Cheap alcohol is a Nordic headache

Finland and Denmark, both EU members, slashed alcohol taxes in the run-up to European expansion to combat cross-border shopping, while EU nation Sweden and non-EU Norway are both feeling the pressure to follow suit.

Police in Finland have reported a leap in alcohol-related violence and drink-driving offences since Helsinki cut alcohol taxes by 33 per cent on 1 March.

Since the Baltic countries joined the EU, groups of Finns have been going on so-called "vodka rallies" to Estonia, where supermarkets sell local brands as low as 4.5 a bottle, 24 hours a day.

Before 1 May, Finns could bring home one litre of spirits and 16 litres of beer, but since Estonia joined the EU, the size of your car is the limit. Private consumers can import hundreds of litres of booze within the free-trade area.

Some Finnish politicians argue that taxes should be raised again to redress rising alcohol consumption.

Norwegians cram ferries to Denmark and endure traffic jams into Sweden to take advantage of alcohol prices, pushed down by competition from accession states.

"Why should I queue up in a Norwegian wine monopoly to pay an outrageous price for wine and spirits when I can get it cheaply in Sweden?" said Karl-Erik Fredriksen, a 33-year-old Norwegian engineer who buys all his alcohol abroad.

There are no official statistics yet from Norway, but bank records show that the number of Norwegians swiping cards through payment terminals in Swedish stores rose 67 per cent in the last week of May, against the same 2003 week.

Ingjerd Schou, Norway’s social affairs minister, admitted: "We are facing a huge dilemma. When we see what is happening around us, we realise that the Nordic way of braking drinking with taxes and limited access is losing effect. We need to look at new ways to attack the problem."

Nordic people typically go on binges, but drink less by volume than continental Europeans, who consume smaller amounts more often. But Nordic alcohol consumption is on the rise.

"We haven’t swapped our way of getting drunk on the weekends with continental habits - we have combined them," Schou said.

Cheaper alcohol also threatens generous Nordic welfare systems. High alcohol taxes have theoretically helped to curb drinking and protect public health.

"There are limits to how long we can have higher taxes than our neighbours," said Per-Kristian Foss, Norway’s finance minister.

Meanwhile, home-made alcohol has killed 15 Norwegians since 2002, putting in doubt the deterrent value of taxes if they spur more people to drink illegal moonshine.