Lower prices, rising wages, led to increased alcohol consumption in 2019

Strong liquor for sale in a supermarket.
Strong liquor for sale in a supermarket. Source: Anna Aurelia Minev/ERR

Alcohol consumption in Estonia rose in 2019, as the effects of both a reduction in excise duties and rising income made themselves known, according to recent research. At the same time, recorded intoxication rates and those of alcohol-related deaths also rose.

The research, conducted by the Estonian Institute of Economic Research (Konjunktuuriinstituut) and cited by the Ministry of Social Affairs in a press release, found consumption of alcohol rose by 3.2 percent on year (10.4 liters of pure alcohol, per person).

While lighter alcoholic beverages such as beer accounted for the larger share of consumption (63 percent), the primary increase fell in spirits, particularly imported drinks like whisk(e)y or gin.

Part of the rationale given for the slash in excise duties which came in in July 2019 was to stem the flow of custom going south of Estonia's border, to Latvia.

Vodka consumption, which includes domestically produced brands, did not increase, and beer consumption rose by one percent on year, the ministry said.

Intoxication and death rates

According to preliminary data from the National Institute for Health Development (TAI), 509 people died of diseases directly caused by alcohol abuse in 2019 – not a large rise on 2018 but still the highest in the past decade.

The largest proportion of deaths was recorded among those of working age, with 307 in the 45-64 age group.

The leading causes of death are alcoholic liver disease, followed by accidental poisoning, alcoholic cardiomyopathy, and alcohol-related mental and behavioral disorders.

The Police and Border Guard Board (PPA) says figures for those intoxicated and taken to centers for sobering up has risen by over 500, to 15,318 in 2019.

Consumption and retail figures

As noted both the cut in excise duty last year, which occurred midway through the year, and a rise in disposable income, are thought to have been behind the increase in drinking.

According to the director of the economic research institute Marje Josing, alcohol prices in Estonia as a whole have not decreased over the past 15 years. 

Prices did not fall quite as much as expected despite the excise cuts, she added.

"Retail prices did not fall as much as the fall in excise duties would expect, but lower prices for beverages and higher personal incomes led to a 3.2 percent increase in consumption. On the 'positive side', Latvia's border trade declined in the second half of 2019.

  • Incomes rose by 7.4 percent in 2019.
  • Alcohol became around 3 percent cheaper on average over the same period.
  • The excise duty cuts in July 2019 stood at 25 percent.
  • 11 liters more vodka, or 54 liters more beer, could be purchased for the same average net monthly salary in comparison with 2018.
  • Cross-border alcohol purchases per adult fell by 0.6 liters per year, to 2.8 liters, as prices fell.
  • Alcohol excise duty receipts fell €7 million on year to €225 million in 2019.
  • Alcohol purchases by tourists, particularly from Finland and Russia, fell in 2019, partly due to higher prices in the first half of the year before the excise duties were cut.

Social affairs minister Tanel Kiik (Center) noted concern on the figures as summer arrives.

"Despite the fact that the price of alcohol has fallen and people's incomes have risen, there are better places to direct their financial resources," Kiik said, according to a ministry press release.

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Editor: Andrew Whyte

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