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Europe

Prices Send Drinkers Across the Border

A huge industry of cross-border shopping has developed in northern Europe because alcohol prices differ widely from country to country.

Prices for a 0.7-liter (24 oz.) bottle of spirits send the Finns (€20.09 / $24.76 per bottle) rushing to Estonia (€5.57); Swedes (€21.54) and Norwegians (€39.01) across the border to Denmark (€10.75), and Danes over to Germany (€5) all in pursuit of cheap alcohol. The high prices are caused by heavy taxation of alcohol in the Nordic countries. This alcohol policy was agreed to reduce consumption and protect public health; in addition the state coffers benefit hugely. Norway, Sweden and Iceland, which charge the highest prices for alcohol are also among the five nations in Europe with the lowest annual consumption of pure alcohol per person. But drinking is on the rise with consumers happy to cross the border to save some cash, and it doesn't look like their trips will end soon. "It is clear to all that the widely divergent levels of alcohol taxation in member states distort the market and facilitate fraud and smuggling, but without the agreement of all member states nothing can change," Internal Market Commissioner Frits Bolkestein said. Unanimity on the issue is unexpected, leaving many national governments considering whether they should lower alcohol taxes to keep drinking buying at home. (EUobserver.com)

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