Health consciousness is the only factor which can counter the sudden urge felt by consumers to economise on food spending. The price of milk started to drop in February, after a rise in demand and price last year. According to some estimates, a surplus of 20-30 million litres has been produced in Hungary. The situation is similar in Germany and Austria, where prices are 30-32 cents higher than in Hungary. However, price is 25 cents lower in Slovakia and in our southern neighbours, which makes them a source of cheap UHT products. According to the GfK Consumer Tracking survey given to us by MONA Hungary, imports account for nearly 60 percent of the UHT segment and only one-sixth of this quantity has been marketed under private labels. – The quality of these products is not the best . says Bernadett Strasser-Kátai, managing director of MONA Hungary Kft. Per capita consumption of milk and dairy products is still low. – It would be very helpful, if the government started promoting the school milk program again – says dr. János Galambos, managing director of Nádudvari Élelmiszer-ipari Kft. Demand continues to get increasingly polarised. There is demand for premium quality, but added value is required to justify higher price. However, a reduction of consumption is the general trend. According to Emese Zágor, marketing director of Pannontej Zrt, they do not expect to see a long term reduction in consumption. – We see a shift in demand towards cheaper products, but we hope that this is only a temporary phenomenon and consumers will soon return to their favourite brands – she explains. – Higher production costs will soon appear in the prices of all manufacturers and this is a serious challenge for the sector – says Péter Szautner Péter, marketing and business development director of Friesland Hungária zRt. Yoghurt drinks are however, a positive exception, producing double digit expansion in 2008. As a result of growing health consciousness, the yoghurt category has avoided the general drop in demand. According to a global survey by Nielsen (Consumer Confidence, Concerns, Spending and Attitudes to Recession), though consumer confidence in Hungary is among the lowest, we are in fourth place among 51 countries regarding health consciousness. The intensive spending on advertising by Danone has probably played a part in this. Friesland has been focusing on three leading brands (Milli, Pöttyös, Completa) for years. BTL and especially in-store activities have been a priority for them. – We are highly satisfied with the results of the Pöttyös promotional campaign conducted in the spring – adds Péter Szautner. Pannontej has introduced innovations for several of its brands this year. – We have brought new momentum into the circular box segment with our modernised Medve product line says Emese Zágor. They are also launching innovations like the limited edition „Flavours of Nations” and the Mexican and Provance products. MONA Hungary also has several innovations for next year. – According to our surveys, consumption can be boosted in some categories, primarily yoghurt – says Bernadett Strasser-Kátai. They continue to rely on their Joya and Montice brands, launching new yoghurts under these. Nádudvari Élelmiszer-ipari Kft. is trying to fill market gaps, building a unique image, which is different from that of multinational competitors. Registering the slogan „Without added E number” has been an important step in this direction. – Our special location in the Hortobágy plain allows us to target health conscious consumers – says János Glambos. Importers are also trying to keep up with current trends. Maresi Foodbroker Kft.is a good example. They keep consistently developing the Campina assortment and focusing on the Optiwell product line. As BTL activities have dominated the communication of Campina in the past, there is nothing new for this brand in the increased focus on in-store activities, which will be complemented by and Internet campaign a prize game in the autumn.