Poor fruit harvest weighs on the pálinka sector

In addition to raw material shortages, demand is also weakening. Based on stock-release data, sales volumes are down by around 10% year on year. The sector attributes this partly to declining overall alcohol consumption and partly to shifting preferences among younger consumers, who increasingly favour long drinks over traditional spirits.

Competitiveness is further undermined by the fact that grain-based spirits can be produced at significantly lower cost, while fruit-based inputs for pálinka are becoming more expensive and harder to source. Despite this, Mihályi stressed that in terms of quality, premium fruit pálinka can compete with any international spirit and offers high enjoyment value without lengthy ageing.

Exports currently account for only around 3% of total Hungarian pálinka sales, a ratio the Pálinka National Council believes must be improved. According to the organisation, international market entry would be more effective with a focused strategy, built around one or two flagship fruit varieties. In the longer term, pálinka’s diversity – spanning different fruits, vintages, production technologies and ageing methods – could become a strong differentiating factor.

Cost pressures have also increased due to the introduction of the deposit return system, which poses a particular financial burden for smaller distilleries. According to the Council, the sector’s resilience will depend on stronger cooperation among producers and more targeted market-building efforts in the period ahead.