Nordic ALCOHOL and DRUG policy network
NordAN
ESTONIA
Government of Estonia
Kristen Michal’s cabinet, formed on July 23, 2024, represents a steady continuation of Estonia's recent political trajectory following Kaja Kallas’s appointment as the EU High Representative for Foreign Affairs and Security Policy. The coalition, comprising the Reform Party, Estonia 200, and the Social Democrats, maintains the alliance established post-2023 parliamentary elections, allowing Michal to proceed with a governance plan that reflects his party's core goals.
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While Michal's cabinet agreement addresses a range of priorities, social and public health issues are part of a broader agenda. These include refining the structure of retirement savings options, adjusting family and parental benefits, and enhancing welfare services through more integrated support systems. Plans to expand mental health services, such as increasing school psychologists and making mental health interventions more accessible, also reflect the cabinet’s approach to public health. In healthcare, efforts are directed towards maintaining a sustainable, solidarity-based insurance model, advancing patient-centered digital health records, and boosting dental care compensation rates.
In addition to social and health initiatives, the cabinet's agreement covers a wide spectrum of other priorities aligned with Estonia’s strategic and economic development. This includes enhancing infrastructure and energy systems, strengthening national security, and bolstering Estonia's technological capabilities. By addressing a comprehensive mix of domestic policies, the cabinet under Michal seeks to position Estonia for sustained growth and resilience across key sectors.
Prime minister Kristen Michal
Alcohol consumption trends
In 2023, average alcohol consumption among Estonian adults declined to 10.9 liters of absolute alcohol per person, a 2.7% reduction from the previous year. This decrease has been attributed to economic recession and rising living costs, which influenced household spending patterns and reduced alcohol use, particularly among women. Nonetheless, alcohol remains widely accessible and affordable, with strong alcoholic drinks and beer continuing to dominate consumption at 43% and 35%, respectively. Weekly consumption averaged about a quarter-liter of vodka, three cans of 0.5-liter beer, half a bottle of wine, and half a 0.33-liter can of other light alcoholic beverages.
The impact of alcohol on public health remains significant, with 627 alcohol-related deaths in Estonia in 2023, over half of which were due to alcoholic liver disease. This persistent public health issue underscores the need for comprehensive policy solutions, as alcohol-related premature mortality and morbidity impose substantial costs on the healthcare system and economy. Analysts estimate that reducing the burden of alcohol-related health issues could potentially save the Estonian state over 700 million euros annually in health-related costs and lost productivity.
Meanwhile, alcohol excise revenue rose by 9.1% in 2023, amounting to 263 million euros. Although this represents a financial gain for the state, the benefits are tempered by the social and health-related costs associated with high alcohol consumption. Estonian consumption habits show resilience despite economic pressures, yet the observed decrease in 2023 highlights the influence of economic confidence on drinking behavior, pointing to an opportunity for reinforcing public health campaigns and policy interventions targeting the affordability and accessibility of alcohol.
More information: Yearbook 2023 - Alcohol market, consumption
and harms in Estonia
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Alcohol taxation
Estonia’s approach to alcohol taxation has evolved significantly over the years, primarily to address both fiscal and public health objectives. Since 2005, excise taxes on alcohol have increased multiple times, driven initially by fiscal goals in response to economic needs but later incorporating public health concerns. Early increases, such as those during the 2008 financial crisis, sought to make alcohol less affordable and increase state revenue. However, by 2012, Estonia adopted a more structured annual increase of 5%, marking a shift toward a more consistent long-term approach, albeit still perceived as modest by public health advocates.
The introduction of larger, one-time tax hikes under Prime Minister Taavi Rõivas’s government in 2015, including a 15% increase in 2016, signaled a stronger commitment to reducing alcohol consumption. These tax increases were complemented by the alcohol policy green paper, which formalized the government’s focus on limiting alcohol-related harm. Despite these intentions, subsequent governments had to navigate challenges posed by Estonia’s cross-border alcohol trade with Latvia, where price differentials encouraged Estonians to buy alcohol more cheaply, significantly affecting excise revenue.
Under Jüri Ratas’s first government, excise tax adjustments became a balancing act between reducing consumption and limiting cross-border trade. A significant 90% tax increase on beer in 2017 sparked a surge in cross-border alcohol purchases from Latvia, forcing Estonia to scale back planned increases. By 2018, the government halted some future tax hikes to curb the economic impact of border trade. Ultimately, this period highlighted the complexity of using excise taxes as both a public health tool and a revenue source, especially in a cross-border context.
Most recently, a 2024 amendment proposes further changes, advancing a 5% increase initially set for 2026 to mid-2025, with additional 10% increases in 2026 and 5% annually until 2028. These planned hikes reflect the government’s continued reliance on excise taxes to control consumption while ensuring a revenue stream. As alcohol remains widely affordable, Estonia’s tax policy remains a pivotal lever in managing consumption patterns and cross-border trade, showing how economic and health priorities intersect in alcohol policy.
Alcohol availability
Alcohol remains highly accessible in Estonia, with a 2022 survey revealing that 88% of respondents can reach an alcohol outlet near their residence within ten minutes. For only 1% of the population, the nearest alcohol outlet is more than half an hour away. By early 2023, Estonia had issued 9,334 alcohol sales permits across catering, retail, and wholesale sectors, underscoring the ease of access. Notably, retail stores with alcohol sales permits are concentrated in urban areas, with 66 outlets per 10 km² in Pärnu, 56 in Tallinn, and 44 in Tartu.
Estonia’s alcohol availability laws have seen gradual restrictions since 2008, when the Parliament centralized time-based limits, prohibiting alcohol sales outside of 10 a.m. to 10 p.m. Before this regulation, municipalities set their own hours, often creating loopholes where neighboring municipalities had differing restrictions. Alongside these time-based limits, a stricter stance on underage possession was introduced, prohibiting minors from carrying alcohol and making their guardians responsible for ensuring compliance. These changes marked Estonia's initial steps toward stronger national alcohol regulation, though availability remains higher compared to Nordic countries with retail monopolies.
In 2019, Estonia further limited alcohol visibility in stores by mandating that alcohol displays be separated from other products and not visible from outside or main shopping areas, unless structural constraints make this infeasible. This policy intends to reduce impulsive alcohol purchases and aligns with broader public health goals to limit alcohol exposure. Despite these regulatory steps, however, Estonia’s high density of alcohol outlets continues to make it far more accessible than in Nordic countries, maintaining a notable contrast in regional alcohol control strategies.
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Source: Yearbook 2023 - Alcohol market, consumption and harms in Estonia