HUNGARY: Dreher profits knocked back by austerity measures
SABMiller's Hungarian subsidiary has warned that recent economic and political developments in the country will hit profits this year by almost a third.
At a press briefing in Hungary today (25 September), the managing director of Dreher Breweries, Hector Gorosabel, said that the introduction of the country's 'austerity programme' this year would take about 30% off the unit's profits in 2006.
"We knew it was going to be a tough year," Gorosabel said, "but we didn't have an appreciation of the extent of it."
Gorosabel was quick to add, however, that the unit will offset the drop through pre-planned measures. "We feel pretty confident that we can offset the points of the austerity programme," he said. "Due to our cost-managing programme, we expect to hit our forecasted figures, which we announced in January."
Among the measures introduced as part of the country's austerity programme are a 7% hike in excise taxes, a rise in corporation tax from 15% to 25% and an increase in employer healthcare contributions from 4% to 6%.
Dreher has reduced its workforce by around 10% in recent years, Gorosabel noted.
Hungary has hit the headlines in the last week, with protestors calling for the resignation of the president following the leaking of a transcript in which he said the government had been lying to the populace.
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