Alcohol inquiry proposes 30% tax cut

The man heading the government's inquiry into the alcohol tax, Kent Härstedt, has proposed a tax reduction on beer and wine of 30%. If the reduction is approved, the actual cost of booze would fall by about 10%.

At a press-conference on Wednesday, Härstedt presented Morgan Johansson, the minister of health and social services, with his long-awaited conclusions. The escalating problem of alcohol smuggling – or “Why Systembolaget, the state run alcohol monopoly, is not the biggest supplier of alcohol in Sweden” – was behind the government’s decision to launch the inquiry, but Härstedt says that it is “alcohol politics” that needs to be changed.

“I am frustrated. The reviews needed should be done quickly and resolutely,” said Härstedt in an interview with Svenska Dagbladet.

But Härstedt is proposing more than just a tax reduction. Other measures will ensure that young people will not have such easy access to alcohol as they do now. In restaurants, the age limit to purchase beer or wine may change from 18 to 20 years. Also the introduction of a special tax on so-called “alcopops”, soft drinks laced with alcohol, might be able to control the consumption. The money will go to projects that aim at alcohol prevention measures among teenagers.

Another proposal is that bars stop serving alcohol after 3am.

Härstedt hopes the changes will help Swedes overcome their distrust of the way politicians have been dealing with the issue. According to a Temo survey, ordered by the Spirits and Wine Deliverers Association, more than 50% of Swedes are not satisfied with politicians’ approach to the question of a tax cut. A full 10% think the problem is so serious that they would even consider changing political party affiliation.

Last year, 73 million litres of beer were smuggled into Sweden, an increase of 32%, reported Göteborgs Posten.

Peter Bronsman, the managing director of Kopparbergs Bryggeri, Systembolaget’s second supplier of beer, is convinced that a tax reduction would eliminate smuggling. He would like to see a drastic reduction.

“We want to sell to Swedish customers at Systembolaget. But today, six out of ten cans of beer are not bought there. The tax reduction is an important part of the solution. Reduce it by 60%,” said Bronsman.

The company has long sold beer in Germany but states that the buyers are not Germans but smugglers who take advantage of the price difference between the two countries.

“The gangs are very organized. They don’t care to whom they are selling and the beer cans end up in the hands of teenagers,” Bronsman told GP.

If Härstedt’s suggestions are approved, the reduction could be introduced from 1st of January 2006.

Sources: Dagens Nyheter, Svenska Dagbladet, Expressen, SR, Göteborgs Posten