Among the hodgepodge of proposals presented by Viktor Orbán to solve the “economic crisis” was an announcement that promised changes in regulating the distillation of pálinka. This momentous decision was introduced with great fanfare. It was described as the pinnacle of ninety years of struggle for liberation against the backdrop of the tyranny of the state. The “tyranny” referred to is the very sensible regulation that the owner of orchards who would like to distill pálinka must take the fruit to a state distillery and pay taxes on the product. Where Orbán got the 90 years of struggle no one knows because ever since 1850 the same regulation has been in place: one can distill alcohol but not illegally and without a proper knowledge of the process.
There are several arguments against making the illegal process of home brewing legal. First is the hard-earned reputation of a Hungarian specialty that is recognized by the European Union as unique to the country. The production of pálinka is regulated in the European Union by order 1-3-1576/89 which took effect on July 1, 2001. According to the regulation, an alcoholic beverage may be called pálinka in the European Union only if it is made 100% from fruits or herbs indigenous to the Carpathian Basin and grown in Hungary. It must be produced and bottled in Hungary and its alcohol content must be between 37.5% and 86% ABV (alcohol by volume). The brand “pálinka” is protected by Hungarian and EU law, hence producers outside of Hungary are not allowed to use the brand “pálinka” for their products. Thus, pálinka is a Hungaricum just as is tokaji, the wine.
In the last twenty years or so a few devoted people spent a lot of money and energy to come up with top-quality brands of pálinka. With hard work they even managed to spread the fame of this Hungarian specialty abroad. Pálinka aficianados attend exhibitions and tasting festivals and even established a 13-member National Pálinka Council that together with the Hungarian government watches over the quality of this fruit brandy.
As it turned out, no one consulted with the National Pálinka Council concerning the “liberation” of crooks. Orbán’s announcement caught them unaware and not surprisingly they are not thrilled. Among other things they worry about the fate of the hard-earned reputation of Hungarian pálinka. They also expressed misgivings about the unfairness of the proposal which would allow some producers to avoid paying excise taxes. Home brewing must be supervised if it is to be safe and, of course, home brewers must pay the same excise tax that professional distillers do. Distilling is not a job for the amateur. In fact, home brewing might be dangerous. For example, equipment put together by a nonprofessional might blow up. I found this picture of some illegal distilling equipment.
Surely no nectar can come out of these containers!
Then there is the question of the excise tax. László Kovács was right. His claim was confirmed by Tamás Katona, former undersecretary of finance: the European Union doesn’t allow the Hungarian government to grant tax-free status to home distillers. Currrently there is an agreement between the Hungarian government and Brussels that until 2013 home distillers pay only half of the tax due, but they have to pay that amount. And after 2013 the full amount.
And finally there is the health issue. Professor Róza Ádány of the Medical School of the University of Debrecen proved that the rotgut stuff produced in large quantities, especially in certain parts of the country, and consumed freely is responsible for the very high incidence of cirrhosis of the liver in Hungary. Although alcoholism is high in Hungary, Hungarians don’t consume four or five times more alcohol than people in other European countries. Yet the number of deaths caused by cirrhosis of the liver is four or five times higher than the European Union average. Within the country there are huge differences in death rates that seem to coincide with the consumption of home-brewed pálinka. The example given is the difference between Győr-Sopron-Moson and Bács-Kiskun counties. In the former people live 4.5 years longer. Researchers are convinced that in large part this huge difference is due to the existence of illegal distillers. In the latter county fruit growing is an important part of agricultural activities. According to Professor Ádány in the rotgut stuff all sorts of poisonous chemicals remain: methanol, butanol, and isoamyl alcohol which cannot be found in the professionally produced pálinka. Apparently, the home-made stuff is drunk not only by the farmer and members of his family; they also sell it to smaller village pubs. According to some estimates perhaps 75% of the pálinka produced illegally reaches the public this way.
So, the arguments against Orbán’s proposal that was greeted so enthusiastically on the right side of the aisle are numerous and weighty. It is possible that in the end the freedom fighters for illegal and tax-free pálinka might be disappointed and that tyranny will win out once again.