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14B HUF to Save Small Village Grocery Shops

Ábrahám Vass 2020.01.13.

A yearly amount of around 12-14 billion HUF (Eur 36-42 million) of state subsidies would save small grocery stores in the municipalities under 2,000 residents, according to the calculation of ÁFEOSZ-COOP Association’s president Zs. Zoltán Szőke, Napi.hu reports.

ÁFEOSZ-COOP is the umbrella organization of most of the smaller grocery shops operating in the villages. At the moment, it is present in 1600 different, mostly smaller municipalities and has long been facing issues with the growing running costs and decreasing incomes.

Only in the first half of 2019, 1174 retail shops closed while the number of those settlements which lack grocery shops increased from 58 (in 2005) to 284 over the course of the last 13 years, Napi.hu reports.

According to Szőke, the government now intends to provide financial assistance to these grocery shops. A team of experts from multiple ministries have been working on the solution for months with the aim to develop a form of support that also complies with EU rules, since the EU prohibits states to grant sectoral support on the level of wages and benefits as to prevent unfair market advantage. A potential way to proceed would be to ensure that all the market participants undergo the same support conditions.

Meanwhile, liberal economic investigative site G7 doubts that these stores should be saved “artificially,” because it contradicts market rules. In their analysis, they speculate that the fate of a large part of the subsidy would be doubtful and obscorous, and wouldn’t inspire owners for innovation and effective changes and measures. They argue that mobility and public transport should be impoved instead so that villaggers could more easily reach larger municipalities and take care of their business there.

However, it cannot be questioned that local grocery stores, as well as churches, pubs, and schools play a major role in the survival of small settlements as they make living more comfortable, and thus help people avoid leaving those villages.

featured image via Pixabay