Consumption growing after lifting of duties

The legal market of liquors in Hungary has risen by 1-1.5 % in 2005, and has reached the amount of 47 million liters, first of all due to the growing consumption of imported beverages and the increase of the low price private brand products. The increase in import was resulted mainly by Hungary’s 2004 EU accession, and the fact that the former 40.8 % import tax on foreign beverages was levied. Export figures remain insignificant, not reaching 1% in 2005. Hungarian producers had to face a great challenge with EU accession, first of all concerning premium beverages, but domestic producers were able to adapt to the new situation and new consumer demands. Actors in the market suffered twice from the effects of excise tax rise – another effect of which are narrowing possibilities of sales on the legal market (as opposed to the black market). Low price products give an almost 70% of the 47 million liter market. The share of premium products is growing significantly at 15-16%, with the biggest increase in the consumption of bitters and whiskies. The latest government austerity measures are expected to cause a drop in purchasing power.