Many Hungarian restaurants will be unable to cover the tenfold or higher increase in electricity prices and will have to close, said László Kovács, head of the Hungarian Restaurateurs’ Guild (MVI), during an appearance on commercial television channel RTL on Thursday.
Speaking on RTL’s morning talk show, Kovács said that he is “not aware of any economic model that can offset such a price explosion.” He compared the energy price explosion to an “economic atomic bomb,” as its destructive effect applies to everyone and produces unpredictable consequences.
Kovács called the situation of caterers “catastrophic.” He said that although the year started well, with many restaurants approaching pre-covid traffic, the current energy price explosion changed all of that, and many will now go bankrupt.
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According to Kovács, those who have long-term contracts with utility companies are in a fortunate situation, but even those contracts will expire in 2023-2024. According to him, many restaurants will decide whether to close when the invoices arrive, which are impossible to cover.
“There is a caterer who has so far paid 2 million forints (€5,053) for electricity, but now received a bill for 22 million (€55,587) and is expecting a gas bill of 10 million,” he declared.
Kovács said raising prices is not a solution for entrepreneurs working in the hospitality industry, because there will be no one to come to them. He said there are many restaurants where they limit their selection or hours and hold out as long as they can.
While Hungarian households enjoy state-subsidized utility bills up to an average consumption, enterprises and commercial establishments must pay full commercial prices for gas, electricity, and automotive fuel. That means while Hungarians may have the cheapest gas in all of Europe for households, businesses do not enjoy the same benefit.