Alcohol, Estonia, Financial Services, Latvia, Legislation, Markets and Companies

"Broadly speaking, it will have no effect. People have understood that next to Estonia we have Latvia, where it's fun to be too and where everything is cheap. People are used to going there," Visnapuu told BNS. He said that the alcohol tax hikes planned by Estonia and Latvia for next year are in the same range and will leave a big difference in prices to Latvia's advantage.

Visnapuu also said that the government opting for a rise half smaller than planned in no way affects the plans of Alko1000 to expand. "Nothing will happen to the investment. The extension of the Ikla store should be completed around December 10," he said.

As a result of the extension, the selling area of the Alko1000 store on the Latvian side of the Estonain-Latvian border in the area of Ikla-Ainazi is to increase from 700 to 1,300 square meters.

The Estonian government at its Cabinet sitting on November 23rd decided that the rise in the excise duty on alcohol next year will be half of the planned size, in order to reduce risks related to cross-border trade.

Under currently valid law, the excise duty on beer should rise by 17.65%, the duty on cider by 17.89% and the duty on strong alcohol by 10 percent in Estonia from Feb. 1 next year. With a rise half of the planned size, the duty on beer would rise to 16.8 cents per percentage of alcohol by volume per liter and the duty on strong alcohol to 25.08 cents per percentage of alcohol by volume per liter.

In Latvia, the beer duty is to rise by 24 percent from the present to 5.6 cents per percentage of alcohol by volume per liter on July 1.