This article documents the costs-benefit relations of producing the traditional Hungarian spirit “pálinka” on the basis of estimations of specialists working in the spirits sector. Impor-tant factors useful in planning a distillery are discussed; production costs and revenue are es-timated for a model distillery with an output of 30 thousand litres of palinka. A break-even analysis was used to evaluate the profitability of the enterprise, applying a base set of input and output prices. Feasibility and risk of investment is determined on the basis of NPV and IRR indicators, applying simulation software.
Research has shown that the expected total cost of mixed fruit palinka is ca. 2970 HUF (~10€) per one litre of 50 v/v% product, leaving aside the excise duty. In this case the eco-nomic efficiency of investment is relatively low. Production of specific products and follow-ing a differentiation strategy are necessary preconditions of economic success. The yearly profitability of investment before taxation is ca. 80 million HUF (~280 thousand €). Accord-ing to model calculation the IRR of different business models is higher than 40%.
Összefoglaló