NCPA - National Center for Policy Analysis

Swedes are Drinking More Beer, Wine and Spirits

February 3, 2003

The alcoholic arbitrage opportunity that draws British day-trippers to France for cheap wine and beer is spreading to new corners of Europe. In northern Europe, Danes travel to Germany for their liquor, Swedes shop in Denmark and Germany, and Norwegians go to Sweden.

This is evidence of the emergence of a European single market. But it also demonstrates that decades of effort by the Nordic countries to stifle alcohol consumption are unraveling.

  • Recent figures show that since Sweden joined the European Union (EU) in 1995 average alcohol consumption has risen from 7.7 liters per head per year to 9.8 liters.
  • This is still below the European average of 12 liters but is the highest level since the 1870s.
  • From the start of this year, Swedes have been able to import 5 liters of spirits, 52 liters of wine and 64 liters of beer on each trip.

In Sweden it is not only the quantity of imported alcohol that is rising.

  • Sales at Systembolaget, the country's state monopoly drinks retailer, last year rose at their fastest pace since the 1950s after store opening hours were extended to allow Saturday trading and taxes were cut on beer and wine.
  • At the same time, disposable incomes have risen so the real cost of buying alcohol has fallen sharply.

Worse may be to come. Denmark is planning to cut its tax on spirits by 45 per cent in the autumn to compete with lower German prices, and Swedes will be allowed to import even more alcohol from other EU countries starting next January.

Source: Christopher Brown-Humes and Claire MacCarthy, "The thirst for cheap alcohol draws Swedes across borders," Financial Times, January 29, 2003.

 

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