Zwack, the Hungarian spirits producer, has seen its first quarter pre-tax profits fall by almost half as sales at home and abroad fell.

Profits reached 251m forints (US$1.13m) while sales dropped 4% percent to 4.54 billion forints. These figures comares with 2002 pre-tax profits of 483 million forints and sales of 5.25 billion forints.

Domestically the company blamed the fact that Easter fell in the second quarter this year as opposed to the first quarter last year.

Abroad, the company's sales were hit hard on the Italian market as distributors followed a tighter stock piling policy. This wasnot a situation that Zwack felt would improve during the full year.