The Finnish government was responding to an EU-wide harmonisation of travellers’ allowances in January 2004, and introduced the tax cuts to protect domestic sales. Finns were crossing the border to buy cheap booze in Estonia, which was set to join the European Union in May of that year. Finland, which operates a state retail monopoly on alcohol, carried out a pre-emptive measure in March to prevent excessive imports and thereby drastic losses in tax revenues. Sales tax was lowered by an average of 33% – much more for spirits (44%) – and retail prices fell by around 22% in consequence. As expected, sales – and therefore consumption levels - rose immediately. Recorded domestic sales in March 2004 were 50% higher than a year earlier, and total per capita consumption increased by 10% from 9.4 litres in 2003 to 10.3 litres in 2004.
In health terms, this had a dramatic and immediate effect on the rate of sudden deaths while under the influence of alcohol, such as accidents, suicides, homicides and alcoholic poisonings. Researchers analysed post-mortem forensic toxicology data (blood alcohol levels) over a 15-year period to account for seasonal and long-term variations. From March 2004 they identified a rise in alcohol-positive sudden deaths of 17% – an estimated eight additional deaths per week.
To bring the story up to date, travellers’ imports into Finland have now reached a plateau and future increases are likely to be prevented by the raising of excise duty in Estonia (up 5% in January 2005 and further increases planned for 2008). The Finnish government is also considering increasing the national alcohol tax levels. There is awareness that tax changes are an important policy lever which can be used for good or ill. The authors state: “Raising tax levels has been found to be the most cost-effective measure in reducing alcohol consumption and thus alcohol-related harms. Our study shows that taxation can influence the rate of alcohol-positive sudden deaths. A high taxation level cannot, however, be maintained without cooperation with neighbouring countries.”
Anna Koski, Reino Sirén, Erkki Vuori, Kari Poikolainen (2007): Alcohol tax cuts and increase in alcohol-positive sudden deaths - a time-series intervention analysis. ADDICTION 102 (3), 362–368.
Paivi Lehtinen | alfa
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