Sweden should slash alcohol tax by 40 percent: government study

Sweden should slash its traditionally high taxes on hard liquor by 40 percent to get Swedes to purchase more of their booze at home where the government can keep tabs on their drinking habits, a government commissioned report recommended on Monday.

"To break the pattern of the strong increase in travel-imports of spirits and to strengthen the Swedish alcohol policy's legitimacy, we suggest that the tax on hard liquor be lowered by 40 percent starting on January 1, 2005," head of the study Kent Haerstedt said in a statement.

Swedish Prime Minister Goeran Persson of the ruling Social Democratic party said last week that he was in favor of lowering the country's alcohol taxes, among the highest in the world, but that he would wait for the results of Haerstedt's report before issuing a formal proposal.

Swedish drinks monopoly Systembolaget's sales have plummeted since the European Union last January forced the country to raise the legal limit on alcohol imports, allowing Swedes to shift crates and crates of drink back from neighboring countries where alcohol is much cheaper.

The EU's May 1 enlargement to include new member countries, including nearby Baltic states where alcohol sells at a fraction of the Swedish price, as well as Finland and Denmark's decisions to slash their alcohol taxes, has only aggravated the situation.

While Systembolaget spirits sales have tumbled by 13.4 percent so far this year, Swedes' consumption has increased from 10.3 liters of pure alcohol per inhabitant (15 years and older) for the full year 2003, to 10.6 liters from July last year to July this year.

"This increase relates solely to an increased import of alcohol," Haerstedt said.

Critics claimed that the suggested tax cut would greatly increase acute alcohol-related injuries from falls, abuse and crimes carried out while under the influence.

"If this proposal goes through it will contribute to more young people becoming alcohol poisoned, more women being abused and more people ending up in the hospital with alcohol injuries," head of the opposition Christian Democrats Goeran Haegglund said in a statement.

Haerstedt admitted that lowering drink levies would have some negative consequences, like increasing the country's hard liquor consumption by eight percent and the total alcohol consumption by two percent.

To counter the trend towards increased consumption, the reports suggests that Sweden push for a joint European Union strategy to fight the increased imbibing, like pasting warning labels on all bottles containing alcohol.

The report also suggests harsher penalties for illegal possession of alcoholic beverages, and more intense customs controls along Sweden's borders.