Restructuring and re-regulation of the Hungarian tobacco market

Laki, Mihály (2015) Restructuring and re-regulation of the Hungarian tobacco market. Corvinus Journal of Sociology and Social Policy, 6 (2). pp. 39-71. DOI 10.14267/cjssp.2015.02.03

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This case study deals with the conditions and impacts of the implementation of Law CXXIV (2012) which has radically changed the regulation that applies to the Hungarian market for tobacco products. The new regulation promised to provide significant political benefits for the ruling coalition because the majority of the population support the proposition that smoking by the young generation should be prevented. This is the reason why the Hungarian government and the national assembly played a significant role in the remarkable modification of the regulation of this market. Another important factor in this development was that one of the decisive market players – by mobilizing its political influence and connections – was involved in the legislative process from its very beginning. The efforts of candidates close to power (who wanted to enter this market) were not coordinated, but these players expected to receive good support from decision makers. But the new regulation was subject to a number of flaws and demonstrations. As a result of the new legislation there remained 1500 settlements without a shop for tobacco sales. This unexpected development and the high and growing number of loss-making tobacco shops forced the government (and the state company responsible for the tobacco market) to modify permanently the regulation after only a short period of time. The main reason for the disturbances in the market was the administrative restructuring of the market for tobacco products.

Item Type:Article
Uncontrolled Keywords:market regulation, regulatory bargain, unexpected regulatory effects
JEL classification:K20 - Regulation and Business Law: General
Commerce and tourism
Projects:OTKA K101727
ID Code:2888
Deposited By: Ádám Hoffmann
Deposited On:31 May 2017 07:17
Last Modified:04 Nov 2021 12:00

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