Pálinka – before and after COVID

László Mihályi
president
National Council of Pálinka

On average 80 percent of the sales of commercial distilleries is realised in the HoReCa sector. When the state of emergency was declared, the majority of pálinka’s market disappeared. In practice this means that pálinka makers are running at less than 50 percent of their production capacity. This has also entailed that they purchase less fruit than in former years. Some distilleries had to lay off the majority of workers.

It very much seems that bars and restaurants will remain closed at least until March. Since there is no sales revenue for businesses in the sector for 5 months, survival is nigh impossible without help from the government. About 2,000 jobs at 200 companies are in danger. Plus pálinka makers would need the same marketing budget from the state after the pandemic that winemakers were given.

It can only be estimated how much spirit is distilled for home consumption, but it is definitely more than the volume of commercial and subcontract distilling combined. Since the majority of home-distillers don’t register their activity and don’t pay taxes, no change can be expected in this field. //