According to the Estonian Breweries Association (Eesti Olletootjate Liit), cross-border trade in beer, cider and low-alcohol beverages is not showing signs of diminishing, with beer seeing a large rise since last year.
Hikes in alcohol excise duties in recent years have met with criticism, mainly due to the harm the hikes do to domestic alcohol retailers; a thriving trade in Latvian towns close to the Estonian border, such as Valka, has been reported.
Valga-Valka straddles the Estonian-Latvian border, a part of the Schengen Zone of free movement, so alcohol purchased on the Latvian side of the border can easily be taken home on the Estonian side and is factored into domestic sales figures here.
Data collected by the breweries association indicated that cider and other low-alcohol beverages sold on the Latvian side of the border saw a 40% YoY rise in the first four months of this year.
The existence and growth of this trade was supported by market considerations and was not a short-lived craze, head of the breweries association Peeter Vork said in a press release.
“We can still say that the reason for border trade is purely economic arguments, not emotional protest moods or the excitement of going to Latvia. Border trade can be abolished only by way of reducing tax, buying from Latvia will not decrease without a financial motivator,” Vork said.
Cider and low-alcohol beverages sales on the Latvian border increased from 0.91 million liters in the first four months of 2018, to 1.25 million liters in the first third of 2019.
6.65 million liters of beer was sold on the southern border in the first four months of 2019, slightly up on the 6.638 million liters sold in the same period in 2018.
“A year ago, stores established specifically for servicing border alcohol customers numbered seven on the Latvian-Estonian border, but two new operators with two completely new stores emerged last year in the light of growing volumes. A fall in the numbers of Alko1000 stores only shows a change in the competition positions on the border, not the retreat of border trade,” Vork added.
According to recent sales figures, approximately 1.9 million liters more beer is likely to be sold on the Latvian border this year than last, which will also make up approximately 40% of the total volume of beer sold in Estonia this year, the association said.
A total of 29 million liters of beer and 5.5 million liters of other low-alcohol beverages is projected to be sold on the border this year.
The Estonian Breweries Association is an umbrella organization for major Estonian producers of beer and other low-alcohol beverages. The association’s sales statistics have been collected from member organizations. (ERR/Business World Magazine)