Ismo Tuominen, Ministry of Social Affairs and Health, Finland
Alcohol infiscal policiesIsmo TuominenMinisterial Councellor, legal affairsMinistry of Social affairs and HealthFinland
Etunimi Sukunimi2 14.6.20132Implementing ”Sustainable development”USE BEST AVAILABLE KNOWLEDGE Ensure that policies are based on best available knowledgeand that they are cost-effective.MAKE POLLUTERS PAY Ensure that prices reflect the real costs to society of aneconomic activity and that polluters pay for the damage theycause.
Etunimi Sukunimi3 14.6.2013USE BEST AVAILABLE KNOWLEDGEEvidence suggests that alcohol prices affect on the level ofalcohol consumption People increase their drinking when prices are lowered, anddecrease their consumption when prices rise. Heavy or problem drinkers are no exception to this rule. Economic studies demonstrate that increased alcoholicbeverage taxes and prices are related to reductions inalcohol-related problems. Alcohol taxes can be used both to generate direct revenue andto reduce alcohol-related harm. The most important downside to raising alcohol taxes istraveller’s imports, smuggling and illegal in-country alcoholproduction.Babor et al.; Alcohol - No-ordinary Commodity
Etunimi Sukunimi4 14.6.20134MAKE POLLUTERS PAY Production and trade of alcoholic beverages+ 0,4% of EU GDP in 2004 Health, social and economic burden of alcohol- 1,3% of EU GDP in 2003 (total tangible cost)- 0,9 %
Etunimi Sukunimi5 14.6.2013The Finnish experiment on humans2004 alcohol excise duties cut by 32 %» 10 % increase in total consumption» 20 % decrease in tax revenue» annual increase of 600 alcohol-related deaths2008-2012 four 10 % increases in alcohol excise duties» 9 % decrease in total consumption (2012)» 30 % increase in tax revenue (2012)» annual decrease of 500 alcohol-related deaths (2011)
Etunimi Sukunimi7 14.6.2013Alcohol-related deaths, 2000–2010705001 0001 5002 0002 5003 0003 5002000 2005 2010Violent deaths underthe influence of alcoholAccidental deathsunder the influence ofalcoholAccidental alcoholpoisoningsMain cause of death:alcohol-related diseasetax -32 % tax 3 x +10%
Etunimi Sukunimi8 14.6.2013The Finnish experience for alcohol in fiscal policy– Alcohol taxation The most cost-effective and fast measure to reduce alcohol harm In general the higher the better - for health and for revenues Should rise at least at the level of inflation and income growth– Regulating cross-border purchase and illegal market Limit traveller’s import quotas if possible!= Don’t do as the EU has done ... At least moderate control on smuggling and illegal production isneeded.– Minimum price regulation ? Could have significant impact on heaviest and youth drinkers, butwhat is the difference between raising taxes ?– Ban on sales below cost ? Difficulties in enforcement - no perfect solutions