Alcohol drink preferences in Iceland have been changing

It is fair knowledge that the Nordic countries except for Denmark (i.e. Finland, Iceland, Norway, Sweden) have their retail liquor stores owned by their governments, and I have written about this before (Why are there wine monopolies in Scandinavia?). In practice, this does not necessarily mean that alcohol sales are restricted, or that there is a poor selection, but simply that the government makes some of the profit (Why is wine often cheaper in Sweden than elsewhere?).

Iceland has in the distant past had a bad situation — indeed, there was apparently once a time when workers were paid (at least partly) in alcohol. Moreover, it is not exactly in a geographical location suitable for vineyards, and it does have miserable weather a lot of the time. So, spirits have historically been the cultural norm, as it was throughout northern Europe . The government has been trying to get things changed, as discussed below.

First, we can look at the relevant data from Statistics Iceland (Alcohol consumption decreased by 4% between years).

You will note from the graph that per capita alcohol consumption has plateaued in recent years, with beer consumption now being equal to wine + spirits combined. However, wine consumption has been greater than spirits since 2003. Good!

Note that there was actually a beer prohibition from 1915 to 1989, and that beer consumption did not pass spirits until 1995. The advertised Icelandic motto is now: Drink good beer with good friends. The government ban had originally been placed on all alcohol, but wine was legalized in 1922; and in 1935 all alcoholic beverages with >2.25% alcohol were legalized, except beer (Wikipedia). Note that the ban on beer had as much to do with independence (from Denmark, which was associated with a preference for beer consumption) as temperance (Why Iceland banned beer; Why beer was once illegal in Iceland).

I was recently in Iceland, and can report on the situation first hand. First, the draft beer is very nice, the local lamb is good, and the fresh fish is excellent. The scenery is superb, which is why there are >2 million tourists per year compared to less than 400,000 locals.

The local liquor stores that I checked out (Vínbúðin = The Wine Shop) were quite small, and had limited selections of wine, which were mostly from western Europe. Indeed, most of the shelves had bottles of Icelandic gin and aquavit. Furthermore, the cheapest US or Australian wines were $US20 for the current vintage, which is hardly cheap. This is apparently because of the taxes (Alcohol tax: Iceland pay the most in Europe).

Finally, I can suggest that vineyards may actually one day appear in Iceland. There are now several absolutely massive glasshouses, growing things that you don't expect, such as tomatoes and bananas (Why the world’s coldest country grows bananas). Their electricity is very cheap, and renewable, coming from geothermal springs (steam), hydro-power (water) and wind-driven generators (Wikipedia), and so they can have a lot of lights on a lot of the time, along with geothermal heaters. For a more naturalistic plan see: How do you grow trees in a treeless land?

Changes in alcohol consumption since 1990 (arranged by country, age and gender)

The non-drinker equivalence (NDE) is one measure of the relationship between alcohol consumption and health. It measures the level of alcohol consumption at which the risk of health loss for a drinker is equivalent to that of a non-drinker. For our purposes here, it can be used as a measure of change in alcohol consumption, if we measure NDE at different points in time.

One publication that does this is:

Population-level risks of alcohol consumption by amount, geography, age, sex, and year: a systematic analysis for the Global Burden of Disease Study 2020.

It has a giant table that contains the number and proportion of the population consuming in excess of the non-drinker equivalence in 2020, and the percentage change in NDE since 1990. I will look at this percentage here, because it allows us to sub-divide the population and look at the data in various ways.

Data are shown in that table for the whole world plus separately for each of 20 sub-regions, and separately for males and females. There are also three age groups considered: 

• 15–39 years    roughly: Millennials + Generation Z (15–44 years)
• 40–64 years    roughly: Generation X (45–60 years)
• ≥65 years       roughly: Baby Boomers (≥61 years)

Here is my summary of the data from that table. The numbers refer to the percent change in NDE in the 30 years between 1990 and 2020, which for our purposes simply measures the change in alcohol consumption (as a proportion of the population consuming a specified amount of alcohol).

Looking at the Global data (row 1), you will note that there was a much bigger reduction among the two groups of younger people (for both sexes) than among the oldest group, although the latter group also reduced their consumption. So, alcohol consumption has generally been decreasing over the past three decades, and more so among younger people.

If we look at those separate regions that have had a consistent large decrease across all age/gender groups, it includes: 

High–income Asia Pacific; Southern Latin America; Oceania; and Central sub-Saharan Africa.

If, on the other hand, we look at those regions that have had a consistent increase across all groups, there has been:

Central Europe; Andean Latin America; Tropical Latin America; South Asia; and Eastern sub-Saharan Africa.

The biggest increases have been among:

• Tropical Latin America; and Andean Latin America
• Central Europe
• South Asia; and Southeast Asia among males
• Australasia among older people.

Among the youngest people, we have had the biggest reduction among:

High–income North America; and then Eastern Europe; Australasia; and Western Europe.

Among the oldest people, we have had few reductions, and they were mostly small. The biggest increases were among:

Central Europe; Australasia; High–income North America; and Southeast Asia males.

Clearly the world of alcohol consumption has been changing over the past three decades. However, there does not seem to be much consistency among those regions showing similar patterns of change among themselves; so I do not think that I can say much more here. However, it is worth noting that, in a similar manner, per capita consumption in litres of pure alcohol across the 10 markets surveyed by IWSR has fallen by 20% since 2000 (How is the moderation trend evolving?).

Moreover, we do have to accept the fact that Baby Boomers are getting too old to drink alcohol as much as before, or they are (sadly) dying. The subsequent generations do not look like they are taking up the slack (yet?). So, given the patterns noted above for the youngest generation, we might seriously wonder:

Why the wine trade should talk up its entry-level offering.

With older, high-spending, wine-loving consumers leaving the market, here Patrick Schmitt wonders whether the drinks trade should put more emphasis on inexpensive wines for a less affluent, younger generation. Indeed so.