Sweden: The Swedish government proposed on March 16 to cut taxes on beer and wine by 30 % next year. Currently, half a liter of beer is taxed by almost 4 kronor (euro0.44; US$0.60). If the proposal is passed by parliament, the average consumer price would fall by about 10 %, according to Kent Haerstedt, a lawmaker who presented the tax reduction plan.

The proposal, which also included several measures to curb teenage drinking, was the final part of a planned sweeping reform of the country's alcohol policy. In August, a 40 percent tax cut on hard liquor was also proposed. The parliament is expected to vote on the proposal later this year, according to Associated Press.

Prices at the state-run Systembolaget stores are among Europe's highest and sales have fallen sharply since nearby Estonia joined the European Union and neighboring Denmark and Finland slashed their alcohol prices.

In 2004, one-third of the beer -- and 70 % of the hard liquor -- consumed in the country was purchased abroad, said Kent Haerstedt. In southern Sweden, people visit stores in Denmark, an eight-kilometer (five-mile) drive across the Oeresund strait bridge, and in the north they cross the border into Finland, where the government slashed alcohol prices by as much as 33 percent in March 2004.

Also, an increasing number of Swedes are taking "booze cruises" to Estonia to buy cheap vodka. The practice has become even more popular since Estonia joined the EU on May 1 and all alcohol import quotas between the two countries were effectively removed.

While Sweden has long prided itself on using high alcohol taxes as a way of controlling consumption, the mass exodus of consumers is forcing the government to rethink its strategy, Haerstedt said. "It's not like the Systembolaget is crumbling or going broke," he said. "But it's systematically being weakened as an alcohol policy tool." He added that "there's nothing morally strange about people shopping where it's the cheapest. It's pretty logical that Swedes act that way."

The proposal also included raising the age requirement for buying alcohol in bars and restaurants from 18 to 20. Currently, people have to be 20 years old to shop in the Systembolaget stores, but 18-year-olds can still order beer and liquor in a pub. Haerstedt said the suggested increase was inspired by the United States, where there's a 21-year age limit on all alcohol. That has had "a very positive effect" in stopping teenagers from drinking at an early age, he said.

Haerstedt's proposal was met with mixed reviews, as some said the tax decrease would only increase alcohol consumption in the country. "One thing is for sure, and that is that Swedes will drink even more" if the proposal is passed, said Carina Eriksson, head of the youth division at IOGT-NTO, a Swedish temperance organization.

The proposal did not address a current request by the EU head office that Sweden stops taxing wine at a higher rate than beer. The EU claims that Sweden favors its domestic beer producers by slapping a lower tax on beer than on imported wine. Sweden has said it will argue the decision in court. "The government will have to deal with that when the verdict comes," Haerstedt said.

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