Alcohol, Analytics, Legislation, Lithuania, Markets and Companies, Shadow economy

"We record opposite trends in to those in other areas. As the economy is growing and people's incomes are increasing, the overall level of shadow economy in Lithuania is on the decline and this year accounts for about a quarter of the gross domestic product," LFMI Vice President Vytautas Zukauskas sad at a news conference on December 28th.

"Shadow activity in the alcohol market, on the contrary, has picked up," he said.

The LFMI estimates that the share of shadow activity in the strong beverage market rose to 24% this year, from 22% in 2015. By comparison, the share of shadow activity in the whole economy fell to 24%, from 26% two years ago.

"When legal alcohol becomes more expensive, people look for alternatives. One of them is (to buy drinks) in the shadow (market) and the other is to buy them legally in neighboring countries," Zukauskas said.

"Forecasts have proved to be correct: following a sharp tax hike in Lithuania, an increasing number of people buy legal alcohol and thus pay taxes in neighboring countries," he added.