Estonia: Alcohol consumption up 3.2% in 2019

Alcohol consumption in Estonia rose in 2019, as the effects of both a reduction in excise duties and rising income made themselves known, according to recent research. At the same time, recorded intoxication rates and those of alcohol-related deaths also rose, err.ee reported on June 5.

The research, conducted by the Estonian Institute of Economic Research (Konjunktuuriinstituut) and cited by the Ministry of Social Affairs in a press release, found consumption of alcohol rose by 3.2 percent on year (10.4 litres of pure alcohol, per person).

While lighter alcoholic beverages such as beer accounted for the larger share of consumption (63 percent), the primary increase was in spirits, particularly imported drinks like whisky or gin.

Part of the rationale given for the slash in excise duties which came in in July 2019 was to stem the flow of custom going south of Estonia's border, to Latvia.

Vodka consumption, which includes domestically produced brands, did not increase, and beer consumption rose by one percent on year, the ministry said.

According to preliminary data from the National Institute for Health Development (TAI), 509 people died of diseases directly caused by alcohol abuse in 2019 – not a large rise on 2018 but still the highest in the past decade.

The largest proportion of deaths was recorded among those of working age, with 307 in the 45-64 age group.

As noted both the cut in excise duty last year, which occurred midway through the year, and a rise in disposable income, are thought to have been behind the increase in drinking.

According to the director of the economic research institute Marje Josing, alcohol prices in Estonia as a whole have not decreased over the past 15 years.

Prices did not fall quite as much as expected despite the excise cuts, she added.

"Retail prices did not fall as much as the fall in excise duties would expect, but lower prices for beverages and higher personal incomes led to a 3.2 percent increase in consumption. On the 'positive side', Latvia's border trade declined in the second half of 2019.

Incomes rose by 7.4 percent in 2019.

Alcohol became around 3 percent cheaper on average over the same period.

The excise duty cuts in July 2019 stood at 25 percent.

11 litres more vodka, or 54 litres more beer, could be purchased for the same average net monthly salary in comparison with 2018.

Cross-border alcohol purchases per adult fell by 0.6 litres per year, to 2.8 litres, as prices fell.

Alcohol excise duty receipts fell €7 million on year to €225 million in 2019.

Alcohol purchases by tourists, particularly from Finland and Russia, fell in 2019, partly due to higher prices in the first half of the year before the excise duties were cut.

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