Atlatszo won lawsuit to discover how much the nationalisation of the Alföld Printing House cost for the taxpayers
One of the last steps in the nationalisation of the textbook market was the acquisition of Alföldi Printing House (Alföldi Nyomda Zrt.), so that 80% of Hungarian textbooks can be produced in a patriotic spirit. However, the amount paid for the printing company was not disclosed, so we sued the KELLO Library Supply Nonprofit Kft., responsible for the national supply of textbooks. After lengthy litigation, the state-owned company finally sent us the sale agreement, which stated that the purchase price of the Alföld Printing House was 4.5 billion HUF. In the meantime, the government has amended the law on the supply of textbooks, so KELLO now orders textbooks from the state-owned printing house without public procurement.
The Library Supply Nonprofit Ltd (KELLO), owned by the Hungarian state, bought Alföldi Nyomda Zrt. in 2020, but the purchase price was not disclosed, so we requested information from the Library Supply Nonprofit Ltd. through a FOI request. This is the company that has been the sole provider of textbook ordering and delivery to schools since 2013. As the purchase price was not disclosed, we went to court to obtain the data.
We won the case at first and second instance, but KELLO did not accept the decision and filed an appeal with the highest judicial body, the Curia. However, after one and a half year, the Curia also ruled in our favour, so the state-owned company had to disclose the purchase price. Secrecy has not been cheap for KELLO: they had to pay a total of 300 000 HUF in legal costs.
FOI lawsuit won by Atlatszo on the nationalisation of a printing company
One and a half years ago, we sued the Library Supply Nonprofit (KELLO) Ltd., responsible for the national supply of textbooks, because they did not disclose the price for which they bought the Alföldi Printing House in Debrecen. We won the case at first and second instance and finally at the Curia.
The purchase price is 4,5 billion HUF
The sale and purchase agreement signed in June 2020, as obtained by Átlátszó, is almost 100 pages long, including annexes. According to the document, the purchase price of Alföldi Nyomda Zrt. is 4.5 billion HUF :
- 3 billion 375 million HUF as the first tranche
- Secondly, 500 million HUF (subject to certain conditions)
- and finally, 625 million HUF (subject to certain conditions)
The last payment was made conditional on the company’s profit after tax for 2020 reaching the profit after tax for 2019. The payment of the 625 million HUF was made on this basis until the end of June 2021.
Industry experts interviewed by G7 in 2020 estimated the purchase price at HUF 4-6 billion, which could still be justified. According to the newspaper, the assets of Alföldi Nyomda, including the rather valuable property in the centre of Debrecen, where their plant is currently located, could have had some influence on the price.
In our FOI request, the purchase price of these plots of land in Debrecen was also requested. This information was not provided separately, so we assume that it is included in the above price. (According to the title deeds, the owner of the land is Alföldi Nyomda Zrt.)
The exact price of the properties was not disclosed in the agreement either. If we look at the accounts of the acquiring company, KELLO, for 2020, we find that the gross value of its real estate increased by HUF 1.68 billion in that year (of which land by HUF 681 million and buildings by HUF 954 million).
No more public procurement for textbooks
Géza György, the former owner of Alföldi Nyomda Zrt., continues to hold the position of CEO of the company. Last year, he gave an interview to Radio Europe in which he pointed out that KELLO now orders textbooks from Alföldi Nyomda without public procurement. This is because on 27 December 2021, the government appointed it to produce the textbooks for reasons of national strategy. The company had previously bid for public contracts with consortium partners.
If we look in the Hungarian Gazette, we can the amendment mentioned by the CEO:
the Hungarian state has designated Alföldi Nyomda Zrt. as the company responsible for the production of the textbooks.
Although the price of paper doubled in the difficult economic situation caused by the COVID-19 pandemic and the war, the price of textbooks did not increase.
Free textbook guaranteed
The Alföldi Printing House is the centre of textbook production in Hungary: more than 10 million books and workbooks are produced there out of 13 million. The acquisition of the printing house was one of the last steps in the nationalisation of the textbook market. It was also much needed to ensure free textbooks, which the government can campaign for widely.
The nationalised textbook market has three legs: publishing, distribution, and printing. In practice, the textbooks published by the Education Office are produced in the printing house in the Alföldi and can be purchased from KELLO. Distribution was nationalised back in 2013. Since then, KELLO has been the sole provider of textbook ordering and school delivery. This move has been ruled by the European Court of Human Rights to have led to a de facto monopoly market.
In the meantime, textbooks from private publishers (e.g. Mozaik), which are recognised by teachers, have been banned from many places, and legal means have been used to this end. Public textbooks have many problems: they are often ideologically biased and often unprofessional.
Translated by Zita Szopkó. The original, more detailed Hungarian version of this article was written by Szilvia Zsilák and can be found here.