Food Industry

Seventy-five to -eighty (75-80) percent of Hungarian agricultural production is processed by the domestic food industry (table 16). The dramatic changes in the economy and also the difficulty of adjustment to the new market conditions at the beginning of the 1990’s have resulted in the transitional decline in the food industry (diagrams 30-36). In certain branches the decrease was significant. At the same time, due to the quick and effective privatisation, the sector has received a considerable amount of foreign capital in the past few years. The ratio of private ownership is dominant (93-94%) and more than half of them are foreign investors, including multi-national companies. These changes had a favourable effect on the structural renewal of the food industry, on investments for the improvement of technology and quality, and on the modernisation of marketing.
    In most of the branches the production volume has been gradually increasing since the years 1994-1995. Any further improvement depends on the expansion of the domestic market, which utilises about 80% of the products of the food industry (table 17). Though domestic consumption has declined, the ratio of food to consumer goods expenditure is still high, about 35% in the average Hungarian households. Exports of processed fgoods haves been increasing continuously over the past four years.
    The forthcoming years are expected to show a continuation of the restructuringe and modernisation of the Hungarian food industry, the improvement in the competitiveness of Hungarian companies, the development of small and medium-sized enterprises and the expanded implementation of quality assurance systems. These are closely related to the preparation programme of the agricultural sector for joining the European Union.