Academic journal article Contemporary Drug Problems

Unrecorded Alcohol Consumption in the Netherlands: Legal, Semi-Legal and Illegal Production and Trade in Alcoholic Beverages

Academic journal article Contemporary Drug Problems

Unrecorded Alcohol Consumption in the Netherlands: Legal, Semi-Legal and Illegal Production and Trade in Alcoholic Beverages

Article excerpt

In the Netherlands, three sources of unrecorded alcohol consumption can logically be distinguished that may affect the estimates of total alcohol consumption based on sales: illegal spirits production, legal but unregistered homemade beer and wine production, and illegal imports. The effects of these sources result in an underestimation of annual per capita alcohol consumption based on official sales records. In this paper, an assessment is made for the Netherlands of the nature and possible impact of the sources of unrecorded alcohol consumption on the validity of per capita alcohol consumption figures based on sales data.

Illegal spirits production

Production and imports of alcohol in the Netherlands are highly regulated by law. Noncommercial home production of alcoholic beverages is allowed, but distilling remains a licensed activity, even when it is for personal use. Alcoholic beverages, along with several other goods such as soft drinks, are excisable. Before the major tax reforms that took place at the end of the 19th century, a large proportion of the budget of the central government came from excise taxes on a variety of goods (de Vrankrijker, 1969). Alcohol duties were an important source of state income. At the beginning of the 20th century, alcohol taxes contributed almost 30% of the total Dutch state budget (Gerritsen, 1993). In England and the US, by comparison, the share of alcohol taxes in the total state budget was even more, amounting to 40%. After the major tax reform at the end of the 19th century, from an indirect tax system to a modern, direct income tax, most duties were abandoned. The share of alcohol duty in the state budget dropped to less than 10% and declined further, after World War II, to the current level of about 1%. However, because the beginning of the 20th century was a time of temperance and of the fight against the "gin devil," excise on alcoholic drinks was not abandoned. Especially excise tax on distilled spirits was and is relatively high. The current, relatively high duty on distilled spirits has traditional roots, as beer became a popular drink only after the war, and wine has been relatively expensive due to import costs.

These high duties on spirits have in the past been the cause of illegal distilling. In the Netherlands, small-scale production of distilled spirits-as the "bouilleurs de cru" in France or farm production in Scandinavia-was and is virtually nonexistent. During the depression before World War II, and in the 1960s and 1970s, illegal production was considerable. In Figure 1, illegal stills are shown that were discovered by the fiscal police (FIOD) between 1968 and 1990 (Spapens & Horsten, 1990). In this period, the free-trade union of BElgium, NEtherlands and LUXembourg (acronym BENELUX, forerunner of the EU) put smugglers in the bordering provinces out of work, as duties on traditional smuggling goods such as butter, sugar and cigarettes were harmonized. Some smugglers then turned to illegal distilling. This is the reason for the high density of illegal stills in the Belgium-Netherlands border region. For the marketing of their goods, illegal distillers made use of the smugglers' infrastructure and their mostly Belgian network. Sentences for illegal distilling were (and still are) lower in the Netherlands than in Belgium; however, the marketing of illicit Dutch "jenever" was easier in Belgium because only a few cafes in Belgium got a permit for selling distilled spirits for on-premise drinking. Most of the moonshine produced in the Netherlands in this period was thus sold clandestinely in Belgium.

The number of confiscated illegal stills in the Netherlands (an average of three stills annually) has declined steeply in recent years, and tax authorities claim that at this point in time illegal production is virtually nonexistent (one or two at the most). Large-scale production of illegal spirits is technically difficult, and the risk of detection in this densely populated country is high. …

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