Finland: High taxes make beer lovers shop abroad

Higher taxes on beer in Finland have once again spurred consumers to bring in more from Estonia, the Federation of the Brewing and Soft Drinks Industry (Panimoliitto) said on May 20.

Last year people returning from Finland's southern neighbour, Estonia, brought back significantly less beer after the Baltic country raised its alcohol taxes.

But since Finland hiked its taxes on beer at the beginning of this year, the trend has again reversed with imports rising in the February-through-April period, according to a study carried out by the Research and Analysis Center (TAK) for the industry group.

The drinks federation says it is worried by this development.

"The tax hike can be seen in the import figures for the early part of the year in a clear, unfortunate manner. This should not be the goal of a single Finnish legislator. We are losing; specifically in tax revenue to the state and in Finnish employment as well as the livelihood of a primary production industry, says the head of the drinks industry lobby, former MEP Riikka Pakarinen.

In the February-through-April period, the amount of beer brought back from visits to Estonia jumped by some 40 percent compared to a year earlier. Personal imports of cider and pre-mixed alcopop drinks also rose.

Estonia, which joined the EU nearly a decade after Finland, has traditionally been a shopping and getaway destination for Finns due to lower prices, especially on alcohol and food. However the price difference between Helsinki and Tallinn has narrowed significantly in recent years.

Domestic beer consumption has declined throughout this decade, sliding by more than seven percent, the industry group says.

The TAK study also points to other changes in consumer behaviour. Two years ago, just over one fifth of travellers said that they never brought alcoholic beverages back to Finland from trips abroad. According to this year's data, that proportion is now up to one third of travellers.

On the other hand, a smaller group of heavy users is importing more than ever. The study looked those who bring in more than 100 litres of alcohol annually. It found that they visit Estonia an average of five times a year and account for about 38 percent of all alcohol carried into Finland by visitors to Estonia.

These avid buyers are also travelling further afield in search of cheaper booze. For instance nearly a quarter of the alcoholic drinks brought into Finland in luggage originated in low-tax Latvia, Estonia's southern neighbour.

And nearly four out of 10 heavy importers said they bought alcohol elsewhere than of Estonia.

Latvia's capital Riga is four or five hours south of Tallinn by bus or car. The Estonian capital can be reached from Helsinki within a couple of hours by ferry.

21 May, 2019