Unrecorded alcohol consumption: its economics and its effects on alcohol control in the Nordic countries

The starting point of this paper is the fact that no country has complete records of alcohol consumption. In addition to being a matter or statistical accuracy, unrecorded alcohol also plays an important role in alcohol policy discussions. Furthermore, its quantity is bound to basic economic laws. These latter two aspects are the main interest in this paper, which discusses, first, what is really meant by unrecorded alcohol consumption and what kind of categories are included in it. The next task is to discuss the economics of different categories of unrecorded alcohol and the mechanisms which lead to increases or decreases in them. The examples in this part of the paper come from the Nordic countries. Arguments about increased smuggling and illegal distilling have always been used against alcohol policy restrictions in the Nordic countries. Recently the level of travellers' alcohol imports and border trade have also been used for the same purpose. In the European Union the task to harmonize alcohol excise taxes is partly given to increased travellers' duty-free allowances and market forces. This policy has already led to reductions in alcohol taxation both in Denmark and Sweden.