Effects of excise duty hikes may lead to store closures in Southern Estonia ({{commentsTotal}})

Coop may close up to six of its Southern Estonian stores as regional turnover suffers. Source: (Coop)

Cooperative retail chain Coop may decide in March to close up to six of its stores in Southern Estonia that are suffering from the effects of increased cross-border trade with nearby Latvia following recent excise duty hikes.

A meeting is scheduled for mid-March where, among other issues, the fates of six Southern Estonian Coop locations will be discussed, with the focus being on how to keep the stores operating in a situation where cross-border trade is eating into their turnover.

"It cannot be ruled out that the decision may come to close [stores]," said Martin Miido, communications manager at Coop Eesti, who did not mention which stores may be affected. "This is the Southern Estonian region and this is directly related to cross-border trade."

Miido explained that this did not have to do with the purchase of alcohol exclusively. Rather, alcohol [prices] prompt Estonian shoppers to head across the Latvian border and, once already there, buy other items as well that are cheaper there than in Estonia.

"When one goes shopping beyond their hometown, they bring back food, gas and other items which can be purchased for cheaper — this makes life more difficult for smaller stores," he noted, referring to stores along the Latvian border.

Latvian cross-border trade blossomed following the Estonian government’s decision to sharply and repeatedly increase excise duty rates on both alcohol and fuel, leading residents of Southern Estonia to look south across the border for cheaper prices.

Editor: Aili Vahtla

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