The Hungarian Pálinka Sector - a Comparative Analysis of Contract and Commercial Distilleries

Maró, Zalán Márk – Maró, Gréta – Török, Áron

Keywords: pálinka, contract distilleries, commercial distilleries, location, economic performance, Q12

The article examines the economic performance of the Hungarian pálinka sector. Based on the database of the National Tax and Customs Administration and the M&A Research Catalyst, a total of 461 distilleries were identified in the period from 2009 to 2017. The aim of the study is to examine contract distilleries as well as commercial distilleries in terms of economic performance (revenue, profit from operation, profit after tax). The results show that there are significant differences between the two types of distilleries. Commercial distilleries outperform contract distilleries in terms of plant size, number of employees and age. Furthermore, the results of econometric tests show that the economic performance of commercial distilleries developed more favourably during the period under review, mainly as a result of better exploitation of the potential of economies of scale.