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Abstract
The study 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 and commercial distilleries along different dimensions in terms of economic performance (sales, operating profit, after-tax profit). The results show that there are significant differences between the two types of distilleries. Commercial distilleries also outperform contract distilleries in terms of plant size, number of employees and age. Furthermore, the results of econometric studies also show that the economic performance of commercial distilleries was more favorable in the period under study, which is primarily due to the better utilization of the opportunities inherent in scale economies.