Three months of restrictions on alcohol sales have led to a decline in alcohol sales and a significant blow to the budget. At the same time, representatives of the alcohol industry are convinced that people have not reduced their drinking.
They wanted the best, but it turned out as always... A decline in alcoholic beverage sales is noted across all categories of alcohol. The overall figure is minus 8%. The situation is even worse for beer — minus 14%. This threatens the budget with losses of tens of millions of euros, and the worst part is that there are few hopes for improvement. Experts believe it will only get worse.
The reason for such gloomy forecasts is the government's intention to raise the excise tax on strong alcoholic beverages again starting in March 2026 (the treasury needs additional funds), with further increases planned for 2027 and 2028.
What this will lead to is already clear. People will buy less alcohol, sales will drop to rock bottom, and the budget will incur financial losses instead of profits. The gap created by the failure of the tax plan will have to be hastily patched up through external borrowing (our favorite way to solve all problems), redistribution of funds, or increasing other taxes.
In general, the prospects are bleak. Despite expectations, people have not reduced their drinking; they have simply adapted to the new realities. As reported by LSM, there is an influx of buyers from Latvia in the Valga alcohol markets. Some have dusted off their home distilleries, believing that their own is better and cheaper. Others have started frequenting illegal local spots. And alcoholics have even switched to surrogates like lotions and cheap colognes.
As stated in the program "Doma Square" by the Executive Director of the Latvian Alcohol Industry Association, Davis Vitols, in some places the sale of cologne has already increased several times.
All this suggests that the uncompromising war of deputies against the harmful habits of Latvians will backfire — on the industry, which is one of the largest taxpayers, on the budget, and on the economy, where the share of the shadow market will increase. And, paradoxically, even on the health of the population, as the consumption of alcohol of questionable origin and quality (not to mention colognes, lotions, and denaturates) will inevitably affect the mortality rate and life expectancy of our population.
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