The government’s decision to increase the excise duty on alcoholic beverages has led to a significant increase in prices, causing a decline in sales and a loss of customers for liquor stores in border region, including Drenthe and Groningen. The move, intended to curb alcohol consumption and improve public health, has driven Dutch consumers across the border to neighboring countries where alcohol is notably cheaper.
Price hike leads to cross-border shopping
According to a report by the Dagblad van het Noorden, the price of alcoholic beverages in the Netherlands has increased by 16% since January 2023. This has led to a surge in cross-border shopping, with many Dutch customers traveling to Germany and Belgium to purchase cheaper alcohol.
The price disparity between the Netherlands and its neighboring countries has widened, with certain alcoholic products being up to 50% cheaper across the border. This has resulted in a significant loss of revenue for liquor stores in the border regions, who have seen their sales decline by up to 40%.
While the Dutch government’s motive behind the alcohol price hike was rooted in efforts to curb consumption and encourage public health, the repercussions have hit businesses hard. Small enterprises heavily reliant on cross-border trade are facing the brunt of the policy, with many teetering on the edge of closure.
In response to the crisis, the Dutch government is contemplating measures to mitigate the damage. Options on the table include a reduction in alcohol tax specifically for border regions and offering subsidies to businesses in these areas. However, the government is also cautious about the potential consequences on public health if alcohol tax is lowered, potentially leading to an upswing in alcohol consumption.
Small businesses hit particularly hard
This situation has left businesses in Dutch border regions struggling to navigate the impact of increased alcohol prices. Sales are plummeting, and numerous enterprises face the grim possibility of shutting their doors for good. Small businesses, lacking the resources to compete with their larger German counterparts, are finding themselves in an even more precarious position.
The cabinet is now facing a crucial task of finding a balanced solution that addresses the concerns of both businesses and advocates of public health.
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