Study: High alcohol taxation has caused problems in Sweden
FINNISH FEDERATION OF THE BREWING AND SOFT DRINKS INDUSTRY
PRESS RELEASE 5 July 2010
http://www.panimoliitto.fi/panimoliitto/en/press_releases/2010/pressrelease05072010.html
Study: High alcohol taxation has caused problems in Sweden
The Swedish State is losing tax revenue due to an explosion in the grey market and private imports by travellers. Young people are easily able to acquire smuggled alcohol, breweries have been forced to close and the industry has had to make major workforce reductions. Stringent taxation has led to alcohol imports from cheaper countries, which causes numerous problems. These conclusions are based on a study conducted during 2009 by the Swedish Retail Institute (Handels Utredningsinstitut, HUI).
In Sweden, a ban on the sale of alcoholic beverages of over 3.5 per cent volume in grocery stores has led to imports of stronger beers from abroad. Up to 30 per cent of all the beer consumed in Sweden is purchased abroad or on the grey market. On average, Swedes drink stronger beer than Finns, as import beer is invariably stronger than domestic brands. Imports have also weakened the competitiveness of Swedish breweries and had a negative effect on employment. Grey marketing is rife, causing the Swedish State to lose billions of krona a year in tax revenue.
The Federation of the Brewing and Soft Drinks Industry wants to highlight the fact that Finland's alcohol policy is very similar to Sweden's in many ways. Both countries have heavily relied on high taxation and imposing stringent regulations.
"Finland and Sweden are not closed enclaves. We live in the EU, where people and goods can move freely between countries. Finland's alcohol taxation is among the highest in the EU, and the most significant consequence of this is evident in the dramatic increase in travellers' private imports of alcohol. Cautious estimates indicate that, at the current rate of travellers' imports, the Finnish State is losing EUR 200-250 million in alcohol tax revenue every year. Private imports also lead to more alcohol being consumed at home rather than in bars and restaurants. This can be seen not only in alcohol abuse statistics, but also in these establishments' profitability and a rise in unemployment," says Tero Kallio, Managing Director of The Federation of the Brewing and Soft Drinks Industry.
Large volumes of alcohol are imported into Sweden from cheaper EU countries - both legally and illegally. There is sufficient demand for smuggled alcohol not only among those wanting to save money, but also among the underaged in particular. According to the study, alcohol has become increasingly more available to Swedish teenagers in spite of the government's regulatory policy.
Combine reasonable taxation with an alcohol awareness campaign
‘Suomi juo' (‘Finland Drinks'), a recently published book by Finland's National Institute for Health and Welfare (THL), shows that both Finns' alcohol consumption and the harm caused by alcohol have trebled over the last forty years. During this time, Finland's alcohol policy has been based on high taxation, strict regulation, and bans. Although these tools are still necessary in moderation, we must closely examine at what level taxation and regulations exceed the bounds of rationality. Recent trends in Finland and Sweden are alarming, and indicate that their existing alcohol policies have not been successful.
According to THL's study, which was published in June, the greatest problems with Finns' alcohol use are associated with drinking with the intention of getting drunk.
"Now is the time to ask whether we can do something differently. The Federation of the Brewing and Soft Drinks Industry believes that Finland should introduce an extensive, long-term alcohol awareness campaign alongside a more moderate level of taxation. A media awareness campaign designed to alter attitudes could influence the alcohol usage of young people and future generations in particular," says Kallio.
For more information, contact:
The Federation of the Brewing and Soft Drinks Industry
Managing Director Tero Kallio, tel. +358 (0)9 148 871 (ETL exchange), GSM +358 (0)40 729 4513
Communications Manager Outi Jalonen, tel. +358 (0)9 148 871 (ETL exchange), GSM +358 50 370 8677
The Federation of the Brewing and Soft Drinks Industry promotes the interests of producers of beer, cider, long drinks, soft drinks and mineral waters in Finland. Its members are Oy Hartwall Ab, Nokian Panimo Oy, Olvi Oyj and Oy Sinebrychoff Ab. The Federation of the Brewing and Soft Drinks Industry operates in connection with the Finnish Food and Drink Industries Federation and represents Finland's third largest industry in the food and drink branch in terms of the value of production.
________________________________________________PANIMO- JA VIRVOITUSJUOMATEOLLISUUSLIITTO RY
Federation of The Brewing and Soft Drinks Industry
PL 115 (Pasilankatu 2) - FIN-00241 HELSINKI - FINLAND
tel. +358 9 1488 7602 - fax +358 9 1488 7201
http://www.panimoliitto.fi/ http://www.kannissaoletaalio.fi/
