Hungary, what will become of you? Extreme rise in the price of pálinka!
As we all know, the traditional Hungarian alcoholic drink, pálinka, is beneficial for us in many ways. That is why it is horrific that the drink will become extremely expensive, as Agrárszektor.hu reports.
We have already written several articles about the amazing effects pálinka has on your body from a medical point of view, and shared other articles about special types of pálinka. Also, I am sure that not only locals but also tourists and expats adore the drink and cannot get enough of it during a night out.
However, lovers of pálinka will not be happy with the news that the price of pálinka will severely increase from next January.
Besides pálinka, other types of alcoholic drinks will also be more expensive such as liquors and those beverages that contain more than 50 pc alcohol. The main reason behind the drastic changes is that, until now, these products were not a part of the beverages to which the public health product tax (NETA) was applicable. From now on, the tax will apply to these categories as well.
One possible solution would have been to reduce the VAT of pálinka to 5 pc, but the decision-makers responsible dismissed this proposal.
With the new taxation system, there will be changes in the price of other beverages, too. On drinks that are in the categories already falling under taxation, the tax will be increased by 20 pc. This will drastically change consumer prices and presumably consumer behaviour.
Pálinka, among other beverages, can be almost HUF 2,000 (~EUR 6) more expensive than before which equals a 30-40 pc price rise.
The tax and price rise are likely to lead to worse positions in the market for these beverages and to fewer people buying them. This can eventually lead to illegally produced pálinka, a health threat for consumers.
Featured image: www.agroinform.com