What means to adulterate and why is it so dangerous? I read several times in media about people who were harmed or even killed by drinking adulterated schnaps. 

What does it mean to adulterate e.g. schnaps? Why is it so dangerous? And what is the "benefit" of doing this?
To adulterate means to dilute or debase a substance. So adulterated schnapps means schnapps with something added in. Much like cocaine cut with flour, that something need not be a similar substance, but is likely to be something cheap.

It gets worse when this adulteration is "off the books", because it means that a company can pass one product with the relevant consumer authority, then turn around and add whatever they want into it. That stuff might end up poisonous.

As you can see, it's rightly considered a crime: