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Friday 22.06.2018 | Name days: Ludmila, Laimdots, Laimiņš

Opinion: rise of alcohol market in Latvia is tied to higher excise tax in Estonia

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Baltic news, News from Latvia, BNN.LV, BNN-NEWS.COM, BNN-NEWS.RU«The rise of the alcohol market in Latvia is related to the higher excise tax in Estonia, which motivates residents who live close to the border to buy alcohol in Latvia and entrepreneurs to open new alcohol stores along the border,» says Altia Latvia commercial director Normunds Ozolins.

He reminds that, according to indexes compiled by the State Revenue Service on excise goods turnover in 2016, 7% more decalitres of alcoholic drinks were provided for consumption in Latvia than the year before. «This year’s volume will also grow. However, we expect this year’s volume to be lower than last year’s.»

«The development of the alcohol market in Latvia is not related to increased alcohol consumption, but rather the increase of trade along the Latvian-Estonian border,» Ozolins says, adding that a new trade location opened up not long ago.

He notes that Estonia’s excise tax rate for alcoholic beverages is considerably higher than the rate in Latvia. Although the different between Latvia and Lithuania is smaller, excise tax rate on alcohol in Lithuania is higher than Latvia’s. At the same time, he believes Latvia’s excise tax rate on alcohol in Latvia will increase this year. However, this increase is not expected to impact the market, because Latvia’s excise tax rate remains below that of neighbouring countries.

Ozolins predicts that mutual competition among alcoholic drinks producers in Latvia will not change much this year. «The market remains stable and predictable,» Ozolins notes. He explains that predictability of the country’s tax policy is very important to market participants.

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