Alcohol tax going up next year

The government decided on Tuesday to raise the tax on alcoholic beverages by about ten per cent for all types of drinks. The price of a half-litre bottle of strong spirits will go up by an average 75 cents, while a bottle of wine will increase by 22 cents, and a bottle of beer will be four cents more expensive than now.
      The aim of the hikes is to keep alcohol consumption under control.
      Lennart Wahlfors, data management head at the National Product Control Agency for Welfare and Health that his “educated guess” is that the cut will result in a decline in consumption of about one per cent.
      From January through August, consumption declined by 2.4 per cent over the same period the previous year after a tax increase was implemented in January. At the same time, consumption that did not make it into official statistics - mainly personal imports by travellers arriving from Estonia - grew by an estimated ten per cent.
     
Total alcohol consumpion from January through August last year declined by about one per cent.
      “When domestic prices are raised, consumption that is not included in the statistics increases, but not as much as the decline in domestic sales”, Wahlfors explains.
      Annual per capita consumption of alcohol in Finland is the equivalent about 10.5 litres of pure alcohol - children included.
      A one per cent decline in overall consumption would reduce annual per capital consumption to 10.4 litres. Wahlfors feels that health and social consideration would require a reduction in annual per capita consumption to nine litres.
     
Finnish alcohol policy is seen by Pekka Sulkunen, Professor of Sociology, to be going in the right direction. However, he feels that it is insufficient.
      “When the price of alcohol was reduced by 40 per cent, it was a major event. this change will not have any effect on that”, he says.
      The tax on alcohol was lowered sharply in March 2004. The tax on strong spirits went down by 44 per cent, that of beer was reduced by 32 per cent, and the tax on wine was cut by ten per cent.
     
Sales personnel at retail outlets of the state monopoly Alko do not expect any major changes in demand for alcohol.
      “Sales always decline when the price goes up”, notes sales clerk Kurt Bäckman at an Alko in Vaasa.
      At the sales outlet at the Iso Omena shopping mall in Espoo, Alko shop manager Mauno Kujanpää believes that the tax hike might reduce alcohol consumption, in conjunction with the weaker economic situation.
      In Tornio, on the border with Sweden, Alko shop manager Anu Heikkilä says that the rise might affect cross-border sales, as the price difference with Sweden narrows. More than half of the shop’s customers come from Sweden, where prices are higher.


Previously in HS International Edition:
  Sales of alcohol down by 3% in year to June (12.9.2008)
  New Year brings an end to bulk beer discounts; alcohol taxes raised across the board (2.1.2008)
  Calls in Parliament for higher alcohol tax hikes (18.10.2007)