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Rise in alcohol excise duty in Finland increased vodka sales in Estonia

Juhan Tere, BC, Tallinn, 25.08.2008.Print version
An increase in alcohol excise duty in Finland at the beginning of the year 2008 stimulated increase in the amount of alcohol bought abroad, including Estonia, the Baltic Business News Channel reported.

Finns bought abroad 10% more alcohol in the first quarter of 2008 comparing to the first quarter of 2007.


Lennart Wahlfors from the Finnish National Public Health Institute said that it is clear that the increase in alcohol excise duty is behind the alcohol purchases made abroad, reports, citing Helsinkin Sanomat.


Wahlfors added that expanding ferry traffic on the Tallinn-Helsinki route has also been a contributing factor. The bulk of liquors is bought in Estonia.


But Estonia's major retail chains bought warehouses of liquor producers empty before the increase in alcohol excise duty; therefore Estonian largest distillery Liviko was forced to stop some of production lines since they could only export their products, the Baltic Business News Channel informs.


Liviko's CEO Janek Kalvi said that liquor producers were in a difficult situation in the wake of a 20% increase in excise duty, Äripäev writes.


"This is a years long practice that before a greater excise duty growth retailers stockpile. After that a quiet period follows when producers can sell nothing," Kalvi said.


He added that Liviko alcohol sales were halted for three months. The stores will buy alcohol again at the end of September or in October. This also means that the state will receive excise duty in usual volume in November.


The greater the excise duty increase, the greater the wish to speculate, Kalvi explained the reason why alcohol producers suggest raising excise duty step by step.

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