In 2020, Finnish alcohol use fell by 5.2%. Apart from existing policy solutions, such as the government-run alcohol retail monopoly, Alko, Finland used several alcohol availability measures to curb the COVID-19 spread. These policy solutions achieved the drop in alcohol use in the country.
One of the main reasons for the decrease in alcohol use was the reduction in passenger imports of alcohol from nearby Estonia and Latvia. Estonia’s capital city Tallinn is only a two hour ferry ride away from Finland and Estonia has cheaper alcohol. With the 2019 alcohol tax cuts in Estonia, alcohol has gotten even cheaper. Prior to the COVID-19 pandemic, taking a cruise to Estonia for cheap alcohol was popular among Fins. Even the ferries stock alcohol which are cheaper than in Finland. After landing in Estonia, some Fins even drive to nearby Latvia searching for even cheaper alcohol prices.
According to Euro News, in 2019, prior to the pandemic, about 15% of all alcohol consumed by Finns was bought abroad. The COVID-19 pandemic saw a 50% drop in private alcohol imports. Between 2019 and 2020 private alcohol imports reduced from 6.2 million liters to 3 liters of pure alcohol. Latest data from the Finnish Institute of Health and Welfare indicate private imports kept declining this year. During the 12 months from August last year to this year, Finns brought a total of 1.5 million liters of pure alcohol from traveling abroad.
But the public health gains of reduced alcohol consumption in Finland are now in jeopardy with borders re-opening. Ferry companies and the alcohol industry are awaiting the ‘booze cruises’ to restart. The enormous ships which transport Finns to Estonia have room for thousands of passengers. While not yet at full capacity, already some Finns have re-started their cruises.
The ferry companies promote these ‘booze cruises’ by organizing special five-hour shopping cruises ahead of party seasons such as in spring before graduation or Christmas. In 2020, the ferry company Tallink Silja even organized a cruise to Riga, the capital of Latvia.
Cross-border trade affecting the health of an entire region
In 2019, the Estonian government’s decision to slash alcohol taxes by 25% deepened the cross-border trade issues in the Baltic region and Finland. Estonia’s neighbor Latvia responded with their own alcohol tax reduction. The result was both countries weakening alcohol policies with no real solution for cross-border trade.
In close-knit regions such as the Baltics, one government’s decision affects the health and well-being of the entire region. As the tax war between Estonia and Latvia proves, short-sighted decisions can endanger the health of all citizens. Despite the comprehensive alcohol policy measures in Finland, cross-border alcohol trade from Estonia and Latvia affects alcohol consumption levels in the country.
The cross border alcohol issues between Estonia, Latvia and Finland demonstrate the need for prioritizing public health-oriented alcohol taxation in the region, and for better regional collaboration in the Baltic Sea region and in the wider European region.