STUDY ON THE POTENTIAL OF SUBCONTRACT PALINKA DISTILLATION

Imre Milan Harcsa

doi:10.5937/ekoPolj1704379H

Authors

Imre Milan Harcsa, Ph.D. student Faculty of Economics and Business, University of Debrecen

DOI:

https://doi.org/10.5937/ekoPolj1704379H

Keywords:

palinka, investment economic benefts, net present value, single-step distillation, scenario analysis.

Abstract

Hungary has a centuries-long palinka distilling tradition. Palinka is prepared by the traditional method of "Kisusti" or the more economical single-step technology. Methods for the improvement of the quality and cost-effciency of palinka preparation will include investments into an up-to-date technology, the focal point of my investigation in the present paper in terms of economic indicators (net present value), internal rate of return, proftability index and discount rate time. The calculations assessed several (optimistic, realistic and pessimistic) scenarios. Legislative changes have exerted a considerable impact on the turnover of palinka distilleries, and the re-introduction of the excise tax for subcontract distilling has resulted in frequent changes since 2010 and indicated an unpromising tendency. A further problem concerns dependence on agricultural source material production (fruit production) and the existence of home distilling. In conclusion, benefcial economic conditions will be the key elements in the implementation of the investment mentioned above.

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