From highs to lows: Alcohol policies in the Baltic Region

Lithuania – a positive example for Europe

Lithuania has demonstrated what can be accomplished if there is sufficient political will. Between the year 2016 and 2018 major political decisions were made and implemented. These including prohibiting alcohol sales in gas stations, raising the legal drinking age from 18 to 20 years, banning of alcohol advertising, and repeatedly raised alcohol taxes. All of the WHO Best-buy recommendations were put into practice, and within a few years Lithuania changed its whole position on the issue of alcohol.

Estonia follows with significant changes

In the same period of time Estonia increased alcohol taxes significantly (primarily on beer) and restricted alcohol advertising by adopting a model similar to the French Loi Evin law. In grocery stores alcohol was moved to designated areas, or was placed behind walls separating alcoholic beverages from ordinary commodities. These were the biggest changes in Estonia’s alcohol policy since 1991, though not quite as significant as the transformation in Lithuania.

The need for stability

The ability to maintain the traditional Nordic alcohol policy from one government to another over the years has been one of the Nordic countries’ most significant achievements. As the Baltic experience has now demonstrated, if the political will can be found within a specific time frame, even substantial policy changes can be made. The difficult part is maintaining it, as new governments take office.

A new Lithuanian government stated in October 2020 that they would likely reverse some of the alcohol policy changes. It took some time, presumably due to the context created by COVID-19, but the government finally proposed lowering the legal age to 18 (from the current 20) years, allowing brands to advertise on social media, and extending retail hours on Sundays. However, the Parliament rejected the government’s plan to reverse its public health-focused alcohol policy by a vote of 63 to 51, demonstrating its commitment to the policy.

When Estonia and Latvia reduced their alcohol taxes

Estonia faced a different kind of problem as their next government was not only motivated to turn around the more restrictive alcohol policy, but to find a solution to a problem that was thought to be caused by the steep alcohol tax increase implemented in 2017. This particular problem was the cross-border trade between Estonia and Latvia. At one point, one third of the alcohol consumed in Estonia came from outside the country. Because alcohol in Estonia had become so  expensive,  many people began regularly visiting the alcohol stores set up right at the border on the Latvian side (in some cases, at the former border control buildings). The public and the majority of political parties were furious about Estonia’s loss of  in tax revenue.

A plan to reduce alcohol taxes in Estonia was introduced when a new government coalition was formed in April 2019. As a result, the government decided to reduce the alcohol excise duty on spirits, beer and cider by 25 per cent as of July 2019. Following the reduction in excise duties in Estonia, Latvia responded with its own reduction of 15 per cent, which came into effect in August 2019.

Latvia’s choices

Compared to its Baltic neighbours,  Latvia has been lagging somewhat when it comes to restrictive alcohol policies. When Lithuania and Estonia implemented significant changes, Latvia made some plans but didn’t find the needed political consensus.

However, Latvia experienced similar benefits from cross-border trade as Estonia did from its border trade with Finland for over a decade. The trade resulted in a significant income for the nation, where alcohol was less expensive. The Estonian government even accounted for the revenue from Finnish boarder trade  when creating the annual budget –  almost like a fixed income that you could count on.

When Estonia introduced its plan to reduce alcohol taxes to tackle that border trade in the summer of 2019, Latvian Prime Minister Krišjānis Kariņš complained that it was not how neighbours should behave towards one another, citing damage to its own alcohol retail sector.

In October 2022 Latvian government adopted a plan for 2023–2025 to reduce alcohol and drug abuse. Latvia’s approach to reducing alcohol and drug problems includes the following:

• Introducing measures such as a life skills development program in schools
• Informational materials
• Digital events
• Training for educators and parents on addiction prevention topics
• Exempting patients from co-payments for addiction treatment
• A state-funded outpatient psychotherapy program
• A support person service in social services for children and young people with addiction problems

These measures are aimed at helping teenagers avoid using psychoactive substances, aiding in recovery from addiction and providing support to those affected.

What can we expect from 2023?

As a result of the alcohol policy change in Lithuania,  the consumption of pure alcohol per capita dropped by two liters per capita in just two years between 2016–2018. There are now indications that this decline is coming to an end and may even reverse its course. There are attempts to liberalise alcohol policy in ways that would further burden controlling institutions:

In March 2023, Estonia is having Parliament elections. Currently, there is a possibility that the new government could be formed by the far-right-leaning Conservative People’s Party, which was behind the 2019 tax decrease. Because of the problems caused by cross-border trade, alcohol policy is currently unpopular, and no political party is willing to take another restrictive step.

Latvia will need to find resources and the will to carry out the adopted plan. There is an urgent need to develop the missing policy measures.

In conclusion, despite significant progress in recent years, there is still much room for improvement. However, the struggle for stability continues. As new governments take office, there is a risk of policy shifts.

This article is written by

Lauri Beekmann, Executive Director, NordAN

on request of PopNAD