Hungary Blocks Foreign Acquisition of Dairy Firm Over Food Security Concerns

A government statement issued by the Ministry of National Economy noted that a takeover approach was received in June from a "foreign-owned group of companies." However, the Ministry "banned the acquisition" to ensure the "security of food supply for Hungarian families," deeming the transaction a significant risk. As a compromise, Alföldi Tej suggested transferring the cooperative into state ownership under the same conditions as the foreign takeover, a proposal currently under government review.

The Ministry of Agriculture and the Milk Product Council, representing the dairy industry, have supported the government's stance against the overseas acquisition, emphasizing concerns over market disruption and the potential decrease in domestic processing capabilities. Alföldi Tej holds a substantial market share, accounting for nearly 20% of the domestic raw milk purchases from local farmers. Its acquisition by foreign entities could disrupt domestic milk production and purchases, and pose high risks to supply security. The co-op's significant operations include two plants and ownership of brands like Magyar Tej and Riska, alongside smaller product lines. Annually, Alföldi Tej processes approximately 270 million litres of milk supplied by 59 farmers. The company employs over 700 people across its operations in Székesfehérvár and Debrecen.