Vice Squad
Tuesday, June 01, 2004
Finnish Alcohol Experiment Update

The Financial Times provides an article today discussing the decreased alcohol prices in Finland -- a story that Vice Squad has been trying to track since the tax-change-induced price decline of early March. The FT notes the increased consumption and the resultant problems: "Sales at the state monopoly stores have risen by 22 per cent. Hospitals and police forces have reported increased workloads and the number of cases of drink-driving has risen sharply." But the FT notes that Finland did not have much room to maneuver -- the addition of Estonia to the EU would undermine the high Finnish prices in any case. So despite the problems, Sweden might follow Finland's lead:
Alcohol consumption in Sweden has already reached its highest level for 100 years, increasing by 30 per cent since the country entered the EU. Yet sales of spirits at state stores have fallen by 12 per cent so far this year. The country's main schnapps distillery is taking a production break this summer because of a lack of sales.

Kent Hrstedt, appointed by the Swedish government to examine the issue, sees no alternative to a tax cut. "Against our will we are forced to follow a path far removed from the traditional successful Swedish alcohol policy."

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