Image: Yle

Estonia’s small language group, with just over a million native speakers worldwide, manages to support a surprisingly vibrant literature scene. One of the reasons for that is the booming alcohol retail industry, set up largely to cater to Finnish tourists looking for cheaper beverages than they can find at home.

That’s because some of the money raised through alcohol taxes are channeled into cultural funds that help support many of the books published in Estonian.

The Eesti Kulturkapital fund was established during the country’s spell of independence between the first and second world wars. It was resuscitated in 1994, and is now largely funded by the proceeds of taxes on alcohol, tobacco and gambling.

Estonian law stipulates that 3.5 percent of all alcohol and tobacco tax revenue, and 43 percent of gambling tax proceeds, should be turned over to the fund. Last year that translated into 12.7 million euros from alcohol and tobacco sales, and around 3.5 million euros from the gaming industry.

Although the gaming proceeds rose by a few percent last year, money from alcohol and tobacco sales jumped by more than a sixth.

No cultural ringfencing of Finnish alcohol taxes

Eesti Kulturkapital supports both cultural activities and sporting endeavours. Some 29 percent of the fund’s grant money was allocated to sports last year, with composers taking the biggest cultural funding and literature around 6 percent.

The cash has helped fund a boom in publishing, with the peak year of 2008 seeing nearly 4,700 titles hitting the shelves. That has declined to around 4,000 Estonian publications in 2012, but that is clearly more than in Finland when adjusted for the smaller population.

The Finnish Commerce Federation found that 84 percent of Finns visiting Estonia had bought alcohol, indirectly contributing to a healthier Estonian cultural scene. In all Finns imported some 28.5 million litres of alcohol from Estonia.

If the same volume of booze was purchased at Alko or in bars and pubs, the Finnish state would receive around 300 million euros. That would not have an impact on sport or culture, however, as alcohol tax revenue is not ringfenced in Finland.