Pricing policy: The Finnish experience

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1 Pricing policy: The Finnish experience Esa Österberg Senior Researcher Alcohol and Drug Research, STAKES, Helsinki, Finland

2 Three pillars of traditional Nordic alcohol control Strict control of the physical availability of alcohol High prices of alcoholic beverages Comprehensive state monopoly on alcohol production and trade with the aim to minimize private profit-seeking in the alcohol field

3 Physical availability of alcoholic beverages has increased since the second World War, especially in 1969 and early 1970s as well as in Comprehensive state alcohol monopoly was abandoned in Off-premise retail alcohol monopoly was, however, maintained. In connection with the abolishment of travellers alcohol import quotas inside the EU on January 1, 2004 and Estonia joining the EU on May 1, 2004, Finnish alcohol taxes were lowered on March 1, 2004 on the average by 33 per cent.

4 STAKES, Alkoholi- ja huumetutkimus Recorded consumption of alcoholic beverages in Finland by beverage category in in litres of 100% alcohol per capita Total Beer Strong drinks Wine Cider Long drinks

5 Real price indices of total sales of alcoholic beverages , 1969=100

6 Real price indices of off-premise sales of alcoholic beverages , 1969=100

7 Real price indices of alcoholic beverages , total sales, off-premise sales and on-premise sales, 1969=100

8 Real price indices of alcoholic beverages , total sales by beverage categories, 1969 = 100

9 Real price indices of alcoholic beverages , total sales by beverage categories, 1969 = 100

10 Decreases in alcohol excise duties and prices of alcoholic beverages in Finland in March 1, 2004 Beverage category Tax decrease in per cent Decrease in off-premise prices, per cent Vodkas Other distilled spirits Intermediate products Long drinks Wine 10 3 Cider 23 7 Beer 32 13

11 % Changes of weekly sales of the Finnish off-premise retail alcohol monopoly, Alko in 100 per cent alcohol on weeks 1 to 51 in 2004 compared to the sales in previous year viikko Five weeks moving average Weekly sales

12 Total consumption of alcoholic beverages in Finland in divided into recorded and unrecorded alcohol consumption in litres of 100 per cent alcohol per capita 11,00 10,00 9,00 8,00 7,00 6,00 5,00 4,00 3,00 2,00 1,00 Unrecorded Recorded 0, /08/2008

13 Summary All three major pillars of the Nordic alcohol control have weakened since the second World War From the 1960s until 1990s the major pressure came from national interests General developments in retail trade (self service, opening hours, credit cards) Ideological views of independent and responsible customers Comparisons to other countries

14 Summary (cont.) Effects of the EU membership in 1995 Abolishment of comprehensive alcohol monopoly Cider to groceries like medium beer Abolishment on travellers' tax free import quotas from other EU countries (delayed to 2004) Tax decreases in 2004

15 Alcohol excise duties in some EU member states in January 2008, euro per liter of 100 per cent alcohol Country Distilled spirits Intermediate products Wine Beer Estonia Finland Norway Sweden Denmark Germany EU minimum level

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