Pricing policy: The Finnish experience Esa Österberg Senior Researcher Alcohol and Drug Research, STAKES, Helsinki, Finland esa.osterberg@stakes.fi
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
Physical availability of alcoholic beverages has increased since the second World War, especially in 1969 and early 1970s as well as in 1995. Comprehensive state alcohol monopoly was abandoned in 1995. 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.
STAKES, Alkoholi- ja huumetutkimus Recorded consumption of alcoholic beverages in Finland by beverage category in 1953 2006 in litres of 100% alcohol per capita 9 8 7 6 5 4 3 2 1 0 1953 1957 1961 1965 1969 1973 1977 1981 1985 1989 1993 1997 2001 2006 Total Beer Strong drinks Wine Cider Long drinks
Real price indices of total sales of alcoholic beverages 1951-2005, 1969=100
Real price indices of off-premise sales of alcoholic beverages 1951-2005, 1969=100
Real price indices of alcoholic beverages 1951-2005, total sales, off-premise sales and on-premise sales, 1969=100
Real price indices of alcoholic beverages 1951-2005, total sales by beverage categories, 1969 = 100
Real price indices of alcoholic beverages 1951-2005, total sales by beverage categories, 1969 = 100
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 44 36 Other distilled spirits 44 28 Intermediate products 40 25 Long drinks 37 17 Wine 10 3 Cider 23 7 Beer 32 13
% 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 100 80 60 40 20 0-20 -40 1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 43 45 47 49 51 viikko Five weeks moving average Weekly sales
Total consumption of alcoholic beverages in Finland in 1965-2006 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 0,00 1965 1970 1975 1980 1985 1990 1995 2000 2005 27/08/2008
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
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
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 10.74 6.58 6.04 4.09 Finland 32.50 25.94 21.18 21.40 Norway 76.62 47.74 47.74 47.74 Sweden 54.54 27.29 18.06 18.06 Denmark 20.12 7.86 7.49 6.83 Germany 13.03 8.50 0.00 1.97 EU minimum level 5.50 2.50 0.00 1.87