due to the performance of the real estate, energy, and trade sectors (by 3.2, 1.2, and 0.2 pp, respectively). At the same time, performance decreases in transportation and storage, along with agriculture, held back the volume increase, by 1.1 and 0.3 pp, in each case.

Automotive Dominance

It is not a massive surprise that the investment volume in the manufacturing industry increased, as investments related to battery production and the automotive sector have ruled the domestic market this year.

Approximately 60% of the HUF 4.9 trillion total working capital investment announced was made up of a single project related to the battery market, CATL’s HUF 2.9 tln (EUR 7.3 billion) greenfield development in Debrecen. In addition, at least a further 10 investments worth hundreds of billions of forints have been underway since 2017, a significant part of which is also related to the automotive industry.

SK Innovation has announced a HUF 680 bln investment in Iváncsa, LG Chem and Toray are jointly spending HUF 267 bln in Nyergesújfalu, while Samsung SDI is investing HUF 390 bln in its Göd factory, just to mention a few.

It is also favorable news that BMW has doubled down and increased the total investment amount of its factory in Debrecen to

EUR 2 bln

and that Mercedes has announced another HUF 400 bln and Audi HUF 120 bln in investments, notes Gergely Suppan, head analyst at Magyar Bankholding.

An unprecedented volume of working capital investment has been announced this year, well in excess of HUF 4.9 tln, following last year’s record working capital investment of HUF 2 tln (EUR 5.9 bln), he summarizes.

Thus, the significant expansion of investments in the manufacturing industry could continue, of which capital from the Far East, primarily from South Korea and China, had already become dominant, and Japanese and Indian companies had also announced significant investments, says Suppan.

Recession: Mild or Harsh?

A good year in investment indeed lies ahead, even in a significantly higher interest rate environment, according to CIB Bank senior analyst Marianna Trippon. However, the economy is likely to stagnate next year, paired with a decline in domestic consumption, she warns.

The main question for the global economy in the upcoming period is whether it is possible to get away with a mild recession lasting only a few quarters and whether this will be

The outlook for the Hungarian economy may well be characterized by stagnation in 2023. The inflationary pressure will moderate from the middle of the year, while the labor market situation will deteriorate slightly.

As for the outlook for the Hungarian economy, it may well be characterized by stagnation in 2023. The inflationary pressure will moderate from the middle of the year, while the labor market situation will deteriorate slightly. CIB Bank’s experts expect that the government will reach an agreement with the European Union on areas of dispute over the rule of law and transparency and corruption concerns so that EU funds will be available again next year.

Altogether, CIB Bank’s forecast has deteriorated significantly since May; the economic growth forecast has decreased, while the inflation forecast has increased.

Numbers to Watch in the Coming Weeks

On Monday, December 5, the Central Statistical Office (KSH) will release October’s retail trade data. The first estimate of October industrial production will follow on December 7. The following day, KSH will publish the November inflation figure and also the October data on the external trade in goods.

The volume of investments in Hungary continued to increase in the third quarter of the year. Analysts expect this positive tendency to continue in 2023; however, the overall economic situation does not look too rosy in the near future.

Circular Economy Aims to Halt Biodiversity Loss

These were the key messages of the fifth Circular Economy Summit in Budapest, organized by the Business Council for Sustainable Development in Hungary (BCSDH), ING bank, and the Embassy of the Kingdom of the Netherlands, with nearly 150 people in attendance.

The connection between biodiversity and material management is clear: the circular economy as a form

of system-level change can play a role in halting biodiversity loss. It can create tangible opportunities for businesses as well.

“Companies must be at the forefront of systemic changes. Those who act earlier are apparently less likely to suffer from external effects such as rising energy prices, shortages of raw materials, or disruptions in supply chains,” said Attila Chikán Jr., president of BCSDH, at the event.

“Climate neutrality must be achieved urgently, among other things, through the spread of the circular economy, which the leading companies have already recognized […]; according to this year’s Towards Net Zero research, the use of circular solutions is increasingly coming to the fore,” he noted.

“For the time being, these solutions are mostly seen as new business opportunities alongside pre-existing ‘material-intensive’ processes. But the aim should increasingly be to replace the latter, as this approach can only slow down the use of natural resources,”

BCSDH defines a circular economy thus: “In the current linear economic model, technical and biological components are extracted from nature, transformed, and, after use, treated as waste, much of which is not recycled. In the circular economy model, on the other hand, metabolic processes take place in a closed loop, waste is almost 100% recycled,

Developing Carbon-neutral Buildings in Hungary

The Hungarian Green Building Council (HuGBC) has agreed to cooperate with the Turkish Green Building Council in training and education to achieve carbonfree buildings by 2050, as is the stated aim of the World Green Building Council. Similar agreements will be signed with the Kenya and South Korea counterparts.

“Net zero carbon buildings are as yet very rare in the CEE region; however, of course, the knowledge and the knowhow is available,” said Zsombor Barta, president of the HuGBC.

He says the pathway to achieving net zero buildings is probably best “represented, described, and summarized” by the World Green Building Council’s Advancing Net Zero (ANZ) program.

“Several signatories have already committed themselves to this truly important but ambitious goal. The good news is that the Hungarian Green Building Council is also among the signatories of the ANZ program, and there is an ANZ case study already available under this ambitious program from Hungary,” Barta noted.

Chikán added. Hungary is currently not seen as managing its natural resources well and is far from circular, but it is encouraging that, as across Europe, the legislative process has started to address the issue of the circular economy.

“These are important steps that can ensure that Hungary’s further development does not take place by using up natural resources,” said Tamás Rentz, head of the Department of Sustainability and Awareness Raising at the Ministry of Technology and Industry, reporting on the progress made so far and on the next steps.

Many analysts see the transition to a circular economy as today’s big business opportunity. Most economic actors do not yet sufficiently understand the essence of the concept. Still, it is a model that can increase the economy’s resilience and facilitate the achievement of the Paris Agreement on climate change and the UN Sustainable Development Goals. Creating a circular economy could represent a global business opportunity worth USD 4.5 billion by 2030, according to the BCSDH.

“Sustainability is at the heart of ING Bank’s strategy. We see the shift to a circular economy as essential to preventing climate change, and financial institutions have the responsibility to be the drivers of this process, as we banks can provide the finance to make the transition,” noted Tibor Bodor, CEO of ING Bank, host of the Circular Economy Summit.

and biological and technological components are returned to circular processes without any loss of quality. The shift to a circular economy, therefore, involves a rethinking of the relationship between markets, consumers, and natural resources through the responsible management of natural resources.”

issues are acting on them simultaneously with economic interests.

“The achievement of more and more net zero building is of very high importance; this is emphasized by the EU decision-makers, but on national levels as well,” Barta said.

Details of the World Green Building Council’s Net Zero Carbon Buildings Commitment can be viewed at worldgbc.org/ thecommitment/ • More on the Irota EcoLodge, in Irota,

223 km northeast of Budapest, close to the Aggtelek National Park and the border with Slovakia, can be found at worldgbc.org/case_study/ irota-ecolodge/

“The Irota EcoLodge is one of the first buildings within the CEE region assessed as an ANZ building; the assessment was conducted by the sustainability consultancy Greenbors Consulting Kft. The ANZ Program and the Irota Ecolodge are good examples for showcasing how an ambitious netzero goal can be achieved in Hungary,” the HuGBC president added.

More companies are signing up for the strategy as environmental and social

“Hungary will soon be implementing the nearly zero carbon directive (nZEB) for new commercial and residential buildings; implementation was unfortunately delayed several times because of the pandemic and the recent energy crisis. But it will be an important step towards net-zero buildings, which will shortly follow the nearly netzero ones, I am sure, but we would also need some incentives as well,” he said.

“Energy efficient (net zero) buildings and infrastructure are beneficial on the local, regional, and international level; therefore, such developments should be strongly supported, and incentives might also be needed. The ambitious goals of the EU to be net zero by 2050 is not very far away [...], the real estate sector definitely needs a push so that these targets can be achieved,” Barta added.

GARY J. MORRELL

The extraction and processing of natural resources cause up to 90% of biodiversity loss. One million species are threatened with extinction by 2050. More than half the world’s GDP is moderately or highly dependent on nature and its services, and the circular economy and biodiversity are closely interrelated.

GARY J. MORRELL

From left Tibor Bodor, CEO of ING Bank; Norbert Holczinger, head of Department of the National Bank of Hungary; Dr. Barbara Botos, Traveling Ambassador for Climate Affairs and Climate Diplomacy of the Ministry of Technology and Industry; Marianna Pinczés, managing director of Virgin Oil Press Ltd.; and Irén Márta of the BCSDH. Photo by BCSDH.

Football Scarves and Financial Support

A rocket had damaged a transformer connected to a pump station along the pipeline, severing power for a period, which temporarily halted the delivery of crude to MOL. The Hungarian oil and gas giant said its crude reserves had been sufficient to keep its main Danube Refinery operating continuously and that the interruption did not put the country’s energy supply at risk.

While deliveries resumed within a day, albeit at low pressure, Minister of Foreign Affairs and Trade Péter Szijjártó said that Hungary must expect faltering deliveries through the pipeline over the coming period because of Russia’s relentless assault on Ukraine’s energy infrastructure.

Although Szijjártó reiterated that this would not affect Hungary’s energy security, a government spokesperson told international news wire Reuters on November 28 that it could only maintain

a fuel price cap it had put in place beyond January 1 if shipments from Russia flowed without interruption and MOL’s refinery in Százhalombatta operated continuously. Recently, the oil and gas company has had to restrict deliveries of motor fuel to petrol stations across the country as a consequence of the fuel price cap.

It was precisely such energy concerns that informed the government’s decision to establish an independent energy ministry.

Most Important Issue

“Energy is the most important economic and political issue for Hungary today, and that needs to be reflected within the government, with a view to responsibilities,” Prime Minister Viktor Orbán told Kossuth Rádió on November 18. The Hungarian Parliament approved the establishment of the new Ministry of Energy Affairs on November 22, which Csaba Lantos, a banker with a background in energy trading, will lead. Lantos told a parliamentary committee that

creating the conditions for Hungary’s energy sovereignty would be “the most important task” of the coming years.

Meanwhile, relations between Hungary and Ukraine have been strained recently. Orbán had angered Ukraine and Romania by wearing a football scarf adorned with a map of historical Greater Hungary, which included territory in both countries that Hungary had forfeited under the Treaty of Trianon following the end of World War One.

Roundup Crisis

On the other hand, Hungary has complained to the European Union about Ukrainian boycotts of Hungarian companies. Authorities in Ukraine have reportedly “banned” products made by MOL and pharmaceutical company Gedeon Richter for their continued business presence in Russia. Hungary insists neither company is in breach of sanctions.

On a more amiable front, a resolution published in the latest issue of the official Magyar Közlöny [Hungarian Gazette] revealed that Hungary’s government mandated Szijjártó to start talks with Ukraine on drafting an agreement on

EUR 187 million

in financial support. While Orbán insists he will not accept joint borrowing by the EU to assist Ukraine, he has said Hungary could contribute an annual HUF 60 bln-70 bln from the central budget through a bilateral agreement with the beleaguered nation.

President Katalin Novák visited Kyiv on November 26, at the invitation of Ukrainian President Volodymyr Zelensky, to participate in the launch of the Grain From Ukraine initiative. Novák said Hungary is supporting the program by financing a USD 3.5 million delivery of 10,000 tonnes of grain to Africa. She also added that Hungary is offering assistance for the transshipment of grain at a depot on the Ukrainian border.

NICHOLAS PONGRATZ

Photo by Zoltán Balogh / MTI.

Taylor

Wessing

Hungary Welcomes Counsel

Gábor Helembai joined the Budapest office of international law firm Taylor Wessing in September as counsel in the corporate, M&A, and real estate practices, according to a press release sent to the Budapest Business Journal

Boasting more than 15 years of experience, Helembai joined from Bird & Bird, where he worked as a senior associate in the corporate/ commercial practice of the Budapest office while also heavily involved in the real estate practice of the firm.

He also gained unique insight and experience in the gaming and betting industry, where he regularly advises major online and high street retail operators, as well as slot machine manufacturers, on regulatory matters. He is a regular speaker at leading international gambling conferences and frequently publishes in wellknown gambling industry journals and websites.

“The appointment of Gábor Helembai is a huge asset to our firm. Over the past years, Gábor has established himself as an expert in various fields of law. I’m sure that his contributions to the expansion of our corporate, M&A and real estate practices will prove to be indispensable and his unmatched knowledge

of the gambling sector will provide further advantages for us,” explains Torsten Braner, managing partner of Taylor Wessing Hungary.

Helembai adds: “I highly appreciate the opportunity to join the dynamic team of Taylor Wessing Budapest. I have lots of plans, coupled with energy and enthusiasm, to tackle the challenges ahead and prove myself by contributing to the development and future success of the firm.”

Kinstellar Strengthens Corporate M&A Team

Kinstellar’s Budapest office has appointed Annamária

Csenterics as a partner and co-head of the local corporate M&A service line. Csenterics is an experienced corporate M&A practitioner with a career spanning 20 years at international law firms and as an in-house lawyer. She has served as lead counsel on scores of domestic and cross-border mergers, acquisitions, dispositions, joint ventures, and strategic transactions, including spin-offs, split-offs, and exits. Her clients have included corporations and private clients domiciled in the United States, Europe, and Hungary.

She will co-head the local corporate M&A service line, including real estate and private

equity, with partner and leading M&A lawyer Gábor Gelencsér, who joined Kinstellar in 2019 and leads local and cross-border deals for significant market players, especially in the banking and energy sector.

They are supported by English law-qualified partner Anthony O’Connor, who is taking a broader firm-wide role with a leading position in Kinstellar’s newly formed South East Asia desk. Before joining Kinstellar, Csenterics was a partner in the corporate M&A team of Dentons in Hungary for five years and previously worked at Weil, Gotshal & Manges in Budapest. Over the course of her career, she has been recognized by the leading international legal directories Chambers and Legal 500 as one of the top lawyers in Hungary for corporate/M&A matters.

Csenterics earned an LL.M. degree in International Legal Studies from Georgetown University Law Center, Washington, D.C. She is a Hungarian and New York Bar-qualified lawyer and speaks Hungarian and English.

Kristóf Ferenczi, managing partner of Kinstellar’s Budapest office, comments, “Annamária’s outstanding track record, excellent reputation, and finely-honed market knowledge, are an excellent fit to our robust corporate and M&A team in Budapest and will further enhance the leadership of this important service line.”

Csenterics adds, “I believe that the unique platform Kinstellar represents and the breadth of its network will allow me to grow and, together with Kinstellar’s outstanding corporate M&A team in Hungary and throughout the firm, we will further expand our practice in Hungary and the wider CEE/SEE region.”

Time to Care: Express Medical Assistance at Doktor24 Multiklinika

The Budapest Business Journal speaks with Balázs Sárosi, head of Doktor24 Express, the urgent care unit of the leading local private healthcare provider Doktor24. Sárosi and his professional team of doctors offer instant medical care to walk-in patients at the company’s state-of-the-art Doktor24 Multiklinika in District XI, Budapest.

BENCE GAÁL

BBJ: Who should turn to Doktor24 Express?

Balázs Sárosi: We give families peace of mind by offering easy and quick access to professional urgent medical care without long waiting times. We primarily treat walk-in clients with acute health issues, but we are also prepared to assist people who are simply not sure what kind of specialist they should see for a particular problem. Our Western European-trained, Englishspeaking team of ER doctors examine, test, diagnose, and treat clients on the spot. If needed, we can also give direct referrals to 50-plus in-house consultants and specialists within Multiklinika for secondary care. We intend to serve

families, so we also treat kids over the age of one, and we can also refer them to Doktor24’s strong team of pediatric specialists. Our clinic is open beyond regular business hours, from Monday to Friday between 10 a.m. and 8 p.m. Clients can secure a parking spot in our underground car park by phone, and we can also assist those with limited mobility to access our premises from the parking area. Our English-speaking doctors boast decades of experience in ER patient care from Western Europe and maintain a comprehensive knowledge of the U.K.’s NHS protocols.

BBJ: What kinds of injuries and illnesses do you treat at the clinic?

BS: We treat a long list of non-lifethreatening medical issues from fever, colds, coughs, minor burns, urinary

problems, allergic symptoms, slight head injuries, strains, sprains, and more. In other words, we cover typical sports injuries, domestic accidents, common illnesses, and conditions that require medical attention but do not require hospitalization. The “we treat” and “we do not treat” lists are available on our website, along with our fair and transparent pricing. Our clients cannot

David Yearn Joins Reassurance

Having spent 14 years of his career with a leading international title insurer and holding a key business development role across the region, David Yearn has joined independent insurance broker REassurance’s CEE team as managing director.

Yearn has worked on transactions in multiple jurisdictions and sectors (office, retail, industrial, hotels, and renewable energy). His involvement in assisting to insure some of the most significant single- and multi-asset cross-border transactions of the last decade gives him an exceptional understanding of the real estate transaction market in CEE and SEE.

“For some time I have seen the insurance landscape changing and becoming more sophisticated in the solutions and products that clients require. I am delighted to continue my career with REassurance and we have some really exciting new strategies to develop and to dovetail with our already successful business,” said Yearn.

Outgoing managing director Charles Cruden, who will retain a non-executive director position within the company, added, “I recognize the demands of the role and feel comfortable handing the baton of responsibility to David to spearhead the next stage of Reassurance’s development.”

anticipate when they will need to come to us, so no appointments are necessary to visit Doktor24 Express. We guarantee medical attention within 15 minutes from arrival, and a full cycle of treatment is completed within four hours.

If the client’s condition requires emergency care in a specialized facility, we will do our best to stabilize their condition and call an ambulance or refer them to the local emergency care department.

BBJ: What kind of care do you provide on-site?

BS: Clients are treated in their order of arrival, in line with ER triage protocols. Primary care includes triage classification, medication to relieve pain or fever, a preliminary medical examination, and, if necessary, an ECG and targeted emergency ultrasound to make a full assessment. On-site lab tests are also available to rule out certain diseases and conditions such as thromboembolism, myocardial infarction, or severe organ failures. We have a whole arsenal of diagnostic equipment at hand at Multiklinika, with ultrasound, X-ray, and additional laboratory tests. We treat sports and domestic injuries with state-of-the-art bracing and gait support. If necessary, we can administer intravenous infusion treatments and obturation, offer wound management and wound closure (in the vast majority of cases with sutureless closure) and remove foreign bodies.

PRESENTED CONTENT

Balázs Sárosi

WHO’S

Budapest ONE 1st Office Building in Hungary With Highest Well Rating

The first 25,000 sqm phase of Budapest ONE has received Well “Platinum” certification, the highest rating available from the third-party sustainability accreditation organization. The office building was the first in Hungary to meet the highest requirements of the International Well Building Institute (IWBI), which was confirmed by on-site inspections by international experts, according to the developers, Futureal.

The International Well Building Standard values and recognizes space that improves people’s health and wellbeing. Currently, only five complexes in Hungary have the certification for people-centered buildings, four of which were developed by Futureal.

The first phase of Budapest ONE was handed over at the beginning of 2020.

“In addition to location, accessibility, and a people-centered environment, energy efficiency has emerged as one of the most important factors in the decision to choose an office,” says Tibor Tatár, CEO of the developer.

“Futureal has always developed its buildings to the highest sustainability standards, often as an industry pioneer. Thanks to these efforts, we can offer attractive options even for particularly energy cost-sensitive major tenants,” he adds.

In line with sustainability certification requirements from another third-party organization, Breeam, the Budapest ONE office building has been equipped as standard with intelligent building management systems to ensure optimal operation of mechanical and electrical equipment, as well as low-carbon and energy-efficient heating and cooling technologies, according to Futureal.

YOUR COMMERCIAL REAL ESTATE EXPERT

The office complex was one of the first in Hungary to be pre-certified to the highest IWBI standard, which recognizes aspects that have a positive impact on the health and well-being of employees during the design phase of buildings. Futureal has also launched what it calls a “Stay Safe” initiative, introducing new health protection regulations and technical solutions.

Rooftop Track

The interior walls of Budapest ONE are covered in calming colors, and there is a green roof garden, bicycle storage with showers, and a rooftop running track. In addition, it is possible to charge electric cars in the garage, and selective waste collection is also a standard feature.

Half a hectare of open public space was created inside the building, and a weathercontrolled, low-water consumption irrigation system was installed.

“In line with the highest Well requirements, we create unique office areas that enable tenants to create attractive, healthy, and creative workplaces for their employees while they can improve their ESG performance and, therefore, their competitiveness,” comments Gábor Radványi, the chief architect for Futureal Development.

“Our commitment is proven by the fact that four of the five Well-certified buildings in Hungary were developed by Futureal. Moreover, Budapest ONE’s Well ‘Platinum’ recognition is a rarity not only in the country but also internationally, as it is [only] the second building in CEE that has been proven to meet the highest expectations during the on-site inspection of the international certifiers.”

“Our commitment is proven by the fact that four of the five Well-certified buildings in Hungary were developed by Futureal. Moreover, Budapest ONE’s Well “Platinum” recognition is a rarity not only in the country but also internationally, as it is [only] the second building in CEE that has been proven to meet the highest expectations during the on-site inspection of the international certifiers.”

The first Well certification in Hungary was obtained by the Corvin Technology Park office building on Corvin Sétány, completed by Futureal in 2021. This year, both phases of Advance Tower on Váci ut also received Well certification. Upon completion, Budapest ONE will add a total of 65,000 sqm of leasable space to the Budapest office market.

GARY J. MORRELL

Budapest One by Futureal.

in Brief News

Oxford Economics: Hungarian Economy

Facing ‘Perfect Storm’

A “perfect storm of shocks is hitting the Hungarian economy,” and the “risks of a more severe scenario are rising,” Oxford Economics has warned in a research paper, according to intellinews. com. Hungary is experiencing the highest inflation in the EU outside the Baltic States, the worst depreciating currency in the bloc, and the prospect of recession next year. The country’s position is weaker than its Central European neighbors because of its high fiscal and external deficits and its bigger foreign currency external debt load, all of which contribute to the deteriorating sentiment towards the forint, which has lost 13% of its value so far this year. “Hungary’s swelling external imbalance – the current account deficit is wide (currently over 6% of GDP) – makes the economy especially vulnerable to this

kind of shock. And Hungary’s external debt denominated in U.S. dollars and euros is higher than in its peers, meaning that currency depreciation hits it disproportionately,” Oxford Economics says.

BMW Adds Battery Assembly Plant in Debrecen

German automaker BMW Group announced on November 25 that it would build a high-voltage battery assembly plant at its vehicle production base under construction in Debrecen (225 km east of Budapest). According to autopro.hu, the news represents a doubling of the investment value at the 400-hectare site to more than EUR 2 billion. BMW laid the cornerstone of the vehicle manufacturing plant at the base in Debrecen in the summer. Production of the car maker’s fully electric Neue Klasse is set to start there

Penny Inaugurates HUF 7 bln Expansion

German-owned discount supermarket chain Penny inaugurated a HUF 7 billion expansion of its logistic base in Karcag (165 km east of Budapest) on November 25, according to portfolio.hu.

The Karcag logistic base is one of three such facilities Penny has in

Hungary, State Secretary Norbert Izer of the Ministry of Finance said at the ceremony. The investment was financed from the company’s internal funds, he added.

Headcount at the logistics base is expected to increase by 40 initially and then an additional 60. CEO Florian Jens Naegele noted that

in 2025, and the batteries assembled at Debrecen will go into the new class models. BMW Group said the battery assembly plant would create more than 500 additional jobs. Minister of Foreign Affairs and Trade Péter Szijjártó said the government would contribute HUF 13.5 bln in support for the 140,000 sqm battery assembly plant.

Chemark Inaugurates EUR 13 mln Factory

Pesticides maker Chemark inaugurated a EUR 13 million factory in the Peremarton industrial park (105 km southwest of Budapest, near Veszprém) on November 25, according to state news agency MTI. The 1,500 sqm plant will boost Chemark’s annual production capacity by 10 million liters up to 67 million liters, making it one of Europe’s biggest pesticide makers, CEO Ervin Tegi said. The government provided HUF 1.3 billion in support for the investment. This year, Chemark expects revenue of more than HUF 25 bln, up from HUF 20 bln in 2021, Tegi said. Chemark’s most significant partners are Syngenta and Sumitomo Chemicals Agro Euro.

Automotive Industry Experiences Best Q3 on Record

In its survey of the automotive sector’s 16 most significant players in Hungary, EY found that JulySeptember was the best third quarter yet recorded for the industry, both in terms of operating profit, and sales revenue, according to profitline.hu. Despite the slowing economy and the complex geopolitical situation, demand is still strong, especially for premium autos, the supply of semiconductors and other raw materials and parts is improving, and cars can be sold at high prices, making this year’s third quarter a “dream” for car manufacturers. The operating result increased by an average of 28% compared to the previous year. In terms of this indicator, German automakers performed exceptionally well, achieving growth of 58%, overtaking American and Japanese competitors, which had an average increase of 38% and 2%, respectively.

MOL Spending HUF 40 bln on Exploration

local suppliers provide almost twothirds of Penny’s product offer in Hungary. CFO Silke Janz said the area of the logistic base had increased by 10,000 sqm, nearly doubling storage capacity.

Penny Market has 228 stores in Hungary and employs close to 5,000 people. According to public records, it had a revenue of HUF 322 bln in 2021.

Oil and gas company MOL plans to spend HUF 40 billion on exploration in Hungary next year, the upstream head for the country said on November 28, according to novekedes.hu [Growth]. Speaking in Vecsés (25 km southeast of Budapest), on the capital’s outskirts, where MOL announced a discovery a week earlier, Ádám Homonnay noted that the spending does not include operating costs. He said the well in Vecsés is producing almost 600 barrels a day which is being delivered to MOL’s main Danube Refinery, south of Budapest. He added that the new well is expected to operate for another 15 years. It is about 30 km from MOL’s largest source of domestic hydrocarbons, the Tóalmas-1 well, which turns out 160 cubic meters daily.

Mercedes Starts Production at new Press Plant

German automaker Daimler has started production at its new 23,000 sqm press plant in Kecskemét (95 km southeast of Budapest), Mercedes-Benz Manufacturing Hungary said on November 23, according to autopro.hu. The press plant, the second at the Hungarian base, took two years to build. It will turn out parts for compact vehicles made in Kecskemét and components for the global production network of Mercedes-Benz. Almost all of the aluminum waste generated at the plant will be recycled. Mercedes-Benz says it is plowing more than EUR 1 billion into the base in Kecskemét “to equip it for future tasks” while switching to renewable energy sources. According to public records, Mercedes-Benz Manufacturing Hungary had net sales revenue of EUR 3.1 bln last year.

In a photo faintly reminiscent of a scene from the end of “Indiana Jones and the Raider of the Lost Ark,” a logistics worker is seen at Penny’s renovated and expanded logistics center in Karcag on the day of its inauguration, November 25. Photo by Zsolt Czeglédi / MTI.

2 Business

Air France-KLM GM: ‘Look Beyond Price, Focus on Choice’

In August 2022, Bas ‘t Hooft, general manager of Alps and Central Europe for Air France-KLM, touched down in Budapest with his family to live. The Budapest Business Journal discusses his impressions of Budapest and Hungary and his thoughts on aviation and its future.

Having begun his career in aviation with KLM in 2007, ‘t Hooft speaks five languages and describes himself as a “driven commercial professional who wants to make an impact.” His first ever flight, when he was 10 years old, was with KLM.

“I was lucky that my dad’s employer put us in business class,” he says. “So, my first aviation experience was on the upper deck of a Boeing 747. That’s what triggered my fascination with aviation.”

From then on, ‘t Hooft says he was hooked. As a student, he traveled extensively. When it came time to choose a career, he was naturally drawn to the travel industry. His career took off with an internship at KLM. Apart from a little over 12

months

with Delta Airlines, he has worked at KLM and now Air France-KLM for the duration of his almost 20-year career.

A significant part of the appeal of Air France-KLM for ‘t Hooft is the breadth of opportunities the company offers.

“Air France-KLM has a very open work culture. It’s not a top-down company,” he explains. “There are many opportunities to work in different areas, from commercial to cargo, from engineering to maintenance. I’ve been fortunate to work for the company around the world and in many, many aspects of the business. But there’s also plenty of room for personal growth.”

The general manager moved to Budapest with his wife and five children because the city is the Alps and Central Europe regional hub for the airline, stretching from Switzerland to Poland and Bulgaria.

Paris of the East

He’s happy to sing Budapest’s praises. “It reminds me a lot of Paris, where we lived before moving here. My first impression is that it has all the beauty and charm of Paris, but it’s also nice and friendly. I’ve yet to explore much of Hungary, but I took a long weekend recently and went down to the Balaton. I love wine, and we were in wine country. It was marvelous.”

Apart from its quality of life and convenient location for other European cities, Budapest also offers a skilled labor force. As ‘t Hooft says, “the Hungarians in my team are experienced and knowledgeable. I’m very fortunate to be working with them.”

Increasingly, price is becoming less of a factor in air travel, certainly when it comes to corporate travel.

In the Dutchman’s experience, corporate travelers are always looking for the best network and products. That of Air France-KLM extends to many destinations. It’s also investing heavily in its products, including comfortable, well-designed new cabins and seating.

“Apart from our network and levels of comfort, corporate travelers enjoy the value-for-money we offer them,” ‘t Hooft suggests. “Besides that, we have a corporate benefits program that offers them even more flexibility, priority and recognition.”

This emphasis on comfort and value for money signals a move away from the selling on price that has characterized aviation industry marketing for many years.

“Look at the aviation industry up until the early years of this century,” ‘t Hooft points out. “We just used photos of people on beaches and added a price. We sold the idea of getting from ‘A’ to ‘B’ as cheaply as possible.”

Selling the Experience

Today, customers are more interested in knowing, as far as they can, if they’re going to enjoy the experience

of traveling. They’ve become used to looking at photos of products before they buy. Think of when you’re choosing a hotel; you’re happy to scroll through pictures of rooms and facilities to help make your decision, even down to what the breakfast looks like. Shopping for air travel is becoming more like this. Customers are also happy to shop around in expectation of comfort and value for money. Naturally, the industry is responding.

“We’re more focused on how we differentiate our product from that of the competition now. There’s also the growing concern with sustainable travel. Our corporate customers, especially, are organizing their journeys more on the basis of traveling at the right time and for the right reasons, as well as making the right product choice,” ‘t Hooft explains

“We’re more focused on how we differentiate our product from that of the competition now. There’s also the growing concern with sustainable travel. Our corporate customers, especially, are organizing their journeys more on the basis of traveling at the right time and for the right reasons, as well as making the right product choice.”

“They’re less and less likely to book one-day up and down trips purely for convenience. Especially if they can go to a meeting by train, for example.”

With this in mind, Air France-KLM lists train connections alongside flights on its website. It also offers what it calls “SAF contracts” to corporate customers. SAF stands for sustainable aviation fuel, made from materials such as cooking oil and wood residues, that can proactively reduce emissions by

75%.

When corporate customers join the Air France-KLM Corporate SAF program, they help accelerate the use and production of SAF.

Looking ahead, ‘t Hooft sees the trends of buying on the basis of comfort and value for money and traveling as sustainably as possible continuing in aviation for the next five years.

“We’re going to be encouraging customers to look beyond price when booking air travel and focusing on offering more choice, including that of sustainable travel,” he says. “And now that we’re getting back to pre-COVID-19 figures, things are looking very positive. We had great results in our last quarter.”

DAVID HOLZER

Bas ‘t Hooft, general manager of Alps and Central Europe for Air France-KLM

CCIFH: Helping With the Crisis, Moving Towards Sustainability

imposing additional taxes, the scope of the stakeholders, and so on. Of course, the openness of the other party is also needed to turn ideas into action.

BBJ: The other major geopolitical issue is the war in Ukraine, where your scope for influence is less obvious. What has the chamber been doing?

CCIFH: At the end of February, the chamber and the entire FrenchHungarian business community expressed their solidarity and support with the citizens of Ukraine. The chamber is always at the service of its members. As we knew that some of our member companies were directly or indirectly affected by this crisis, we offered our help. In a special issue of our newsletter, we collected the donations of our member companies. Currently, looking to the future, we are following with interest the initiatives of French bilateral chambers abroad in the context of the reconstruction of Ukraine and we are looking for opportunities for similar actions in Hungary.

BBJ: Inflation, supply chain issues, and the ever-tighter Hungarian job market also need addressing. How is the chamber reacting to these pressures?

BBJ: Working with the government and others, what steps is CCIFH taking to help with the energy crisis for businesses and the rising cost of living for households?

CCIFH: The European and global economy is suffering from a postCOVID “supply chain syndrome,” whereby supply chains have failed to recover to pre-coronavirus levels and the arrival of both raw materials, components and final products is compromised. On top of this comes the impact of the Russo-Ukrainian war, which led to an explosion in energy prices. The primary effect is inflation, reaching almost unprecedented levels not only in HUF but also in EUR and USD. The power of a chamber is not enough to make a marked difference in this global situation, but it can be an initiator and a catalyst in all issues that help to bridge this uncertain and volatile economic situation. We focus our information and experience-sharing business forums for our member firms mainly on hot topics that are most relevant to their daily business impacted by the above mentioned issues. In dealing with the government, we can help raise ideas and thoughts aiming to temper the impact of the above mentioned issues, making it easier for entrepreneurs to sustain operations while these extreme conditions exist. For example, how the energy price limit is applied or the conditions for

CCIFH: The Hungarian labor situation is in a critical situation. This is not specific or generated by inflation. It is typical of Eastern Europe that, following the change of regime in the 1990s, and after the accession of the former communist countries to the EU, a large number of employees, mainly from Generation

wage spiral. On this topic, the chamber can help members by providing up-todate and valuable data, comparisons, job analyses, and sharing company experiences. All this builds a more complete picture of the situation in the labor market, the difference in employees' needs by generation, and the evolution of wage demands, providing employers with full and accurate information to make the right decisions. In November, we organized the fall round of our Hot-topic series of events on this issue.

BBJ: Sustainability has long been a focus of the chamber. With all the threats outlined above, do you fear it will fall back down the agenda?

resources available for climate-neutral projects. Individuals can also contribute to achieving carbon neutrality and sustainability. Tax incentives and awareness-raising campaigns can make individuals realize they can do a lot by collecting waste separately, for example. Even though sustainability costs more, it is worth acting together and spending money so that our children and grandchildren can enjoy similar living conditions: clean rivers, beautiful forests, good air, and healthy food.

BBJ: Given all these pressures and challenges, are you seeing any impact on chamber membership numbers?

CCIFH: We consider ourselves lucky. The number of chamber members has been growing steadily, albeit slightly, year after year. Rotation is a natural process in the life of any chamber. Economic downturns always significantly impact membership, but most members have been loyal to our business community for years. When setting our annual action plan, we always keep our members’ goals in mind. We meet with them regularly, visit them and assess their needs. We make member satisfaction our top priority and sincerely celebrate every success of our companies.

Y but also Gen X, left their countries to find jobs in Western Europe. The share for the region is estimated at 8-12%, in Hungary, at 7-8%, and this is the segment of workers from which employers prefer to hire. This difficult labor market situation has been further aggravated by the salary tension created by the current inflationary explosion, which could lead to a dangerous price/

CCIFH: The chamber is committed to sustainability and climate neutrality. We are involved in many initiatives. Unfortunately, it seems to us that we are still talking much more about climate change prevention and sustainability than acting on it: and we are not talking just about the CCIFH but all the economic players who have or could have an impact on the Earth’s climate. We can only succeed in this challenge if governments, companies, and individuals stand up for climate neutrality in principle and in action. Everyone must be made aware that to achieve climate neutrality and carbon neutrality, it will cost more to live. Governments need to provide a legislative framework and tax relief that do not make this an unbearable burden on businesses and individuals. This would mean giving up part of their tax revenue. Companies should accept that a certain percentage of their profits should be spent on climate neutrality projects. Perhaps the best approach, without harming competitiveness, would be that all companies uniformly would invest Y percent of their revenues of X past years into climate neutrality projects. This would avoid loss of share or company value but would win important

BBJ: Is there anything else you would like to add?

CCIFH: In recent years, we have faced many challenges, starting with the pandemic, followed by the RussoUkrainian war. This was followed in the second half of 2022 by an extreme economic situation, one of the consequences of which was a multiplication of energy prices. This is an unmanageable change in the short term, as it is impossible to pass on such a price change to consumers, whether industrial, commercial or private. The situation has taught us a hard lesson, but it is common sense and the goal of all people to move towards a way out of this situation. Just as there have been many times in history when the world has been in a difficult economic situation, and we have been able to find appropriate solutions to the problems, we are confident that the decision-makers who can play a role in this will find solutions to make the world a little better next year.

László Károlyi, chairman, and Ágnes Ducrot, executive director of the FrenchHungarian Chamber of Commerce and Industry (CCIFH), talk with the Budapest Business Journal about the steps the chamber is taking to help its members cope with the economic crisis.

BENCE GAÁL

“Just as there have been many times in history when the world has been in a difficult economic situation, and we have been able to find appropriate solutions to the problems, we are confident that the decisionmakers who can play a role in this will find answers to make the world a little better next year.”

László Károlyi

Ágnes Ducrot

Are we Entering an Era of Capital Shortage?

We have, until recently, had such low-interest rates over the past decade partly because new capital formation has been plentiful. The Budapest Business Journal ’s corporate finance columnist Les Nemethy explores the idea that capital will become much scarcer during the coming decade, contributing to a higher interest rate environment.

While this article, due to its brevity, may oversimplify the situation, I will deal with one preeminent reason why the supply of capital will suddenly diminish, and four reasons why the demand for money is likely to increase. This intersection of lower supply and higher demand could see a significant market shift towards higher interest rates.

A large part of capital formation in any country comes from individual savings, which depend heavily on demographics. Youngsters usually borrow until their early 30s. Beyond that age, they save increasing amounts. In the years before retirement, they typically sock away as much money as possible. The savings

rate accelerates from the early 30s as age progresses until approximately age 65.

Then it’s as if someone flicked a switch: upon retirement, a person stops saving and begins drawing down savings. This is true not only on the micro level but also on the macro level.

As I have written before, like the proverbial pig moving through the python, the demographic bulge of baby boomers has worked its way through to retirement to create a demographic cliff. There will be a record number of new retirees in the coming years who will suddenly begin drawing down savings.

Four Trends

Having dealt with one reason why the supply of capital will suddenly diminish, let me now outline four trends that are likely to increase the demand for money.

1) Automation: As the size of the working population decreases in relation to the total population, fewer people are available to fill open positions, leading to higher wages. This provides an increased

The Corporate Finance Column

ongoing instability in the Middle East, and other geopolitical hotspots suggest this trend is likely to reverse.

Shifting the Curve

The cumulative effect of the above will likely shift curves for both supply and demand of capital to cause higher interest rates in the coming decade.

Since the Great Financial Crisis of 2008, there has been so much manipulation of interest rates by central banks through both quantitive easing and now quantitive tightening) that we seem to have forgotten that supply and demand for capital, ordinary market forces, help determine interest rates. The market manipulations of central banks extol a price.

incentive to substitute capital for labor, and so the economy shifts to being more capital-intensive.

2) Investment in Energy: Global warming has created enormous demands on capital and drives investment into new alternative energy sources (solar and wind farms, nuclear reactors, etc.) which are all capital intensive.

Electric vehicles demand vast amounts of battery minerals; copper, aluminum, nickel, cobalt, and lithium, to name a few. The supply of battery minerals is so inadequate that trillions of dollars will be required for new mines.

It is probable that increased drilling for oil and gas, investment in pipelines, etc., will also be required to compensate for geopolitical realignments and the fact that alternative energies don’t seem to be able to fill the gap from declining fossil fuels fast enough.

3) Near-shoring: Until recently, there was an exodus of manufacturing from the United States and Europe to places like Mexico, Asia, and especially to China. In the recent past, due to national security concerns and fears of disruption, much foreign investment that had been heading to China is relocating to places like Vietnam and India.

Improvements in automation, sensors, process automation, artificial intelligence, the internet of things, and so on mean that less labor and more capital is required to produce many goods, as well as a much more highly qualified workforce, creating a trend towards manufacturing in North America and Europe.

This reshoring and retooling of plants also require vast amounts of capital. For example, tens of billions of dollars are being spent to create chip capacity in America.

4) Increases in Military Spending: As can be seen from the chart below, global military spending as a percentage of GDP has declined dramatically over the past decades. Russia’s war in Ukraine, China’s threat to invade Taiwan,

Improvements in automation, sensors, process automation, artificial intelligence, the internet of things, and so on mean that less labor and more capital is required to produce many goods, as well as a much more highly qualified workforce, creating a trend towards manufacturing in North America and Europe.

For example, QE has contributed to inflation and misallocation of capital spending, what the Austrian school of economics calls malinvestment. Hence, there may be a limit to manipulation: a significant shift in demand (caused, for example, by a loss of confidence in fiat currencies) may cause bond markets to override a central bank’s effort to determine interest rates.

This article does not claim that supply and demand will inevitably push the cost of capital higher; however, underlying market forces seem to point in that direction. There are many other forces, central bank manipulation, tax policies, economic cycles, technological developments, and so on, that may create (at least temporary) surprises.

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

Photo by lightofchairat / Shutterstock.com

all

We thank

our business partners who have supported us theduring past 30 years

NETHERLANDS-HUNGARIAN CHAMBER OF COMMERCE HOLLAND-MAGYAR KERESKEDELMI KAMARA

Budapest is a spectacular city with centuries-old squares and buildings. During winter, some of these spaces become even more stunning when the Christmas fairs open for visitors. This year they are even more welcome than usual, following two years of pandemic restrictions. Prices, however, are likely to be prohibitive for many locals.

Many of the 23 districts of the Hungarian capital hold Christmas markets, but two attract the most significant number of visitors, both located in District V: at Vörösmarty tér and in front of the St. Stephen Basilica. The first accommodates 80 exhibitors, the latter around 120.

This year, the same company is behind both events, with the organizers of the Advent Basilica fair (twice voted the best in Europe) also entrusted with the Vörösmarty market. The latter, home to a Christmas fair for more than 20 years, opened to the public on November

18,

rebranded as the Vörösmarty Classic Xmas, and even has a dedicated host, actress Anita Ábel. She shared the most relevant details with the Budapest Business Journal

The fair on Vörösmarty tér will be open until December 31, and the main goal, the organizers say, was to bring back the feeling of traditional fairs. The layout has been carefully structured thematically, so visitors can more easily find what they want. The food booths have been separated from the manufactured products, so the flow of visitors is smoother. This gives the whole square a more organized and spacious feeling.

“Maybe it would seem that there are fewer exhibitors this year, but the number

is the same, only the setup of the fair changed, which gives a more spacious feeling. Manufactured Christmas presents will be available until December 28, and food until the 31st,” Ábel says.

A new element is a mini-train near the lion fountain, which is free and much appreciated by younger children. Also, they can create their own Christmas presents in a heated shack. For pet lovers, the Vigyél Haza (Take Me Home) Foundation will offer onsite information and the opportunity to support puppies.

Poetry Corner

Another change is the covering over the central statue of poet Mihály Vörösmarty, for whom the square is named.

“In previous years, it has been wrapped in a simple plastic cover to protect it from low temperatures. This year, the statue is surrounded by quotes from Vörösmarty’s poems in Hungarian, but also in German and English for foreign visitors,” Ábel explains.

Food prices on Vörösmarty tér are fixed: visitors can enjoy a copious Hungarian dish for

HUF 1,500

(EUR 3.5), which is extremely tasty and is available at all food booths. Also, the mulled wine, the spiced smell of which fills the air, now has a uniformly standard price of HUF 1,200 (EUR 2.8), Ábel says.

However, prices seem less budgetfriendly in 2022, even more so when compared to last year. In 2021, that same mulled wine cost HUF 900. For the kids, hot chocolate prices have risen from HUF 1,000 to 1,500. High inflation, at more than 21% in October, has obviously increased the costs, to the extent that the Hungarian media have variously described them as a “horror” and “brutal” or “mad.”

These are not extraordinary prices when compared to Christmas fairs in other Western European cities (for example, EUR 9.4 for a cup of mulled wine at the Christkindlmarkt in Vienna), but that does not mean they are easily affordable to a median-income Hungarian family.

Selling for Your Supper

Based on the prices, one might expect exhibitors to make a fortune during the two weeks of the fair, but costs are equally high, not least from the HR perspective. Food sellers are in high demand and paid an average daily fee of HUF 30,000/EUR 71.5. For that, they are expected to work 14-15 hours a day. Specific qualifications are not required, but candidates are expected to be reliable and to speak English at least to a conversational level. English or German language knowledge, preferably both, is essential, as most tourists arriving at the two leading Budapest Christmas fairs come

from abroad: estimates put the share of foreign visitors at about 60%.

One of the sponsors of the fairs at Vörösmarty and the Basilica is the Hungarian Tourism Agency (MTÜ).

The BBJ did ask the agency for detailed estimates about the number and expected spending of foreign guests at the fairs, but it did not respond to our inquiries.

The rental fees for exhibitors are not made public either, but the Hungarian edition of Free Europe revealed that the cost for a small, four square meter booth in either square is about

HUF

1 million,

plus electricity consumption of approximately HUF 200,000. Exhibitors told Free Europe that these fees are not excessively high, considering the central location and that visitors tend to spend more during the winter holidays, especially foreign tourists.

Speaking of which, Budapest is not always a winner in international price comparisons. Business portal hvg.hu compared product prices at the Christmas fairs in Budapest, Vienna, Brussels and Paris. According to this, mulled wine prices are the same in Brussels and Budapest but significantly higher in Vienna and Paris (double in the French capital, in fact).

Food price comparisons are more complicated, as the specifics differ, but if you look at the most expensive dish as the matrix for measuring, Vienna ranked lowest (ironically with Hungarian goulash or Altungarisches Kesselgulasch) at HUF 5,267. In Budapest, lamb trotters cost HUF 8,500, and in Paris, barbecue ribs with French fries and sauce are HUF 9,000, hvg.hu says.

BALÁZS BARABÁS

Black Friday: Maybe December Will be Better

Romanian Comparison

This year’s Black Friday was probably the most unpredictable for retailers. Customers were told to expect discounts of a maximum of 20%, while inflation in October was 21.1%. That meant those lucky enough to take advantage of the higher discount rates for products could buy them at last year’s prices, at best.

To say the least, that did not present a very attractive offer. In addition, electricity and heating bills massively impacted family budgets in November, which must have cooled the usual shopping fever for Black Friday.

Recent studies indicate that Hungarians had, indeed, lost much of their previous interest. Based on data provided by Google Trends, Picodi summarized the search statistics for Black Friday and found that 53% fewer Hungarians conducted searches for promotions than three years ago (in other words, before the pandemic).

According to Picodi, this is due not only to the insecure financial situation but also to the fact that the terms

eMAG Hungary Black Friday Sales

2022 2021

Items sold 375,000 420,000

Turnover (HUF) 10.5 bln 10.13 bln

Average value per order (HUF) 74,971 61,000

“Black Friday” and “Black Week” have become debased and lost some of their impact: the promotions are too many and last too long.

While the drop seems dramatic in Hungary, it is not the highest. In Turkey, it was

-81%,

in Russia -58%, and in Poland -54%. But there were also countries where interest in Black Friday rose, as in the case of Japan, with 22% more searches, and, less dramatically, Finland, up +1%, according to Picodi.

But the sales data did not confirm the anxious statistics. Electronics chain Euronics reported 80,000 more products sold on Black Friday than in October, a 54% increase. The most popular products were small vacuum cleaners, smartphones and air fryers. On average, buyers spent HUF 140,000 on smartphones. This category generated the highest revenues for Euronics on Black Friday, with the best-selling brands being Samsung, iPhone and Xiaomi.

At retailer eMAG, the Black Friday promotion lasted for one day, on November 18, launched before the majority of retailers, who started on the more traditional November 25. About 166,000 customers placed orders for more than 375,000 products, generating a turnover of HUF 10.5 billion.

Hajdú-Bihar Big Spenders

On average, customers ordered 2.3 items, with an average basket value of HUF 74,971.

Interestingly, geographically the highest average value orders were placed not in Budapest, as in previous years, but in Hajdú-Bihar County (HUF 88,284).

Among the most expensive items ordered were Apple products (a MacBook Pro notebook and a desktop workstation), large OLED and miniLED TV sets, and a high-performance printer.

Apart from the top-priced products, most buyers picked TV sets at an average price of

HUF 170,000

and laptops (for HUF 123,000). Also popular were smartphones ( HUF 180,000, on average), tablets (HUF 120,000), refrigerators (HUF 152,000) and washing/drying machines (HUF 168,000).

Other popular products were bigpack rinse aids, dishwasher capsules and toilet paper. Interestingly, while buyers spent nearly HUF 12,000 on pet food, they paid half that on canned food.

While it is difficult to compare year-onyear figures between Black Friday sales of 2021 and 2022, merely because of the inflation and the HUF vs. EUR exchange rate depreciation, it is worth noting the differences (see chart above.)

Danish multinational home and garden furnishing retailer Jysk had not announced its Black Friday results by the time this issue of the Budapest Business Journal went to print. It had, however, added an extra 24 hours to its sales period this year, taking it up to five days from November 23-27. It has high hopes for the period. Black Friday 2021 saw 18% more traffic over its four-day period than during Black Friday 2020. Last year, the turnover in the department stores was HUF 1.9 bln, while online orders totaled HUF 200 mln. The top sellers in 2021 were Christmas elves, followed by decorative pillows and mattresses. This year, more than 1,500 products were in the sale, with the most significant discount being 70%, Jysk said.

With stores in both Hungary and Romania, eMAG can compare the two. Macroeconomic figures show a lower purchasing power for the Romanian population than in Hungary and also a lower GDP per capita, which would, in theory, result in lower spending, even on special occasions such as Black Friday. But the reality contradicts the statistics. eMAG held Black Friday on November 12 in Romania, where the results look huge. Romanians spent a total equivalent of HUF 52.8 bln with the company, compared to HUF 10.5 bln in Hungary, and the average spend per client was HUF 96,000, as opposed to HUF 74,971 in Hungary.

“We have noticed in the last months that searches rose significantly for the cheapest, no-name products, even for basic food, such as sugar, flour, toilet paper or paper notebooks. Customers turn from premium products to cheaper brands.”

Online commerce growth has slowed this year, a report by GKID and price comparison portal arukereso.hu indicates. While inflation added to the trend, it had started earlier. In Q1 this year, the basket values increased by 12% compared to Q1 of 2021, but by Q2 and Q3, the values were lower by a few percentage points.

Michal Vodak, CEO of Heureka Group, which owns arukereso.hu, said: “We have noticed in the last months that searches rose significantly for the cheapest, no-name products, even for basic food, such as sugar, flour, toilet paper or paper notebooks. Customers turn from premium products to cheaper brands.”

GKID analyst Norbert Madar says there is also a powerful buyer group that has financial resources but saves them for the pre-Christmas period, and that is when they will spend more.

Overall, GKID expects Christmas spending to be similar to last year, but the overall number of transactions is stagnating or even somewhat lower than last year. As for the near future, GKID expects inflation to decrease in the second half of next year and online commerce to return to a dynamic growth track.

The categories do not always overlap perfectly, as some products are grouped differently, making direct product comparisons tricky. Still, while 364,000 toys and kids’ products were sold in Romania, for example, the figure was 51,376 in Hungary.

Wipe Wrinkles Away

Oro Fiorentino, Vagheggi’s limited-edition skincare line, celebrates free emotional expression thanks to its unique anti-wrinkle active ingredient. This smooths out the wrinkles caused by the repeated, everyday contractions of the expressive facial muscles we use to display emotions. Designed to target the face and eye contours, the Vagheggi Oro Fiorentino product line features a second-generation “botox-like” peptide that has been developed in collaboration with expert neuroscientists. www.vagheggi.hu

Take a Trip to our Christmas Candy Shop!

Even Santa can stop here to tick off items from the Christmas shopping list with our range of gift ideas. For those who have walked into Lush’s first-ever shop at 29 High Street in Poole and had their sweet tooth tempted, this one’s for you. There is a real “pick and mix” of bath, body, and shower products here, all packed up in a reusable tin inspired by our home in Dorset. What a sweet surprise! hu.lush.com

Goodbye Dark Spots, Hello Luminous Skin

Nivea 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 cell-activating hyaluronic acid (in-vitro). The Day Fluid protects existing spots from getting darker and prevents their reappearance. The NEW Cellular LUMINOUS630® Night Cream recharges skin overnight and balances new melanin production to prevent the appearance of new dark spots. www.nivea.hu

Discover the Scent of You

The new sensual fragrance for men by s.Oliver, Scent of You, celebrates magical surprises and indescribable first impressions as if they were written in the stars. This aromatic yet masculine composition opens with a uniquely fresh combination of lavender and grapefruit, enriched by orange blossom, clary sage and coumarin in the heart and rounded off by earthy woods in the base. The special ingredients of this fragrance make it equally memorable and highly recognizable for every occasion. It brings out the magic of special moments, assuring you that everything in life is going as it should. www.m-w.de/en/brands/soliver/

FOREO LUNA 4 body: Body Brush for Xmas

Indulge in a profoundly purifying LUNA 4 body experience and remove 99.5% of impurities as you gently exfoliate to prep for enhanced lotion absorption. Enjoy a gentle full-body spa and a fresh, flawless body every day, with eight manually adjustable T-Sonic pulsation intensities for a perfectly tailored cleanse in seconds. The highly adaptable, ultra-hygienic silicone brush head respects individual curves, flexing inwards like a sponge to accommodate various bodily contours as the ultra-hygienic plush silicone effortlessly glides across the skin with no pulling or stretching. This fourth generation of the popular Luna cleansing massager is a must-have under the Christmas tree. www.notino.hu

Popularity of Mobile Payments Growing Among Shoppers

BENCE GAÁL

A smartphone is all that is needed nowadays to shop online, and with its use becoming more widespread, some 74% of Hungarian consumers say they look for products and services using their smartphones, and 69% hunt for bargains with them. Some 59% of Hungarians compare prices using their mobile devices, and 62% pay for them this way.

When asked what they appreciate about online shopping with

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a smartphone, Hungarians mainly list convenience (60%) and speed

(56%).

Recognizing this consumer attitude, Visa launched the “Visa Mobile/Click to Pay” solution in the region recently for online payments based on these attributes.

Consumers can now do almost all their shopping online, which allows them to reduce the time spent in selection and checkout, and that’s where the possibility of adding a payment card to various applications comes in.

Where are the knives?

Hungarians most often pay with their phone for food deliveries (31%), streaming platforms (24%), transportation (18%) and traveling (17%), and 40% of respondents have added their card to an app. The study has shown that 76% of Hungarians aged 18-24 have added their payment cards to at least one mobile app.

As in the case of online shopping, Hungarians have come to like contactless payments with smartphones mainly for their speed (67%) and convenience (65%). Interestingly, among Hungarians who have tried using a

virtual wallet instead of a traditional one, just under a quarter (24%) say they now use the standard plastic card once a month or less often.

Although just a dozen years ago, using a cell phone to pay for your shopping might have seemed like a futuristic dream, nowadays, many consumers are aware of such payment methods, and 69% of Hungarian respondents can recognize at least one solution of this type.

Daily Digital Delivery

“Until a while ago, it was unlikely someone would leave home without a wallet or a payment card. Today it is becoming a daily experience not only for Gen Z or technology enthusiasts. Already, 75% of Hungarian respondents aged 45-54 are aware that they can pay with their smartphones in stores, and 22% are taking advantage of such opportunities,” Ede Kiss, country manager for Visa Hungary, commented at a press conference publicizing the survey.

“At Visa, we believe that a diversity of payment methods is the way forward, and we continue to provide consumers and merchants with a choice in terms of how they want to pay and be paid,” he explained.

“That is why, in addition to traditional cards, Visa payments can be made via digital devices such as smartphones or smartwatches, and we constantly innovate to make new and future

Imi was placed to one of SOS Children’s Villages’ foster families in the middle of winter. The SOS family was preparing for Christmas, cooking, when they noticed something peculiar: knives started to go missing from the house. The foster mum asked the children to see if they knew where the knives might be. Imi whispered to hear ear timidly: ‘I hid it, so you don’t get hurt!’

His foster mum got to the bottom of it. It transpired that terrible things had happened when Imi was at kindergarten age. His biological mother was struggling with untreated mental health conditions, and cut and stabbed herself in front of her little son. Imi was horrified to see the blood, but soon figured out a way of coping with the fear. By hiding the knives, he will make sure that no one ever gets hurt and will keep his loved ones out of harm’s way.

How much time, love and care could Imi need to finally live his life freely and without fear, just as other children?

As we are having a hard time buying presents to the kids amidst the growing cost of living pressure, why not give a gift of love to the children by supporting our Christmas appeal this year.

With a donation of HUF 4000, you can help us put books and board games under the Christmas tree for cosy winter evenings.

adomanyinfo@sos.hu www.sos.hu

Our bank details: 11600006-00000000-27035696 ERSTE Bank

As mobile devices become a part of everyday life, the majority of Hungarians use them for shopping and paying online. They are also curious about paying in-store with a smartphone: already a quarter of Hungarians use this solution. Consumers appreciate its speed and convenience as well as security, according to the Visa Mobile Payment Study 2022, covering eight Central and Eastern Europe markets, Hungary included.

methods, including fast, convenient, and secure mobile solutions,” Kiss added.

With the peak festive shopping season approaching, Visa research has shown that 21% of consumers in Hungary planned to make mobile payments when shopping during Black Friday events, and even more people, some 29%, are planning to do so during Christmas shopping. Some 24% of respondents

said they were planning to use their smartphones to pay during the New Year’s bargain sales season.

Hungarian consumers who pay with their smartphones see security among the benefits of this kind of payment method (43% in the case of in-store payments, 27% regarding online shopping).

“About 67% of the clients of Erste Bank Hungary are digitally active, and nearly half a million of them use their phone for everyday banking,”

said László Harmati, Erste Bank Hungary’s deputy CEO, also speaking at the press conference.

Active Users

“This is the most dynamically growing client segment, regardless of age or status. Of the active mobile phone users, some 200,000 people make mobile payments every day, and the most popular remote payment services are parking fee payments and settling yellow cheques with QR codes. It is no coincidence that in our developments, the ‘mobile-first’ principle is decisive, not only in residential but also in small business digital solutions,” Harmati said. “Mobile payments, in-store or online, are one of the most secure ways to pay. All Visa payments made with a smartphone, smartwatch, or tablet are protected just like any other Visa card transaction,” Kiss noted.

“Crucially, when someone inserts their card data into a mobile wallet on a device, Visa replaces their data with a unique set of numbers. This technology is called tokenization, and it provides an additional layer of security,” the country manager said.

“From a consumer perspective, it is important that payments are secure, convenient, and easy to use, even by those with basic mobile device skills. Today, paying with a smartphone is simple and adding a Visa card to a payment-enabled mobile device takes just a few moments.”

But nowadays, it is no longer just consumers who can use smartphones for payments. Visa argues that its “Tap to Phone” solution has transformed the way essential services and small merchants can accept transactions. Sellers can now download an app to their smartphones and instantly start accepting contactless payments in a secure, touchless, and convenient experience for customers.

“Until a while ago, it was unlikely someone would leave home without a wallet or a payment card. Today it is becoming a daily experience not only for Gen Z or technology enthusiasts. Already, 75% of Hungarian respondents aged 45-54 are aware that they can pay with their smartphones in stores, and 22% are taking advantage of such opportunities.”

The study shows that 56% of Hungarians would already be willing to pay by tapping their smartphone to the seller’s, which serves as a payment terminal.

FROM OUR KITCHEN TO YOUR TABLE: TURKEY AND GOOSE TO GO

November 24-December 26, 2022

Ádám Lévay, the new Executive Chef of Kempinski Hotel Corvinus Budapest, says he is very excited about the coming festive season, as he spent the last 10 years in Arabian countries where Christmas is not celebrated at all.

He is already getting in the mood as ÉS Bisztró’s Winter Terrace opened last weekend in the glamorously illuminated Fashion Street, where guests can enjoy a delicious pulled goose burger and tempting Kaiserschmarrn (a lightly sweetened pancake) along with ÉS’s signature hot wine.

The hotel is taking orders for Advent lunches and Christmas and New Year’s Eve dinners. ÉS Bisztró also offers takeaway turkey and goose for you to enjoy in the comfort of your home.

Ádám and his kitchen team will take the hassle out of the festive meal preparations by doing all the hard work for you. You just pick up the whole roast turkey or goose with all the traditional garnishes ready to serve.

Family and friends will be genuinely impressed: It doesn’t get any simpler than this.

Place your orders by calling +36 20 474 5000 or emailing info@esbisztro.hu

Opening a business doesn’t make you a businessman.

Socialite

Christmas Shopping in Budapest: It’s not About the Shopping

There are two ways to approach a day’s Christmas shopping in Budapest. You can plan it as if it were a military exercise, choose your targets in advance, calculate the quickest route to them and get in and out as fast as possible.

Or you can treat the process as a thoroughly enjoyable way to spend a day on which you just happen to be buying gifts. I opt for the latter.

The only thing I do check in advance is the weather. On a cold, bright winter’s day, Budapest is a joy to mooch around. But not if it’s raining.

Naturally, if you’re doing your shopping in a mall such as the Westend, next to Nyugati Railway Station, or the MOM Plaza, weather conditions won’t be a concern. We tend to avoid malls at Christmas. There’s something profoundly soulless about them, and because my partner knows precisely what stores they house, there’s no element of chance.

For me, Christmas shopping is all about having no idea what you’re going to buy and stumbling across the perfect gift without necessarily knowing who it could be for. This only happens when you wander down a street you don’t know that well and discover a store you’ve never been in before.

If, once inside, you’re faced with a cornucopia of gift ideas, but you have no idea what to buy or for whom, I suggest you adopt one of two strategies that have always worked for me.

Buy something you would like. That way, when you review your haul of potential presents, if you can’t think who would most appreciate an item (a Christmas tree bauble with “F*ck you 2022” on it, for example), you’re happy to keep it.

(By the way, while I doubt you can find one in Budapest, that obscene Christmas bauble is not a product of my imagination. I found a selection after extensive research: 30 seconds of Googling.)

The other strategy that never fails is to keep your receipts. This is why I’m never too concerned about what to buy for my partner. If I’ve let my imagination take flight and failed miserably, I can hand over the receipt while looking suitably hurt. She can then buy something for herself, giving her the perfect excuse to invade the January sales.

If you’re a guy who thinks this approach is unromantic, I can only assume you’re single, or you don’t know your partner that well.

Logistical Planning

Assuming Christmas shopping weather conditions are optimal, my role in the entire operation comes down to

ensuring my partner and I stop for sustenance somewhere warm and cozy at least three times during the day. Speaking only for myself, I will also make sure I remember to use the restroom every time we stop.

Forgive me if I’m gender stereotyping, but most men are not that keen on shopping unless it involves mobile phones, computers, and other gadgets, or vintage vinyl. Consequently, we spend a lot of time in the run-up to Christmas standing around in overheated shops feigning interest.

Over the years, I’ve learned which Budapest stores have the best seating. The COS stores on Andrássy út and Deák Ferenc utca have sofas so comfortable you won’t want to stand up from them.

At the other end of the seating spectrum, Michael Kors and Guess on Andrássy have those horrible backless coffee-table height poufs that make you hunch over like Quasimodo when you sit on them.

Staying on the comfortable seating theme, this is one of the factors that determine my choice of where to have breakfast, luncheon, pause for a pickme-up and dine.

Rather than recommending my personal favorite establishment for those all-important sustenance breaks, please allow me to offer broad criteria.

Carb Stockpiling

For breakfast, avoid Scandinavianstyle cafés, especially healthy food places. When you’ve got a long day’s schlepping ahead of you, you don’t need vegan, sugar-free, gluten-free anything. What you want are plenty of carbohydrates and a good dollop of grease to keep you warm. By the end of the day, you’ll have done well over 10,000 steps in any case.

Incidentally, according to the American Council on Science and Health, the 10,000-step target has nothing to do with science. In 1965, a Japanese company introduced a step counter named Manpo-Kei, which translates into “10,000 meters.” They marketed this with the slogan, “Let’s walk 10,000 steps a day.” The 10,000-step target caught on because the slogan was memorable, and the number was nice and round.

For lunch, follow the same principle as breakfast but try not to eat too much as you’ll find yourself wanting to lie down. After years of experience, I recommend a hearty, warming Hungarian soup in an establishment that ideally has banquettes so you can rest your back and shoulders if necessary.

“My partner thinks that one of my roles in life is to carry shopping bags. So, after a morning’s shopping, I tend to resemble an overloaded packhorse trekking up a Peruvian mountain. I need all the support I can get.”

My partner thinks that one of my roles in life is to carry shopping bags. So, after a morning’s shopping, I tend to resemble an overloaded packhorse trekking up a Peruvian mountain. I need all the support I can get.

If you’re like me, you’ll want to rest again as it begins to get dark and the temperature starts to drop, currently around 4 p.m. You have the option of afternoon coffee and cake, thereby boosting your energy levels, or of ducking into a bar.

Only choose the second option if you are confident your partner is on the verge of having had enough and that a large glass of rosé will tip her over the edge and put an end to your torture. Tipsiness and shopping don’t mix. Believe me.

When it’s time to dine, all bets are off. Personally, I pick somewhere Hungarian. After a long day walking around in the cold laden with bags, healthy doesn’t cut it.

DAVID HOLZER

Photo by Lucigerma / Shutterstock.com

2023 Burns Supper Tickets go on Sale as 2022 Projects Detailed

With tickets having just gone on sale for the 26th Budapest Burns Supper on the evening of January 28, 2023, the organizing Robert Burns International Foundation has been reporting back on where it says the HUF 11.5 million that was raised at the 2022 event has been spent.

“The RBIF supported seven different projects in five different cities during 2022,” says RBIF board chairman Douglas Arnott. An e-letter has gone out to corporate sponsors and those who donated to the raffle and auction detailing the projects supported this year.

The projects are the Peter Cerny Foundation, Budapest (medical equipment for its fleet of premature baby ambulances); Mezőtúr Hospital Children’s Department, JászNagykun-Szolnok County (airconditioning for the central ward area); Sándor Péterfy Hospital Newborn and Infant Department, Budapest (Babylife BLF-2001G incubators for premature babies); Csongrád-Csanád County Hospital Pediatric Department, Hódmezővásárhely (Neopuff infant resuscitation device); Semmelweis University 2nd Dept. of Pediatrics, Budapest (Connex Spot Monitor, pressure-relieving mattresses);

Szent Rafael Hospital Pediatric Department, Zalaegerszeg (Nihon Kohden multi-functional Life Scope bedside monitor); and the Csolnoky Ferenc Hospital Infant and Child Department, Veszprém (air-conditioning equipment and a fridge for storing vaccines, project still in progress).

The individual projects have “helped, in different ways, to raise the standard of pediatric medical care in Hungary,” the chairman says.

Traditional Celebrations

Robert (Rabbie) Burns, who lived from 1759 until July 21, 1796, is known as the National Poet of Scotland. The Saturday closest

Veszprém to Launch its European Capital of Culture Year on January 21

The city of Veszprém, home to a population of 60,000 and located some 120 km south-west of Budapest, will officially begin its year as the European Capital of Culture (ECoC) on January 21-22, 2023, leaders of the project told a press conference in Budapest on November 24.

Dubbed “Shine, Veszprém,” the opening ceremony will celebrate both the Day of Hungarian Culture and the 200th anniversary of Ferency Kölcsey penning his poem “Himnusz” (later adopted as the text for the Hungarian national anthem) as the prelude to 12 months of events and festivities ranging from concerts and avant-garde theater to poetry, dance and ecological awareness seminars. Naturally, given the importance of viniculture in the region, great emphasis is also placed on wine and the culinary arts. But while the city’s ECoC year is, on the surface, about the appreciation and enjoyment of the arts and culture, the project is

also very much about the long-term generation, or regeneration, of the city’s commercial life and overall liveability, Zoltán Mészáros, chief adviser to ECoC, stressed in his opening remarks.

“All small towns lose their young people, which is a natural process because many go to universities elsewhere, and these towns are not very successful in re-attracting their youth. If we ask ourselves why these towns are not attractive enough, it’s because the downtown areas of these small towns are boring,” he said.

The ECoC project leadership has been mindful of this issue from the beginning, Mészáros underlined, citing, for example, its efforts to address the lack of breakfast facilities in the city.

Breakfast at Veszprém

“There were [until the advent of ECoC ] no places to have breakfast downtown, now there are five such outlets, and all of those have received some support and subsidy through the ECoC program because these services may not have [been viable] to start based on market forces,” he said.

Using the ECoC program to provide this initial impetus, the project leaders envisage such facilities will become standalone commercial operations valued by the general population in the long term.

“This is a basic, central thought behind [the EcoC program],” Mészáros underlined.

As part of its winning bid to be chosen as the European City of Culture, Veszprém planned from the beginning to

to his birthday, January 25, is traditionally marked with a Burns Supper in his honor.

It often follows a traditional form, including a meal of haggis with “champit neeps and tatties” (mashed swede and potatoes), the “Address to the Haggis” (one of Burns’ poems), the odd whisky or two, and traditional Scottish dancing and pipes and drums. With sponsors meeting the costs of the dinner in Budapest, the event here adds fundraising to the mix for its 300-plus guests. Tickets for the 2023 event are available through the foundation website, rbif.hu, which also includes more information on the supported projects and previous Suppers, and copies of its audited fundraising.

The Robert Burns International Foundation is a voluntary and overheadfree organization that has raised funds for child healthcare in Hungary since 1998. According to its website, it has completed 150-plus projects, supporting 30-plus hospitals across the country, and has attracted more than 5,000 sponsors.

A six-person board (full disclosure: Robin Marshall, editor-in-chief of the Budapest Business Journal, is a member) runs the RBIF. Accounting and the audit are handled by Moore Hungary and KPMG, respectively, as sponsors, ensuring transparency. Its patrons are the U.K. Ambassador to Hungary and the Hungarian Ambassador to the United Kingdom.

include towns and villages of the nearby Lake Balaton and Bakony hills in the programs, and more than 120 locations in total have signed up to host events within the EcoC framework. (Indeed, the overall project has been officially branded as the Veszprem-Balaton 2023 European Capital of Culture Program.)

“Balaton is a national treasure, one of the most important natural and social features of Hungary,” János Can Togay, film director and ECoC chief artistic and creative adviser, told the press conference. “Veszprem is one of the most important communities of the Balaton region, so it’s our goal to ensure that the very colorful and varied Balaton attractions should be coupled with Veszprém in ECoC to ensure we are never at a loss as to what to do on a winter Tuesday evening, should we not wish to stay at home,” he added.

KESTER EDDY

Zoltán Mészáros, chief adviser to ECoC.

János Can Togay, ECoC chief artistic and creative adviser.

The Emergence of Magyar Franc Goes Well Beyond Villány

grape for winemaking. Nevertheless, Cabernet Franc’s subtlety is now its strength, and it is experiencing a rise in popularity across the winemaking world as palates seek something smoother and softer. Hungarian Cabernet Franc is well poised to meet this demand, and Villányi Franc has already established a good reputation.

Franc, this time from the Tolna wine region close to Szekszárd: Simigh Családi Pincészet ’s 2017.

Limited Edition

After Szekszárd Grand, the next highest-placed red wine (at number 23) in the Winelovers 100 was Zsolt Maul’s Lator 2018 from Villány, whose name is a play on Bordeaux first growth Chateau Latour. It is made from Cabernet Franc and is full-bodied and incredibly layered. It has sufficient structure to handle the high (15%) alcohol, leading to a very long and smooth finish without any real burning sensation. It also won a gold medal at the Challenge International du Vin 2021 and costs HUF 9,500 from www.maul.hu.

Owner-winemaker Zsolt Maul was immensely proud of the intense, fullbodied style when I ran into him on his wine terrace in the center of the town of Villány. And why shouldn’t he be, given the success of such a wine?

Big Guns, Big Wine

The seventh edition of the Franc & Franc Nemzetközi konferencia és kóstolónap (International Conference and Tasting Day) took place in Villány over the Thanksgiving weekend, attracting wine people from far and wide to analyze, assess and enjoy wine made from the Cabernet Franc grape. ADVERTISEMENT

The next highest placed red, at #42, was from the northwest of Hungary: Pannonhalmi Főapátság ’s Infusio 2019. This vintage had more Cabernet Franc (40%) than usual, with Merlot contributing 60%. The limited-edition wine always sells out quickly, and the 2020, which has the same ratio between the grapes, has just been released in time for Christmas at HUF 11,500 from Bortársaság.

From Szekszárd, Takler Borbirtok ’s expressive and varietally pure SzentaHegy Cabernet Franc 2018 took 52nd place (HUF 6,450 from idrinks.hu), behind Vylyan ’s Villányi Franc 45th place.

Interestingly, Cabernet Franc thrives on both sides of Lake Balaton. From the Balatonboglár region on the southern

shore, the 2018 vintage marked the second single varietal bottling from the Sínai hegy vineyard. The wine has excellent concentration but delicious fruitiness, freshness and spiciness, too, with 15 months of oak aging in 500-liter barrels. This came in at number 70 in the Winelovers 100 and is terrific value at HUF 4,450 from garamvariszolobirtok.hu.

Back in its native France, it is only really in the Loire where Cabernet Franc is given a starring role in the single varietal wines of Chinon and Bourgueil, among others. For Cabernet Franc made in the leaner, leafier Loire style, check out Mörk Pincészet , on the northern side of the lake in Balatonakali. Its 2019 vintage costs HUF 2,500 from borpont.com.

And what about Cabernet Sauvignon, whose parents have been identified as Cabernet Franc and Sauvignon Blanc? For a long time, Cabernet Sauvignon often struggled to reach optimal ripeness in Hungary, being green in cooler vintages but excellent in others, while question marks remained over the quality of the clones. Rising temperatures have seen much riper wines that can stand alone, without the support of Franc, and Szekszárd, for example, is now swimming with super juicy specimens.

The Villány region has successfully created the Villányi Franc brand, which is now gaining traction internationally. It has its origins in the observations of the legendary Michael Broadbent, long-time fine wine auctioneer for Christie’s, who passed away in March 2020 at the age of 93.

On visiting Villány in 2000, Broadbent proclaimed that Cabernet Franc had found its natural home. That may be so, but it is not only in this southern Hungarian region that the French grape thrives. The truth is that the Cabernet Franc grape is being used to make outstanding single-varietal red wine in many of Hungary’s regions. These structured, medium- to fairly full-bodied wines make for ideal winter imbibing, and the grape is also a contributor to many blends, including Bikavér.

The 2022 edition of Winelovers 100 legjobb Magyar Bor (100 best Hungarian wines) saw lots of Cabernet Franc make the listing, along with blends featuring it. Indeed, while the Top 20 was almost totally dominated by sweet wine, the top-placed red, and the only one to break into the top 10 in ninth place, was Eszterbauer Borászat’s Szekszárd Grand 2017. This is a blend of 25% of each Kékfrankos, Merlot, Cabernet Sauvignon and Cabernet Franc.

Incidentally, it is notable how the more concentrated Cabernet Sauvignon has been much more coveted internationally, becoming the world’s most-planted

In what has often been something of an uncomfortable standoff with Villány winemakers, many wine critics have blasted the big guns of Villány for being too overpowering, tannic, high in alcohol and overly oaky. However, in Maul’s Lator, everything is nicely balanced and beautifully integrated. It doesn’t matter that the alcohol is on the high side, and it is, indeed, reflective of its warm place of growth.

Villány’s vintners have, I feel, listened to the feedback and toned things down a touch in recent years, including tempering the tannins to enhance the elegance. And having said all of that, many of the American wine tourists I’ve guided down in Villány can’t get enough of the big wines for which Villány has become famous and then, perhaps, infamous.

Master of Wine Peter McCombie told the Budapest Business Journal that the two worlds of big, robust Cab Francs (on which Villány’s reputation was built but which is getting tiring for some) and a new, fresher, lighter style could peacefully co-exist. He also said that a touch of leafiness or herbaceousness, suggesting less ripeness rather than a lack of ripeness, makes for a good Cabernet Franc.

From Szekszárd, Vesztergombi Pince ’s Alpha 2017, 24th in the Winelovers 100, features Cabernet Franc in a blend with Cabernet Sauvignon, Merlot and Syrah. At number 26 came another Villány Franc (Jammertal ’s Cassiopeia Cabernet Franc 2012), with a Villány Merlot (Günzer Tamás ’ Grandior Merlot 2019) claiming 28th position. After that, the next red wine (#39) was another Cab

ROBERT SMYTH