Hungary blocked Greek Dairy bid. Credit: Flickr / Noo prima Dairy / CC BY SA 2-0The Hungarian authorities has blocked the planned takeover of Alfoldi Tej Kft by Greece’s Hellenic Dairies Group, contempt the woody having already received shareholder approval.
The acquisition was to beryllium executed done the group’s Romanian subsidiary, but the medication of Prime Minister Viktor Orbán stepped in, arguing that the determination could undermine Hungary’s nutrient supply. Officials claimed the woody risked diverting earthy beverage retired of the state and could yet permission Hungarian consumers babelike connected much costly dairy imports.
Hungary’s Ministry of National Economy framed the determination arsenic a substance of nationalist interest, describing the extortion of the country’s nutrient proviso arsenic “paramount” and informing that the transaction posed “significant risks” to the sector.
Greek Group’s Expansion Plans
For Hellenic Dairies, 1 of Greece’s largest dairy producers, the rejection marks a setback successful its strategy to grow crossed Central and Eastern Europe.
Company executives said their connection had included a elaborate program to modernize Alfoldi Tej, which has been loss-making successful caller years.
The program called for important concern successful infrastructure and equipment, arsenic good arsenic caller merchandise lines designed to fortify the Hungarian company’s marketplace position.
According to sources adjacent to the group, the goals included:
- Sustaining and expanding Alfoldi Tej’s home operations,
- Diversifying its merchandise portfolio,
- Supporting Hungary’s dairy farmers,
- Upgrading accumulation facilities with important superior spending.
The Greek radical argued that the woody would person secured, not weakened, Hungary’s dairy industry. Alfoldi Tej presently accounts for astir 20% of the country’s earthy beverage purchases.
Questions Over Motives
Market analysts person raised doubts astir the government’s reasoning, suggesting that the food-security statement whitethorn person masked different motives. Industry insiders did not regularisation retired the anticipation of unit from home competitors who stood to suffer if the Greek radical expanded its beingness successful Hungary.
Profile of Alfoldi Tej
Alfoldi Tej Kft, 1 of Hungary’s starring dairy companies, employs much than 700 unit and processes adjacent to 270 cardinal liters of beverage annually. According to section reports, the institution generated income of astir €190 cardinal ($203 million) past twelvemonth but has posted losses since 2021.
The steadfast operates 2 plants — 1 successful Székesfehérvár, successful cardinal Hungary, and different successful Debrecen, successful the east. Its brands see Magyar Tej, Riska, the health-oriented Pure Milk, and Meses, a children’s line.
Greek Dairy’s wider ambitions
The blocked transaction underscores some the scope and the limits of Hellenic Dairies’ enlargement strategy. In caller years, the radical has grown aggressively done acquisitions successful Romania, Bulgaria, and Cyprus, portion consolidating its beingness successful Greece with the acquisition of Dodoni, different starring dairy brand.
The illness of the Hungarian woody highlights the geopolitical sensitivities that progressively situation nutrient accumulation and overseas concern successful Central Europe. For Hellenic Dairies, it is simply a reminder that cross-border maturation ambitions tin beryllium reshaped not conscionable by marketplace forces, but by governmental ones.
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