Magazine: Conditions are far from ideal

László Mihályi
president
National Council of Pálinka

László Mihályi, president of the National Council of Pálinka informed: in 2019 pálinka tourism was developing nicely. Then came the lockdown because of the pandemic in 2020 and pálinka sales were hit hard by the closure of bars and restaurants. 2021 brought the reopening of hospitality units and things improved a little. The president also mentioned that pálinka sales were around 1 million hectolitres per year before the introduction of the public health product tax in 2019 and the coronavirus, but in 2020 sales dropped below 600,000 hectolitres. There are pálinka distilleries that have been closed since the outbreak of the pandemic. Plus the reopening of bars and restaurants in 2021 has offered fewer selling opportunities than before.

2021 brought a problem that will generate rising pálinka prices: ingredient shortage. Everything is becoming more expensive and the price increase can be as big as 40 percent; especially fruits are more expensive – the recent weather extremities had a negative influence on fruit harvests. There aren’t enough workers to pick the fruits, plus there are the extra taxes that put further burden on distilleries. The domestic pálinka market is saturated and the black market is thriving. Despite the hardships pálinka makers have remained dedicated to producing quality, and the president hopes that the state will offer a helping hand in the form of subsidies.

The sector has no reserves that would cover extra costs

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The above article has also been published in Issue 2021/12-01 of Trade magazin.