Sweden's Wine Market: How Far Will Liberalisation Go?

The Swedish Supreme Court has ruled that online marketing and sales of wine from abroad may now be allowed as a private import, even if a Swedish parent company is involved in the administration of the company. Anja Zimmer takes a look at the background.

Reading time: 3m 45s

A long legal battle ends with Systembolaget's defeat (Photo: helmutvogler - Fotolia)
A long legal battle ends with Systembolaget's defeat (Photo: helmutvogler - Fotolia)

Winefinder ApS, a Danish retailer with a Swedish parent company, delivers wine to customers in Sweden. In response, the Swedish alcohol monopoly Systembolaget sued and lost.
 

The Supreme Court ruling

In its decision of 7 July 2023 (T 4709-22), the Supreme Court established that private online imports do not violate the Swedish Alcohol Act as long as it is a foreign company selling the wine to consumers in Sweden. This is true even if the wine is delivered by Swedish carriers.

Although the Danish Winefinder gets financial, IT and customer services from its Swedish parent company, the Court’s investigation did not find there were any sales activities taking place onsite in Sweden.
 

Private imports are justified

According to the Supreme Court, it is clear from the Alcohol Act and its preparatory works that such distance selling is a permissible form of private import; § 8a of the Swedish Alcohol Act stipulates that goods containing alcohol for the personal use of a person over 20 years of age and his or her family are exempt from tax when imported from another EU country. The limits for private imports are 110 litres of beer, 90 litres of wine and other fermented beverages (of which a maximum of 60 litres is sparkling wine), 20 litres of "middle market products" (mellanklassprodukter, 1.2 to 23% alcohol) and 10 litres of ethyl alcohol. These volumes may even be exceeded in individual cases if a person can prove that the drinks are intended for personal use or for that of the family. 

Online vs Offline (Source: Statista)
Online vs Offline (Source: Statista)
Wine by volume (Source: Statista)
Wine by volume (Source: Statista)
Average volume per capita (Source: Statista)
Average volume per capita (Source: Statista)

Little significance of online sales

The court case had dragged on for a long time, Winefinder has been delivering to Sweden for 16 years. Four years ago, Systembolaget sued the company and won in the first instance, but lost in the second and now in the Supreme Court.

The long delay could be due to the relatively low importance of online sales. E-commerce counts for a relatively small part of total alcohol sales in Sweden. According to Systembolaget, its e-commerce share of total sales was 5% in 2022 and 5.2% from January to June 2023. They therefore react quite calmly to the ruling: "The judgment is clear, Systembolaget has exclusive rights to retail in Sweden, both online and in stores. So Systembolaget’s mission to sell alcohol in Sweden with exclusive rights and with responsibility and good service and to inform about the risks of alcohol remains unchanged," Sara Norell, Director of Assortment, Purchasing and Supply chain at Systembolaget tells Meininger's. 
 

Long-term effects

Systembolaget is, however, concerned about the long-term effects: "In the long run, consumption and ultimately public health can be affected if alternative sales channels increase because it does not fit with the motives behind today’s protective legislation and the retail monopoly. Which in turn is based on research that consumption and harm are kept down if alcohol is sold by a state monopoly of commerce with limited availability and without driving additional sales. The retail monopoly is based on the so-called principle of disinterest." The principle of disinterest, she continues, "means that the private profit interest in the Swedish retail market is excluded in order to keep down alcohol consumption to protect public health." And this is accepted by three out of four Swedes, according to a survey by Systembolaget.

How satisfied are the Swedes with Systembolaget?

The Swedish vinjournalen launched a survey of 471 readers in the summer of 2022 and asked them, among other things, whether they were satisfied with the opening hours, service and variety of products in the shops. Here are some of the answers:

Opening hours:

  • 92% of respondents are satisfied or very satisfied with the opening hours

Service:

  • 97% are satisfied or very satisfied with the staff and their customer advice

Variety of products offered in shops:

  • 32% think that they always find what they are looking for,
  • 25% think that the range is ok and that there are products in all price ranges,
  • still 23% find the product range could be better and
  • a minority says there is not enough choice (12%) and the prices are too high (5).

Control of alcohol consumption

  • 4% consume less alcohol because they buy less often,
  • 43% think the system is effective because it helps to reduce consumption among young people,
  • 22% say it makes a difference, but it could be improved, but
  • almost 34% think it does not make any difference at all and
  • 2% think they consume even more because they buy in larger quantities to avoid being without wine and spirits.

You can find more details on this reader survey HERE

More freedom or a tightening of the law? 

The judgement may have a big impact for other alcohol retailers from EU countries, for whom an interesting new market could open up. Whether this will happen is, however, far from certain. Social Affairs Minister Jakob Forssmed has already announced that the government will examine whether the law needs to be changed.

In a letter to the Swedish newspaper friKöpenskap he wrote: "The retail monopoly is an important part of Swedish alcohol policy, which must be protected. We will analyse the current ruling, the consequences it may have and the measures it may entail.“

Here, he is in line with Systembolaget: "The retail monopoly constitutes a tool for eliminating the incentive to increase sales while at the same time controlling the number of outlets, opening hours, forms of sale, age verification and marketing more effectively," says Sara Norell, and thus "it reduces alcohol-related medical and social problems."

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Reading time: 5m 30s

 

 

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