Finland is expensive

Sunday, February 4, 2007 at 18:14 | Posted in absurd, Estonia, eu, Finland, tallinn | 5 Comments

Andre and Thomas raised some questions in comments to my earlier posts about price level in Finland. It is an expensive country to live in and being able to do some shopping in Tallinn across the gulf is useful. The purpose of this post is to try to explain what you would want to buy in Tallinn rather than in Helsinki and why.

Thomas was wondering about the cigarette papers. It beats me that the vendors in Finland are asking a ridiculous price for the papers. It is not a matter of tax, as Thomas seemed to think. I once asked a Finnish customs officer about it and was told that there is no custom fee or tax imposed on the papers and I am accordingly entitled to bring as much as I need for personal consumption.

Most shops in Finland only have Rizla’s fag papers. A leaflet of 50 sheets costs around one euro. A box of 50 leaflets (2500 sheets) would accordingly cost 50 €. My recorded consumption of cigarette papers is about five boxes a year, i.e. 250 leaflets or 12.500 sheets.

As the market in Tallinn provides also cheaper brands than Rizla, I pay about 80-90 Estonian crowns for a box of 2500 sheets. That is less than 6 € so I collect at least 44 € for each box that I buy in Tallinn. It makes more than 200 € a year.

Thomas also asked about the price of beer in Finland. Beer and booze have traditionally been heavily taxed in Finland. Let me start with booze. That is something to illustrate our governments’ utmost stupidity. It does not matter which party has been in the coalition, all of them have made a bad record.

Finland joined the EU in 1995. A transition period of nine years allowed Finland to limit the amount of alcoholic beverages to be imported for personal consumption from other EU countries. At that time it was foreseeable that Estonia would join the EU within the transition period.

A sensible government would have dropped the booze tax in steps. The prize of a 0,5 litre bottle of vodka (which is the number one booze in the country) could have been sunk by approximately one euro a year. The negative effects of increasing drinking could have been spread over many years which would have allowed to fight them back. The price of vodka would still be higher than in Estonia but not as much higher to motivate bringing home large amounts of booze. As Estonia is going to have to increase their alcohol tax within the next few years in accordance to their transition period with EU, there would be a realistic chance to discuss raising the alcohol tax in Finland as well.

The governments in various party colors chose to do nothing during the transition period. As late as the autumn of 2003, the Finnish government asked the EU to prolong the transition period. They obviously thought that Finland would be able to continue the high alcohol prize level forever. Brussels did not agree, though. They understood that since nothing had been done by the Finnish government during the transition period, it would be very likely that nothing would be done during a prolongued transition period.

The transition period ended on 1st January 2004. The closest EU country with lower price of alcohol at that time was Germany. Some tours were organized to bring home extensive amounts of booze and beer but the real issue started on May 1st as Estonia became a member of EU.

The Finnish government waited to the very last moment to decrease the prize of booze in the government monopoly liquer stores. The new prices took effect just a couple of weeks before the Estonian membersip. It was done with the worse possible way. The price is still high enough to motivate massive import from Estonia. On the other hand, drinking has increased and all the negative effects of that have exploded upon the face of the society. And the income of the government has dropped.

A 0,5 litre bottle in the monopoly would cost around 7 or 8 euros. I do not remember the exact price as I obviously do not buy my stuff there. The price in Tallinn is at the cheapest around 4 euros.

The beer is another story of stupidity. The Finnish breweries export hundreds of thousands of litres of beer each year to Estonia. And Finnish tourists bring the stuff back to Finland. Most Estonians would not touch the stuff and I do not blame them. Who would like to drink raindeer’s piss anyway?

There is a fresh bill in the parliament that would regulate the sales of beer. It would no longer be possible to sell larger amounts for a cheaper price. A 12 pack (4 litres) costs around 8-9 euros. A single bottle of 0,33 litres would cost around 1 €. By regulating the sales the Finnish government would hurt the local vendors as more and more of the Finnish brewed raindeer’s piss would be sold in Tallinn rather than Helsinki.

As for cigarettes, a pack of my favorite fags costs at least 4 € in Helsinki and 28 Estonian crowns in Tallinn which is less than 2 €. It is a brand popular in Finland and it is being exported to Estonia and sold in Tallinn for Finnish tourists exclusively. Estonians do not want to smoke it and it is not sold outside Tallinn.

Estonia’s transition period on tobacco tax is going to run out in 2009. The transition period allows older EU countries like Finland to limit the import as long as Estonia does not take out the minimum tax. Alas, I am only allowed to bring in one cartoon (10 boxes or 200 cigarettes) at the time. The difference in price is big enough to cover the boat ticket.

Finland is an expensive country to live in. A free lance journalist with fluent Estonian is interested in job offers south of the Gulf. Do I have to spell out why?

5 Comments »

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  1. That’s a pretty bizarre situation. You’re right – it is stupid – because money is just leaking out of your country.. Sounds like a great set up for Estonia, but probably not the best thing, economically, for Finland.

    You’re definately being duped rolly-paper wise – a pack of Rizlas here (100 papers) costs $1 Australian (0.61 euros). However, you can get a pack by a competing brand (60 papers) for 30 cents (0.18 euros).

  2. The fag papers seem to be a marginal product for the local vendors. I guess they just do not care about the market. Most people rolling their fags that I know either buy from Tallinn themselves or have a friend bring back the leafs for them. Which reminds me that I need to go shopping within a month.

    The alcohol stupidity dates back almost 100 years. There was a total prohibition 1919–1932 whereby smugglers made loads of money and the people were drinking more than ever before. This was substituted by a government retail monopoly. Beer up to 4,7 % alcohol was released to food stores as late as 1969, everything else is still sold by the monopoly.

    Politicians do not seem to understand that their ability to regulate in detail the life of citizens has reached its limits. It is not just alcohol. Another area is access to free information. Politicians still think they can control the flow of information by regulating broadcasting. That worked for 20 years ago but now that the info and entertainment are readily available in sources of our own choice, the age of traditional regulating politics is over.

  3. Uh, have you been to Sweden? We take the (“booze”) cruises to Finland to get cheap alcohol…

  4. I am aware that the stuff is even more expensive in Sweden. That was also the case in early 1980’ies as I lived in Sweden. Sweden’s geographical location is not the best possible in terms of convenient traveling to cheaper alcohol. Southern Sweden should have reasonably good ferry connections to Poland and Germany, both of which make much more sense as a target of booze tourism than Finland.

  5. […] tilastopiikki. Joskus iltapäivällä huomasin, että viime vuoden alkupuolella kirjoittamaani postitusta Suomen kalliista hintatasosta, erityisesti alkoholin verotukseen liittyvästä poukkoilusta, oli […]


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