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Superalko has more than 30 stores in Estonia. Picture of the store in Tallinn. NEWSPAPER PICTURE / HEIKKI SAUKKOMAA
The alcohol tax can be increased as early as next year, as according to the government program entry, the alcohol tax increases will be continued by EUR 50 million during the government term.
– The increase in the alcohol tax is in the government’s program and will be decided in the budget debate. I have been told that this is coming, says Minister of Finance Matti Vanhanen (center) to BTI.
The tax increase is in practice a decision that can be prepared quickly, so it could come into force as early as next year. Last year, the government has not yet raised the tax, and the government program does not specify the exact timing of the increase.
– In the budget debate, we will probably have to look at the schedules then, Vanhanen says.
The government program outlines that “changes in the operating environment so that the effects on passenger imports are monitored” will be taken into account. This year, passenger imports were completely on hold due to travel restrictions due to the coronavirus.
– We normally have continuous monitoring of passenger imports, which is done together with Valvira, Alko and THL (Department of Health and Welfare). In addition, the views of Customs and the Tax Administration are heard as experts, Veli Auvinen, a consulting official at the Ministry of Finance, tells BTI.
In Estonia, the tax was cut last summer
In July last year, Estonia reduced its excise duty on alcohol products by 25 percent to curb the rally of alcohol on its southern border with Latvia. For example, the prices of beer, cider and tentacle boxes fell by about 2 euros.
Last year, passenger imports accounted for about 14 per cent of alcohol consumption in Finland. Most alcoholic beverages are imported from Estonia, and imports from Latvia have also increased in the last two years.
Imre Poll, the chain manager of the Estonian alcohol chain Superalko, says that after the tax cuts, sales have risen back to previous levels, as they had been declining for several years before. The background was a tax tightening from 2017.
– The visit to Latvia was visible. After the tax cut, sales returned to normal and now it has remained at the same pace, Poll tells STT.
Superalko has more than 30 stores in Estonia and a few outlets in Latvia.
In Finland, sales and consumption are declining
Last year, passengers brought more soft drinks and fewer spirits to Finland, according to a THL report. The number of passengers importing alcohol and the average volume of liters imported remained at the same level.
However, passenger imports fell by 12.4 per cent as all alcoholic beverages were converted to 100 per cent alcohol. Instead, measured in liters, the increase was 1.5 per cent, the report shows.
The increase in the number of liters was mainly due to the increase in beer imports by almost 15%. Imports of mild wines and long drinks also increased. Imports of soft drinks accelerated especially towards the end of the year.
In Finland, alcohol sales decreased last year. Also during the first half of the year, sales fell by eight per cent measured in liters and by 3.3 per cent when converted to 100 per cent alcohol, according to Valvira’s January-April sales statistics.
According to THL, the total consumption of alcoholic beverages in Finland decreased last year, although with the alcohol law reform that came into force in 2018, stronger beverages with a maximum of 5.5 per cent entered grocery stores.
“Sales are comparable to last summer”
Due to travel restrictions in the spring, passenger imports to Finland came to a virtual halt.
However, after the lifting of the restrictions, Finns have returned to Estonia to buy alcohol, although Finns travel considerably less than before. Back in June, just over a third of Finns traveled to Estonia compared to June last year.
According to Tallinners, there have been more Finnish tourists in the city in July, but statistics have not yet been published.
– The sales are comparable to last summer, Imre Poll says in the Superalko store in the Port of Tallinn, where a large part of the customers are Finns.
According to Poll, the return to normal sales took place after the border between Finland and Estonia was opened in June. In mid-June, the recommendation of two weeks of quarantine when returning to Finland was removed, and since then there have been enough customers in Superalko.
Poll says that during the interest rate restrictions, Superalko’s sales fell about 20-30 percent.