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Drink makers fear effects of VAT boost

While certain segments of the Hungarian alcoholic beverages market will hardly be affected by the July 1 tax changes, other areas and their respective vendors may suffer.

Csaba Horváth, secretary general of the winemaker association Hegyközségek Nemzeti Tanácsa said consumers will not experience any major changes in wine costs. However, it is already troubling that distributors are looking to deflect the expenses of the VAT measures to the winemakers, Horváth said.

The excise tax raise will on the other hand deliver a strong blow to champagne consumers, with a 10.7% increase in prices expected for the segment due to the combined effect of the VAT and excise tax raise, said András Nagy, head of the Hungarian alcoholic beverage product council (MSzSzT).

This is margin that producers will not be able to cover through their own means and they will consequently be required to raise prices, Nagy said. (Gazdasági Rádió)