Distance and Cross-Border Shopping for Alcohol

Abstract

Since 1973 when Denmark joined the EEC, Danes have flocked to Germany to buy alcoholic beverages more cheaply than in Denmark. In the decades since accession to the EU, the Danish duty-free allowances and the price relations between Denmark and Germany have changed several times. Each change has been followed by adjustments in consumers' shopping behaviour. As people living at different distances from the border face different travel costs, it is likely that they have different purchasing behaviour and react dissimilarly to changing terms. The purpose of this paper is to explore how people at different distances to the border use the opportunity for purchasing alcoholic beverages in Germany and how their purchases have changed. The analyses are based on data gathered by face-to-face interviews with Danes crossing the border on their way back from Germany. Eight surveys carried out between 1986 and 2003 are included in the study. It is concluded that distance plays a decisive role in cross-border shopping for alcoholic beverages. In general, those living within 25 km from the border exhibit behaviour significantly different from travellers from larger distances.