Norway-Sweden: Gap In Alcohol Prices Grows
According to new data, the gap in alcohol prices between Norway and Sweden is growing.
The Swedish alcohol retail monopoly – Systembolaget – has announced they will be cutting the price of the cheapest beer to NOK 6.90 from 2020. Their reasoning is to reduce cross-border trade of Swedes going to Germany or Denmark to buy cheaper alcohol.
However, as IOGT International previously reported, cutting prices of the cheapest alcohol is an ineffective way to reduce cross border trade and has significant adverse public health effects. Strengthening EU regulations on the amount of alcohol which can be brought across national borders would be more effective in dealing with both cross-border trade and smuggling of alcohol.
The reduction of beer prices will further widen the gap of alcohol prices between neighboring Norway and Sweden. Norway has been adjusting their alcohol tax upwards with the general price trend in the country, while Swedish taxes have remained almost at a stand still according to Swedish Tax Agency figures. Already the price gap for alcohol between the two countries is large.
For example, the taxes on a liter of ordinary liquor with 40% alcohol content, were at NOK247 ten years ago. Next year the fees will be NOK66 higher. In Sweden, the tax on the same bottle was SEK201 ten years ago, and will only be SEK207 next year.
The price difference between Norway and Sweden has more than doubled in ten years.
In Sweden, the taxes on liquor have not changed since 2013, and no change has been announced next year either, says section manager Titti Campalto of the Swedish tax authority. She adds that, if the Swedes had adjusted to their consumer price index over the past ten years, liquor would have cost SEK229 this year. Since it is “only” at SEK207, the fee has therefore in effect decreased.
Sweden had index adjustment of tax until 1998 after which the country disbanded the indexation.