Editor's Own / History

A Short History of … Scandinavia’s Alcohol Monopolies

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For anyone who’s had to put up with shocking prices at a Finnish airport, or has waited in line for hours at a Swedish Systembolaget, Scandinavia’s alcohol monopolies are nothing short of a shag. Despite that, a 2013 poll found that 74 per cent of Norwegians want to keep their alcohol monopoly in place…


In 1995 Harry Franzen, a grocer from Röstangå in southern Sweden, was persecuted for selling wine in his store. Franzen cited Articles 30 and 37 of the EU Constitution of 1993 to take his case all the way to the European Court of Justice in Luxembourg. Its decision: Systembolaget, government-owned alcohol store, would continue its retail monopoly.

Scandinavia contains some very heavy-handed welfare states, but these are, according to all statistics, also some of the most liberal nations in the world, so it’s strange that such a system persists. Indeed, it’s not just Sweden where the government controls your every glass. Norway has Vinmonopolet, Finland Alkos, Iceland Vínbúð, and even the tiny Faroe Islands have their Rúsdrekkasøla Landsins. Surprisingly, for anyone who’s seen Copenhagen on a Friday night, metropolitan Denmark doesn’t, and the purchasing age is sixteen in all shops (in the other countries, the drinking age is sixteen but the purchasing age twenty).


Norway


Norway prohibited alcohol in 1919, and wine producing nations unsurprisingly demanded reflexive policies for goods exported. Vinmonopolet was established in 1922 to deal with this; allowing Norwegians to buy wine in selected outlets.
Vinmonopolet (known to Norwegians as ‘polet’) has, like Systembolaget, had a history of legal challenges. In 1996 the European Court of Justice ruled that Vinmonopolet was in violation of EEA agreements. The Ministry of Care and Social Services quickly found a way around the problem, simply dividing it into Arcus, taking care of production, imports and distributions, and keep Vinmonopolet in charge of retailing, something made easier by the introduction of self-service machines replacing over- the- counter sales as early as 1999, with internet sales following soon after in 2002.

Surveys from the mid-90s show that the majority of Norwegians were in favour of dissolving the arrangement, but, amazingly, after the restructuring of 1996, public opinion has increased two-fold: a 2009 survey by Norsk Kundebarometer showing that 88 per cent of people were satisfied with the company, and a 2013 Gallup poll projected that 74 per cent of the population wanted to keep the monopoly in place. Economists have been quick to praise the company, particularly the number of products it was able to offer consumers.

Choice is indeed something the monopolies are very good at. Figures for 2010 show that Vinmonopolet offered more than 12,000 products, Systembolaget 9,000 and Alko 3,000, compared to only 1,500 products that Britain’s private supermarket, Waitrose, could provide. This year, Vinmonopolet offers customers nearly 17,000 products.


Sweden


In the nineteenth century, when Sweden was an industrial powerhouse, much of the population turned to alcohol as a source of comfort. Rapid industrialisation meant brännvin (distilled alcohol) saw increased production; to such an extent that the king had to get involved to slow the manufacturers down.

A referendum in 1922 advised the Swedish government by 51 per cent not to introduce total prohibition (like the other Nordic countries), so rationing was introduced instead. This persisted until 1955 in what was known as the ‘Bratt System’ (after its creator, politician Ivan Bratt) and required each citizen carry a motbok in which a stamp was added for each purchase. Naturally, people often used their friends’ or even strangers’ books as a way round.


Finland


The Finns have earned quite a reputation as heavy drinkers abroad. Unfortunately for them, statistics back the stereotype up: Finns consumed 12.3 litres of alcohol per capita in 2010, around ten litres more than their closest neighbour in the table, Denmark. Prominent Finns also don’t help in dispelling opinions: Jean Sibelius was well known to conduct three or four day binging sessions and former prime minister Ahti Karjalainen was a well-know binge drinkier, eventually sacked after he was arrested for drink driving.


Iceland


But perhaps the secret to Vínbúð’s success lies not in their taxation. Tax rates in stores are taken not on a percentage of the price, but are proportionate to the alcohol content. In other words, while the Finns are able to buy anything from Carlsberg beer to Russian Standard vodka in their alcohol stores, with the tax taken as a percentage of the price, Icelanders become much more weary at buying, say, aquavit, as its alcohol content, and therefore price will be much higher. Vínbúð, under the control of state-owned company ATVR, also holds a monopoly on the provision of tobacco.


 

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