Already in May 2020, Rehm et al predicted that two mechanisms at play during the Covid-19-pandemic would affect alcohol consumption (1). The first mechanism, hereafter referred to as crisis impact, relates to the structural effects inherent to the pandemic itself. It is caused by increased psychosocial distress triggered by the interaction of financial difficulties, social isolation, job losses and uncertainty about the future. This was predicted to lead to an increase in alcohol consumption and more harmful consumption patterns. The second mechanism, hereafter referred to as crisis-response impact, relates to the effect on alcohol consumption of the measures enacted in response to the pandemic. These restrictions were predicted to reduce alcohol consumption. The prediction of Rehm et al was that the crisis-response impact would be stronger initially, with the crisis impact taking over once restrictions eased.
A year on from the article by Rehm et al (1), the crisis impact can be said to have presented itself without major variation in most countries hit by the pandemic. The crisis-response impact also exhibits similarities across countries. In Europe, most countries, if not all, have taken actions aiming at restricting physical and social contact and several of these measures directly and indirectly targeted alcohol consumption. This included restrictions on alcohol sales at restaurants, pubs and bars as well as bans on social gatherings. As shown by the Oxford COVID-19 Government Response Tracker (OxCGRT), the overall stringency of these measures is rather similar across European countries, although with somewhat different actions taken and different dates for its implementation (2).
This study, however, focuses on an asymmetrical impact of the crisis-response on alcohol consumption, namely the effects of closed borders and severe restrictions on cross-border travel on sales and consumption of alcohol.
Alcohol consumption and closed borders
The possibility of travel abroad fell sharply during the pandemic from March 2020 onwards (see 2, 3) and thereby restricted the opportunity for residents in countries with relatively high alcohol prices to purchase alcohol in lower-price countries to bring back home. As such, border restrictions had an asymmetrical impact on alcohol availability by affecting residents in European countries with a large share of cross-border alcohol purchase inflow (inflow countries) differently to residents in countries with low net levels of cross-border alcohol movements (stable countries) or countries with a large share of cross-border alcohol purchase outflow (outflow countries).
In line with previous alcohol policy research, restrictions in alcohol availability, whether it is affecting on-trade, off-trade or cross-border purchases, would be expected to reduce alcohol consumption even when taking into account some reallocation between or within purchasing channels (see e.g. 4).
For inflow countries, a large share of alcohol consumed by its residents is not recorded within the country and for outflow countries, recorded sales include a large share of alcohol that is purchased by visitors and consumed outside the country and vice versa. In these countries, recorded alcohol consumption (sales - hereafter also referred to as RAC) thus diverges from actual consumption. Estimations of the actual level of per capita alcohol consumption is therefore a challenge (for an overview of unrecorded alcohol in Europe, see 5, 6).
The closing of borders during the pandemic, however, meant that RAC also in these inflow and outflow countries can be expected to closely reflect actual domestic alcohol consumption, providing a unique possibility to study this phenomenon in a comparative context.
In Northern Europe, there is a historical concentration of cross-border shopping to two primary border regions: Nordic-Baltic and Benelux-France + the British Isles (see 7, 8). Following the trends in RAC in these countries should thereby provide insights into the impact of the pandemic on RAC in a cross-border context. Comparative analysis of the asymmetrical effect of cross-border restrictions between countries should in turn improve our understanding of the magnitude and movements of alcohol between different countries in Europe.
Cross-border purchases of alcohol in Europe
In a recent overview study on the cross-border trade of alcoholic beverages within the European Union (EU), three main concerns associated with cross-border alcohol purchases were identified: its impact on public health, on fraudulent behaviour (e.g. smuggling) and on economic distortion (8). All three share the same underlying causal mechanisms driven by (a) alcoholic beverages being price sensitive (e.g. 9, 10) (b) the existence of substantial excise duty differences (and consequently price differences) between EU countries (see e.g. 11) (c) the legal possibility in the EU to cross from one EU country to another with almost unlimited quantities of alcohol for own use without further payment of excise duties in the country of consumption.
From a public health point of view, extensive cross-border inflow of alcohol may increase total alcohol consumption, and alcohol-related problems, through two main processes. Firstly, by directly increasing accessibility of cheaper alcohol. Even if residents substitute some domestic purchases with purchases abroad, the net effect of cross border purchases is likely an increase in total alcohol consumption as an effect of access to alcohol at a lower price. Secondly, by dampening the will to use excise duties as a public health tool for fear of losing purchases to neighbouring states. As an outspoken reaction to the significant inflow of alcohol, Denmark, Estonia, Finland and Sweden have for the last decades taken decisions to lower the excise rates, either actively by tax cuts (e.g. Sweden in 1997; Denmark in 2003 and 2019; Finland in 2004 and Estonia in 2019) and/or by keeping the rates on a stable nominal level.
Data and most, but not all, studies from these inflow countries in northern Europe have provided evidence of both of these two mechanisms (Denmark: (13); Estonia: (14, 15); Finland: (16, 17); Sweden: (18, 19)). Studies in other countries in Europe are only fragmentally available. A recent survey study of 6250 respondents across all 25 EU MS in 2018/2019, however, confirms the pattern of significant variations in cross-border alcohol purchasing across countries, with high priced countries tending to show the highest volumes. (8).
Table 1 provides an overview by categorising countries as inflow, outflow or net stable depending on knowledge of the cross-border purchase streams before the pandemic. Where possible, information is taken from national alcohol consumption surveys. Where such surveys do not exist, a triangulation of excise duty rate differences, the presence of specialised border shops and news articles is used (see appendix, table A1).
Four typical inflow countries are identified with a net balance of substantially higher volumes of inflow than outflow (SE, NO, FI, DK). Two countries are identified as typical outflow countries (LV and LU). A few countries are identified as having higher outflow than inflow or vice versa for some beverages but low or net stable flow for others. Remaining countries are classified as net stable.
Table 1
Preliminary categorisation of countries in relation to cross-border purchase flows.
Study countries
|
Category
|
Belgium (BE)
|
Net stable/inflow
|
Germany (DE)
|
Net stable / outflow
|
Denmark (DK)
|
Inflow
|
Estonia (EE)
|
Inflow/outflow
|
Finland (FI)
|
Inflow
|
France (FR)
|
Net stable / outflow
|
Ireland (IE)
|
Net stable / Inflow
|
Lithuania (LT)
|
Net stable / inflow
|
Latvia (LV)
|
Outflow
|
Luxembourg (LU)
|
Outflow
|
The Nether-lands (NL)
|
Net stable
|
Norway (NO)
|
Inflow
|
Poland (PL)
|
Net stable
|
Sweden (SE)
|
Inflow
|
* See appendix, table A1 for data and comments |
Hypothesis
The restrictions put in place during the Covid-19 pandemic to limit the spread of infection represent an unprecedented reduction of the physical and economic availability of alcohol for all residents in the affected territories. This applies to Europe in general, and inflow countries in particular. Following the prediction of Rehm et al. (1) one would therefore expect a reduction in alcohol consumption from the start of the pandemic response in all, or a majority of European countries. Results from recent analyses of survey data on drinking frequency also suggest that this has been the case (20). However, the lack of a clear connection between frequency and volume in self-reported data makes it difficult to draw definitive conclusions with regard to the effects on total consumption. This paper will test the hypothesis that total alcohol consumption has fallen during the pandemic in the European countries included in the study.
The crisis-response impact on cross-border alcohol purchases is of particular interest since trends in RAC is affected by changes in volumes of cross-border purchases. Operationalising the hypothesis and taking into account the effect on RAC of changes to cross-border purchases, this paper predicts the pandemic to have the following effect on RAC:
H1:RAC will show a decreasing trend from the pandemic in countries with low levels, or net low levels, of cross-border purchases of alcohol.
H2:RAC will show an increasing trend from the pandemic in cross-border inflow countries compared to H1 countries.
H3:RAC will show a stronger decreasing trend from the pandemic in cross-border outflow countries compared to H1 countries.
Following from the hypothesised effects on RAC, one could expect H1 results to be indicative of effects on total consumption.
Previous studies on the relaxation of cross-border purchasing rules have found a degree of additionality to cross-border alcohol purchases, meaning they are not just replacing domestic sales, but contributing to an increase in total alcohol consumption. Consequently, inflow countries in H2 should see a stronger decreasing trend in total consumption than the other countries in the study, despite an expected RAC increase, as cross-border alcohol accessibility is reduced. In addition, the change in total alcohol consumption in outflow countries should be smaller than decreases in RAC, likely similar to H1 countries.
Furthermore, looking at RAC development across different categories of countries and combining it with findings from individual country studies on cross-border purchases, it should also be possible to provide a rough estimate of any potential degree of additionality in purchases stemming from access to cheaper alcohol across a border. Although going beyond the testing of the paper’s three main hypotheses, looking at a potential additionality is of interest as previous studies have only ever been able to look at situations of increased accessibility of cross-border alcohol.