Contradicting the everyday experience of Estonians getting cheap alcohol from Valka, Latvia right across the border, adviser to Prime Minister on economy and finances Martin Lindpere cites statistics to prove the price levels of Estonia and Latvia do not differ much. Also, he assures us that Taavi Rõivas has entered no contract in the interests of Alko, the Finnish monopoly, to level vodka prices between the neighbouring nations.
-How do you comment the claim by entrepreneurs that the government has flopped with fuel and alcohol excise rise as taxes have not met expectations?
The enterprises are currently using up reserves acquitted before excise rise and the data is fluctuating so conclusions are hard to make. Data available does not confirm noticeable alterations in consumer behaviour.
Compared to EU average alcohol proves, Estonia was at 1004 percent in 2015 and Latvia at 106 percent. Meaning, last year average prices in Latvia exceeded those in Estonia.
-Isn’t this sine reality shift here as government is following Eurostat data over the Internet and Estonian people are following booze prices in Valga and Valka (the Estonia-Latvia border twin-towns – edit)?
Both need to be watched, sure. It is a gig job to even up the data and statistical office has done the job. And the statistics say that there is no significant difference between alcohol prices in Latvia and Estonia.
-What would the statistics have to be like to make you advise that the Prime Minister and finance minister to alter excise policy?
We would have to detect some significant behavioural changes. Based on the current data, this is very difficult to confirm. Officials in finance ministry and Tax Board are working at it and the situation is under constant analysis.
-The politicians in Finland have been troubled that due to low alcohol prices in Estonia, their state monopoly Alko is ineffective. Have the Finns let our Prime Minister know that, in the name of brotherhood, we should catch up with vodka prices?
I have not heard of an agreement like this, there is no such agreement because we have much more important things to discuss with the Finns than that.
Theoretically, one might think that in small neighbouring nations alcohol policies would in some ways be coordinated. But in reality this is not the case.
In the future, however, cooperation like this cannot be excluded.