The general objective of this study is to present the main problems, potential outlooks and challenges of the Hungarian dairy sector in connection with the general social and economic situation. Problems that have been implicated as playing a role in the low competitiveness of Hungarian dairy supply chain arise from the internal capabilities of the sector and the country. Most of these problems are relative and emerge when it comes to comparison with competitors. It is a fact that Hungary, regarding its current position, has become a potential market offered by dominant milk producing member states in the EU and existing, traditional dairy product brands have been mostly lost to foreign companies. This follows directly from low self-sufficiency, unexploited quota looking back to several subsequent years and unfavourable export/ import structure (raw consumer milk is dominant in export, whereas high value-added processed products in import) in Hungary. As a result of the abolition of the EU milk quota system, milk production may rearrange in the EU, posing a serious threat unless the competitiveness of Hungarian dairy supply chain is improved.