Hungary says it will sue Austrian supermarket chain Spar for defamation (updated)

Spar

25/04/2024 12:08

(Adds background in paragraphs 2-8, quote in paragraph 2)
       BUDAPEST, April 25 (Reuters) - Hungary's government
plans to sue Austrian supermarket chain Spar for defamation,
Prime minister Viktor Orban's chief of staff told a press
conference on Thursday.
    "Proceedings will be opened against Spar, in court, and
presumably for defamation," Gergely Gulyas said.
    Spar did not immediately respond to a request for comment.
    The Austrian government and Spar sent letters to European
Union commissioners in March saying that a special tax 
introduced in 2020 discriminated against foreign retailers in
Hungary, and was therefore in breach of EU law. 
    The European Commission said on April 5 that it was looking
into the complaints and will "ensure appropriate follow-up".
    Taxes on retailers in Hungary have increased to as much as
4.5% of revenue since the government announced the special tax,
Spar Austria CEO Hans Reisch said in the letters dated March 4,
11 and 20.
    "Foreign-owned retailers, including SPAR Hungary... face the
highest tax bracket of the special tax," Reisch wrote in a
letter seen by Reuters, adding that Hungarian competitors
operating in franchise chains consistently benefit from a lower
tax rate up to 1%. 
    The tax forces foreign retailers to operate at a loss
because profit margins in the retail sector are lower than 4.5%,
Reisch said.

 (Reporting by Boldizsar Gyori; Editing by Kirsten Donovan)
 ((Boldizsar.Gyori@thomsonreuters.com;))