Last year, nearly one in three adults in Estonia had purchased alcohol in Latvia. While in earlier years, Estonians frequently made dedicated trips to Latvia to purchase alcohol, nowadays they are more likely to buy alcohol when already traveling through.
Estonia's latest experiment with the alcohol excise duty is through for now. In addition to launching robust cross-border trade with Latvia, it also saw people in Estonia tend to stock up on large amounts of alcohol at once, and fewer people continued to support a strict alcohol policy. While approximately half of people polled supported a strict alcohol policy five years ago, by 2018, that number had dropped to 27 percent, reported ETV news broadcast Aktuaalne kaamera.
According to Institute of Economic Research data, while the average total alcohol purchase remained below €50 for those who stopped by a liquor store in Latvia, those who made trips especially to purchase alcohol in Latvia tended to spend €100-200 at once.
Institute of Economic Research director Marje Josing said that while five to seven years ago, it was said that people in Estonia didn't tend to purchase large quantities of alcohol at once, and cases of beer and liquor, for example, weren't typically sold at regular liquor stores, when the excise duty was hiked in Estonia, Estonians began doing precisely that for which Finns were previously teased for doing in Estonia.
Statistics indicate that Estonians' drive to go out of their way to travel to Latvia to buy alcohol is subsiding, and if anything, the tendency is shifting toward purchasing alcohol while already traveling through the area.
"What will become significant is whether the difference in buying to go is economically significant enough to make buying to go worth it," Josing said. "It's already the case with many products that one can drive right by [Latvian liquor stores] and purchase the same product in Estonia at the same price."
Store owner: Estonians buying other stuff too
Einar Visnapuu, the owner of an ALKO1000 liquor store located just south of the Estonian-Latvian border, said that by the looks of his store's parking lot, you couldn't tell that less alcohol is being bought in Latvia follow this summer's reduction in the alcohol excise duty.
"In this time, the only thing that has changed is that while in the first years after this all began, people only came to buy alcohol, by now they have discovered everything else available in Latvia," Visnapuu said. "It's very difficult to find something in Latvia that is more expensive than in Estonia."
He believes that cross-border trade has nearly stabilized, and once the excitement over the cut in the alcohol excise duty has passed, Estonians will start noticing once again that alcohol isn't as cheap in Estonia as they had thought, because retailers only reduced the prices of a few select items, but the alcohol business is not based exclusively on Lauaviin-brand vodka and a few different kinds of beers.
This is why he doesn't share Josing's opinion that it no longer makes financial sense to drive down to the Latvian border to buy alcohol.
"Should it happen that Latvia implements its huge excise duty hike, which it wants to do as of March 1, then it may truly be the case that there is no point in coming here, but if we're talking about today — because we can't tell what the future will bring — then right now it is very much worth coming down here," Visnapuu said.
Editor: Aili Vahtla