Hungary’s tobacco scandal

It started off a possible good idea – at least to those who think a state monopoly is a good idea. The government of Viktor Orban, the new-idea-a-minute Hungarian prime minister, decided around Christmas that tobacco products would be sold only in government-franchised shops. Talk was of “helping create Magyar family businesses” while at the same time restricting the outlets for tobacco products, and thereby making it harder for Hungarian youth to catch the habit.

Seasoned Orban-watchers certainly had their doubts as to how this would all work out – to say that business friends of his Fidesz party have been favoured in the past three years would be an understatement. Sure enough, around Easter, the names of the winners of the franchises were released, resulting in uproar, with many being linked to friends or family of prominent Fidesz members, and fellow travellers.

“It’s no wonder everyone’s in uproar,” says Laci, a mason-cum-plumber from Nagykata, a small town 40 miles east of Budapest, who declines to give his full name. “This isn’t a case of National Tobacco Shops, it’s the National Tobacco Mates and Cronies – some of these Fidesz favourites have got five shops. I’ve seen it on TV news,” he says, sitting in the sun near a market in Budapest’s wealthy second district – naturally enough, having a smoke.

Around 3,200 applicants have been granted nearly 5,300 licenses to sell tobacco products – along with lottery tickets, alcoholic beverages, soft drinks, newspapers and ice cream – the latter products all added after the tender closed for applications.

Nepszabadsag, the leading left-liberal national daily, reported early on that at least 650 licenses were awarded to known Fidesz supporters, their family or associated companies.

In Szekszard, a town 70 miles south-west of Budapest, one local Fidesz party member broke ranks, and told HVG, a leading independent weekly, that pressure had been exerted on the local council to award licenses to Fidesz supporters.

Efforts by opposition parties to make the basis of awards transparent were rebuffed by governing MP s, who filed a private member’s bill to restrict access to information.

“The national tobacco shops [scheme] issue is simply outrageous. And it’s not the usual opposition we-must-criticize-the-government talk: with this issue Fidesz has finally proved – not we have had too much doubt in the past years – that fair and clear tender procedure doesn’t mean squat to them,” Timea Szabo, MP and co-president of Dialogue for Hungary, a break-away left-green group in the Hungarian parliament, told beyondbrics.

The upheaval in tobacco retailing will hit Hungarian smokers, like Laci, in the pocket. He takes his first puff at 4:15am, when he gets up to travel to the Hungarian capital for work, and smokes around 20 a day. He shows the western brand pack, which cost him, until Monday, when the new system of shops opens up, Ft 780 (€2.65). “It’s going to be whole lot more, between Ft 900 – 960, so I’ve heard, that’s at least 15 per cent more,” he says.

The new system is certainly unpopular with the public: one poll found over 60 per cent of Hungarians would like to see it annulled. Despite this, Fidesz remains Hungary’s best-supported party, favoured by 30 per cent of voters.

Laci, however, is not one of them.

“I’m not linked to any party,” he says.

Is he afraid of giving his full name?

“In this world today, my first name is enough. Maybe someone from the National Guard [a banned right-wing, unarmed militia] will come and take a pop at me.” He’s laughing, but still declines to reveal his surname.

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