Estonia worries over cross-border alcohol trade

Estonia's minister of health and labor, Jevgeni Ossinovski, is worried about an Estonian company selling cheap alcohol to Estonians on the Latvian side of the border. He says it undermines the Estonian health policy and has turned to the finance minister to find out if his ministry has plans to do something about it, reported LETA Monday.

According to Ossinovski, at least one business registered and liable to taxation in Estonia has opened two stores in which Estonia-made alcoholic beverages are sold to Estonian consumers through an Estonia-registered company, but on Latvian territory.

"The objective of this business model is to evade higher excise duties and make profit thereby while undermining Estonia's health policy. In my view such activity is socially irresponsible," Ossinovski said in a letter to Finance Minister Sven Sester.

"Furthermore, we have learned that large quantities of alcohol taxed with a lower excise rate are being bought for sale in Estonian catering and retail enterprises. This is in direct conflict with the Alcohol Act."

"As minister of health and labor, I support a rise in alcohol excise duty aimed at protecting public health. It is worrying that along with excise rise cross-border trade has intensified, as a result of which we might not achieve the desired positive effect on the people's health," Ossinovski said.

He asked the finance minister to inform the Ministry of Social Affairs about any steps the Tax and Customs Board had taken in this situation and about any additional measures or regulation changes the Finance Ministry was planning.

Latvia has apparently become a booze tourism destination for drink-thirsty Estonians. In late June, about 18% of strong alcohol consumed in Estonia was sold in Latvia, the Estonian Alcohol Producers and Alcohol Importers Association said earlier in July.

LETA reported Tuesday that the Estonian Tax and Customs Board has caught two private individuals bringing back more alcohol than permitted from Latvia since Estonia carried out an excise tax hike in February.

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