From the 2026 budget audit
State-owned companies under a food-safety regulator — funded by annual appropriation.
NÉBIH holds ownership of trading companies funded through a 500 millió Ft budget line. Companies that run commercial activities belong in private hands; genuine supervisory functions belong inside NÉBIH.
Roughly 122 Ft per taxpayer per year — 500 millió Ft total — for state-owned companies whose losses, if any, are met by next year's appropriation rather than by an owner bearing the cost.
What you see — and what you don't
The seen: companies operating under state ownership within Hungary's food-chain supervisory infrastructure, funded by annual appropriation. The unseen: the soft budget constraint — when a state-owned company makes a loss, the appropriation grows rather than the company being disciplined. Private owners bear the cost of bad decisions; this structure shifts that cost to the taxpayer.
Objection
"Food-chain supervision requires specialised technical capacity that only state-owned entities can maintain reliably."
Answer
Where these companies perform a genuine delegated supervisory function, that function belongs inside NÉBIH — the supervision is the public function, not the corporate wrapper around it. Where they perform commercial activity, there is no case for state ownership: private firms provide specialised technical services under contract throughout the food chain. The three-year phase-out resolves each company into either the NÉBIH core or private ownership.
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The analyst's verdict
Funding to companies under NÉBIH ownership
Rationale
This line funds companies held under NÉBIH's ownership rights. State ownership of trading companies is the same calculation difficulty seen in the stud-farm line: a company funded by an annual appropriation rather than by market revenue and the discipline of private equity faces a soft budget constraint — a loss is met by next year's allocation rather than by the owner's exposure. Where these companies perform a genuine delegated supervisory function tied to NÉBIH's food-chain mandate, that function should be performed inside NÉBIH and funded through the supervision line. Where they perform commercial activity, the state ownership should be divested. Phase out the funding line over three years, resolving each company into either the NÉBIH core function or private ownership.
Transition mechanism
Phase-out over 3 years. Review each company: delegated supervisory functions absorbed into NÉBIH; commercial activities divested under an SOE-Act-style commercial-mandate-then-sale process.
Affected groups
The companies and their staff; NÉBIH, which absorbs any genuine supervisory function.
Free Society Institute
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