Hungary in Europe

1. Cooperation andsolutions in agriculture2009The Hungarian milk market and the Global economic crises

2. Hungary in Europe

3. General Introduction to the Hungarian milk market • Animal Stock

4. Animal Stock

5. General Introduction to the Hungarian milk market • Animal Stock • Number of Sites

6. Number of Sites

7. General Introduction to the Hungarian milk market • Animal Stock • Number of Sites • Milk quotes

8. Milk quotes

9. General Introduction to the Hungarian milk market • Animal Stock • Number of Sites • Milk quota • Milk production

10. Milk production (million liters)

11. General Introduction to the Hungarian milk market • Animal Stock • Number of Sites • Milk quota • Milk production • Raw milk buy-out

12. Average prices of raw milk buy-out

13. The number of Milk Processors in Hungary Concentration among the processors

14. Top 5 in Hungary (net revenues)

15. New participants –new roles Alföldi Tej enters the market International Companies are overshadowed

16. Challenges that milk processors are facing • Market Challenges • Decrease in Demand the global economic crises affects Hungary more seriously because of the high state debt high budget deficit lack of anti-cyclic economic policy Østate spending øtax decreaseøinterest rate decrease

17. History of Milk Product Sales(2008) Forrás: GfK Hungária, Consumer Tracking

18. Challenges that milk processors are facing In some product categories 40-50% • Import Pressure high import ratio unsettled European market International chains with Eastern and Central European markets secure their home industry’s support Overproduction because of weakened quota regulations meets decreased demand Low efficiency of market regulation tools

19. Market share of domestic and importedmilk (UHT) Weaker HUF Forrás: GfK Hungária, Consumer Tracking Collective measures in quality control for domestic and imported goods

20. Challenges that milk processorsare facing c) Strong Chains 1. hypermarkets Plus supermarkets! 2. wholesale 3. supermarkets Forrás: GfK Consumer Tracking, és GfK szakértői becslés 2013.

21. Ethical CodexAdaptation Concentration - price - flexibility - supply

22. Milk Processor Concentration (revenue)

23. II. Problems of Financing • Changed bank credit policy • Increasing costs of interests On base of HUF and foreign currency as well (companies’ lossof ~20% on foreign currency credits) • Hungary’s position has weakened internationally increased financial imposition in export trade HDB’s credit guarantee program could help

24. III. Problems of Tendering Slow, prefers producers to processors Without competitive FOOD INDUSTRY there is no competitive AGRICULTURE

25. IV. Possible damage of the producers’ base due to low price • High raw milk export ratio • The landownership is not solved • Investment has stopped because of lack of financing • This years dry weather is making producers situation even worse

26. V. Increase in the number of partners who do not pay • General lack of trust because of mutual debts ! Legislacy needs to be changed

27. V. Prospects in the next few years SWOT analysis

28. SWOT analysis Kereskedelmi márkák térhódítása

29. Thank You for Your Attention! Koller Attila Chief Executive Tolnatej Zrt.