Wine in cans in 2020

At this time of the year, web sites are prone to either review the departing year, or prophecy the incoming one. So, let’s try some of that here; although we will first have to go back in time.

Way back in 1965, winemaker Tom Angove was running an industrial-scale wine operation in Renmark, South Australia. This meant that he had to sell more cheap wine than people were buying in bottles at the time, at least in Australia. He knew of a product used, since 1955, to transport and dispense battery acid in the USA — a flexible plastic bag inside a box. After some trial and error, he developed a version for wine, which became known as “cask wine” in Australia and “bag-in-box wine” everywhere else (Cask wine turns 50 and it’s time to pay it some respect). By 1970, the Wynns wine company had modified it into the form that we know today, with a tap not a clothes peg (1970 Wynns perfect the wine cask). This packaging gradually replaced the venerable glass flagon as the preferred way to retail cheap wine, worldwide.

Well, that was 50 years ago, and it has been suggested that it is time to move on. Plastic is no longer a recommended way to package anything, let alone wine, because the oceans are now full of plastic debris, resulting from single-use packaging. This is called pollution, which results from a failure of human recycling processes — plastic is rarely re-used, but it can be recycled, although it often isn’t.

Glass can also be recycled, but at much greater expense. Sand has to be heated to a horrendous temperature in order to turn it into glass bottles; and that glass has to be heated to not much less, in order to recycle it into new bottles. These procedures burn huge amounts of fuel of one sort or another, which then contributes to global climate change, via the so-called carbon footprint. We could, of course, re-use the glass bottles that we have, rather than recycling them. In the past, this has been done for soft drinks, but not often for wine (see A 5-cent deposit on wine bottles in New York? Maybe).* Glass is also very heavy as far as packaging goes, much worse than plastic. This also contributes to global climate change, by increasing transportation-related burning of fuels.

On the other hand, aluminum cans are easier to recycle and cheaper to freight than are bottles. So, it seems inevitable that the suggestion for wine-in-a-can will be made. It is used for beer, so why not wine? This is easily argued on the grounds of being more in-tune with the modern world (see Making smarter sustainable choices at the bottle shop) — we should care about the sustainability ethics of producers, and make retailing choices that minimize our own environmental impact (buy local products, reduce unnecessary packaging, etc).

There are a number of options for drinks producers, given that consumer awareness is at an all-time high, and the ongoing creation of laws restricting single-use plastics (eg. Thailand has a total ban on plastic bags from 2021). For instance, there are now flattish (recyclable) PET containers that are said to be 40% more spatially efficient than round bottles, and are 87% lighter than glass bottles (Eco-packaging trends across spirits, wine and beer). There also exist bottles made of much lighter glass than is the current standard, which cuts transportation impacts.

So, it seems obvious that, among these options, wine cans are going to become prevalent. The wine industry is simply going to have to accept it, just the way it did for plastic bladders in cardboard boxes. Given this prognosis, the industry needs to embrace the idea, and to make the most of it that they can (pun intended). There is no point in leading the horse to water — the horse needs to be proactive, and lead itself.

Cans are not yet the Next Big Thing, of course. It seems that bottles currently command $US15 billion in sales, bag-in-box $1.4 billion, and cans only $90 million (A skeptic’s guide to wine in cans), so the can manufacturers are not yet rubbing their hands with glee. Still, we need to think about the future, because it has been suggested that Wine in cans will represent 10% of the market in 2025.

The basic question, then, is how to retain as much as possible of wine’s special ethos, while sticking it in something that looks like a beer can, at best, and a cola can, at worst. You don’t go to a debutante dance dressed like a house cleaner — even Cinderella knew better than that. You might, however, go to a sports game or a picnic or to the beach carrying a 6-pack of wine, snuggled next to the beers and coolers.

Part of the issue, then, is about what sort of wine should be in these cans. The best stuff comes in bottles, we all know that. You don’t lay down a cellar full of “Chateau Cardboard” (as we called it in Australia); and, so, the bag-in-box packaging has not been used for the best-quality wines. Presumably the same will be true for cans — cellaring “a 12-pack of wine” will not be the same as laying down “a case of wine”.

This will not stop the advertisers, of course. Back in the 1970s, the most successful Australian brand of bladder wines, Orlando Coolabah (launched in 1973), had a series of television ads based on the slogan: “Where do you hide your Coolabah?” (see Australia Remember When). It showed examples such as hiding your wine cask behind a large pot plant, so that the other party-goers could not get their hands on the good stuff.

Sadly, current examples indicate that canned wine will be cheap, fizzy, and best drunk cold, no matter what the advertisers tell us. Not unexpectedly, this matches the current expectations for beer and soft drinks, although these may not be the best role models to choose. Aluminum cans are currently not seen as part of the alleged trend towards premiumisation of the wine industry (see Has there really been recent premiumization in the wine industry?). Discussions of canned wine “quality” refer to the shelf-life not the enjoyability — retail examples indicate that we will be lucky to get a use-by date, let alone a vintage date. Surely the wine industry can do better than this?

Apart from these cultural expectations, the sensory experience may also leave something to be desired, of course, as noted by Lettie Teague (A skeptic’s guide to wine in cans):

Consuming straight from the can thwarts one of the great pleasures of wine: its aroma. Unlike the wide mouth of a wine glass, a can’s small opening isn’t made for sniffing; any scent of flowers, fruits or forest floor will be trapped in the can ... I tasted every wine both straight from the can and from a glass, and while some held up better from the can than others, all were better from a glass. Drinking straight from the can not only meant forsaking aromas but also savoring a first taste of can, not wine. When the wine was lousy the can only amplified its worst attributes in the manner of a tinny loudspeaker.

There are all sorts of technical issues. as well (see The recent Bulk Wine Conference addressed what can ruin wine in cans). These include the special lining used in food-grade aluminum cans, which needs to be tested separately for each wine. There is also the matter of dents and other damages that easily occur to cans, which has retail consequences. Consumers seem to treat dented cans as unacceptable, at best, and at worst they are seen as a sign of health problems with the contents (as noted to me by Bob Henry). In neither case is the retailer likely to make a successful sale.

There are also social issues, such as the fact that most wines have 2–3 times the alcohol content of beer, and therefore need to be consumed differently. The idea that soft drinks, beer, wine, and coolers may all come in the same packaging may require some sort of regulation regarding clear warning labels.

There are major advantages to cans, of course. Notable among them, you will be able to use your shower beer holder to drink wine while getting clean under a stream of water. Try doing that with your wine glass!

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* In southern Europe, and among migrants from there to the New World lands, wine flagons have often been re-used. The customer brings the empty flagon to their local winery, and exchanges it for a full one (and pays for the contents). The used flagon is cleaned by the winery, and re-filled. This procedure does not fill the oceans with plastic, nor does it engender much in the way of transportation costs.

Christmas traditions

At this time last year, I presented The first wine-themed Christmas card, which was from 1843.

If you are interested in knowing more about Christmas cards, then the Moo card site once produced an infographic compiling some of the more interesting bits of information. I have included it here because it is no longer available on the original web site. Click on it to see the infographic at full size.

An amazing amount of other information about Christmas Traditions & Customs around the world can also be found at the Why Christmas web site.

God jul och gott nytt år!

Will the slowdown in the Chinese wine market catch up with Australia and Chile?

World imports and exports have recently been in the news, not least because the world’s largest wine-producing region (Europe), the world’s largest wine-consuming region (the USA), and the aspirant to both crowns (China) have been doing political battle with each other, based, I think, on one of the early scripts for Game of Thrones. The tariff machinations are certainly just as convoluted and devious, and the future outcome just as uncertain — the Scandinavian word saga was invented for just this sort of situation.

This is, of course, having a seriously negative effect on wine producers, sellers and drinkers (Who suffers from tariffs on wine?). Exacerbating this situation, recent data show a slow-down in the rapid rise of China as a wine-consuming nation. Having recently been the world’s fastest-growing wine market, it is currently ranked as the number 2 still-wine consumer by value and number 5 by volume (IWSR predicts declining volumes but increasing value in the global wine market). Given the small size of current Chinese wine production, this makes China a significant import market, worldwide.

It is thus worthwhile to look at the current situation for the major countries exporting wine to China.

The data shown in the graphs below were released by the country’s official trade organization, the China Association for Imports and Exports of Wine & Spirits (CAWS) (taken from China’s top 10 wine importing countries in H1 2019).

The first graph shows the estimated bottled-wine imports for the first half of 2019, as both volume (millions of liters) and value (millions of US dollars), for the top 10 supply countries. Bottled wine accounts for 90% of the import value; and the listed countries account for c. 97% of those imports, with 63% for the first two countries alone.

As you can see, volume and value do not rank the countries in the same order. Chile has moved to the front of the pack in terms of volume, while Australia has moved to the front in terms of value. France, the long-term leader of bottled-wine imports, has dropped to third and second, respectively. *

This movement means that the average wine-price per liter (in US$) has also changed:

Australia Germany France United States Argentina Italy South Africa Portugal Spain Chile

$5.60 $5.29 $5.03 $4.94 $4.80 $4.17 $3.44 $3.19 $2.29 $2.09

So, Australia sells its wine at an average of 2.7 times the price of the Chilean imported wine. Clearly, the Australians must think that they are on to a good thing. Indeed, the increasing price per liter for Australian wine is a global trend (How Australian winemakers are distancing themselves from the country’s reputation for cheap bottles).

We can now proceed to compare the 2019 data with those from 2018. Overall, imports experienced substantial drops in both volume and value this year: 14.1% for volume and 19.5% for value. These are substantial numbers, and must affect the producing countries significantly. The percentage changes for the main 10 countries are shown in the next graph.

As you can see, all of the countries experienced drops in volume, except Chile, which showed continued growth of its bulk wine exports. All of the countries showed corresponding changes in value, except Australia, which maintained its ground in spite of a drop in volume — indeed, China now represents c. 35% of the value of Australian wine exports (see AAWE).

These drops have been attributed to China's slowing economy, the depreciation of the renminbi (RMB), and the uncertainties associated with the protracted US-China trade war. The latter point is particularly important, given the free trade agreement between Australia and China that came into effect this year. [The current US president has pretty much withdrawn from all of the free-trade negotiations that were ongoing at the start of his term of office, except the USMCA, and replaced them with a series of reciprocal tariffs, instead.]

Australian success

The results for Australia suggest that the Australians have a different strategy to everyone else. This is so because Australia has a fairly small population, by world standards, and the people can easily act together, as a single marketing group.

For example, the Australian federal government is currently implementing a A$50 million Export and Regional Wine Support Package (ends June 2020), which “has enabled the Australian wine sector to compete on the world stage like never before, delivering bold, eye-catching marketing campaigns on an unprecedented scale” (Wine brands encouraged to tap into export growth opportunities). The money has been used to participate in a major way in events like the China International Import Expo, the Wine Australia China Awards, ProWine China, and the Decanter Shanghai Fine Wine Encounter (Australian wineries Shanghai-bound as exports continue to grow in value). This is a long way from a trade war! There is even an annual China-Australia Wine Marketing Summit.

Also claiming active involvement has been the Australian Wine Research Institute. In recent years: “We placed our focus on value growth, rather than volume, and really getting to understand the consumers in emerging markets like China ... Our job was to go into China and look at consumer preferences while working with Australian producers to manufacture products that suited that market” (How Aussie wine has thrived over a decade of change).

It is also worth noting that wine is not the only large export to China — China represents approximately 20% of all Australian exports (Australian brands shine at second China International Import Expo).

As a counter-point to the single-country image, however, I should also point out that Australia is a continent, and therefore its wine regions are as different from each other as are any other continent’s. The fact that the only Australian wine you know of is Shiraz from the Barossa Valley reflects the fact that this wine is distinctive, not the lack of any other, very different wine styles.

This is relevant here, because the main wines being marketed in China come either from the Barossa or from Mclaren Vale, which is a short distance further south. These are the prime sources of the “soft fruity wines from well-known varieties that newcomers tend to enjoy, but also more refined styles that appeal to aficionados” (Why Australian wine is so successful in China). These are the wine styles referred to above.

In this regard, we should not overlook the role of the Penfolds wine brand (owned by Treasury Wine Estates, TWE), which is apparently responsible for two-thirds of the Chinese imports from Australia. Indeed, in recent years Penfolds has specifically targeted the Asian market as a whole (How Penfolds, a 175-year-old wine brand, is staying relevant and appealing to the Asian wine):

There are significant economic and demographic differences within Asia, which implies differences in demand and consumer behaviours. There are some trends that we observe in consumer behaviour in Asia. Firstly, the importance of millennials which form a significant part of the population — they are more social, more involved and tend to spend more than the Gen X.

There is also diversification of channels from supermarkets to online and specialty wine stores. Finally, luxury alcoholic beverages keep growing in the region, which shows a significant increase in affluent and middle-class consumers in Asia. This implies that brands need to continuously build their credentials and luxury appeal, to keep growing with that segment. as consumers will keep trading up as income increases.

The importance of the diverse retail channels, has been stressed elsewhere (Cracking China: what’s the best route to market for imported wine?):

Local analysts and trade consultants say the decision by Treasury in 2015 to switch from what had been an exclusive distribution deal for Penfolds with one importer, to go to a multi importer model, has been responsible for transforming not only the brand’s fortunes in China but the importer model for the whole country. Almost overnight it opened the market and different channels for multiple players to be working with effectively the same brands, helping take those wines to China’s mass market.

Perhaps we should also not overlook the importance of Western wine labels when presented to consumers who do not even use a Western alphabet, let alone speak one of the languages (Hong Kong in turmoil):

TWE struck it lucky because its Penfolds range is distinguished by bin numbers rather than words (Bin 389, Bin 407, Bin 707 and so on), making it easy for consumers to recognise the different labels. Better yet, the Wolf Blass range is characterised by colour coding, from the Yellow Label entry level range through to the ultra-premium Platinum range. This helped the company get traction with Chinese consumers early on.

Penfolds is not, however, the only large wine-producing group in Australia to specifically target the Chinese market. The Randall Wine Group, run by Warren Randall, the so-called King of Australian Wine, has been busy for the past couple of years buying up vineyards in the Barossa Valley and Mclaren Vale (Randall snaps up more vineyards to quench China’s demand for Aussie wine), with the stated intention of supplying the Chinese middle-class consumer. The group now has c. 3,500 hectares of premium red-wine vineyards in South Australia, and it is now the biggest vineyard owner in both the Barossa (1,600 ha, c. 20% of the area) and Mclaren Vale (750 ha). This will allow it “to consistently supply in excess of 12 m bottles of Barossa luxury red wine‚ a favourite among the booming Chinese market” — this is more than double what the entire USA currently supplies to China. It seems rather like: Putting all of your eggs in one basket.

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* It is worth noting the comment that: “China wine import stats in any given year must be taken with a huge pinch of salt, bearing in mind the fragmentation of brands and importers, and the frequent habit of trade loading and dumping that is so common in the region” (Nimbility Asia report). For example, the data from Nimbility Asia differ somewhat from that given above (Bottled wine imports to China declined sharply in H1, and market headwinds remain strong), although the patterns are roughly the same. However, for their volume data Georgia and Moldova replace Argentina and Germany, respectively, and for their value data New Zealand replaces Germany.

When will world wine consumption finally catch up with production?

There has been much recent talk about world wine production, not least in relation to global climate change. Among all of this, we have been told, by the International Organisation of Vine and Wine (OIV), who collate worldwide records, that the 2019 production level has returned to near “normal”, after a small grape crop in 2017 was followed by a bumper crop in 2018.

Furthermore, concern has been expressed that the 2018 wine production, much of which is now being released to the consumers, has produced a market glut. This is obviously not good for the long-term viability of wine producers, so it is worthwhile for us to look at current trends in both the worldwide production and consumption of wine.

Production

The data graphed below come from the OIV database, which has collected worldwide data since 1995 (ie. the past 25 years). The first graph shows the total level of wine production from those countries with commercial production that exceeds a specified minimum. The data for 2018 is still provisional, since not all producers have yet been reported their final numbers; and the 2019 data are preliminary, as wine production is still ongoing.

As you can see, wine production varies considerably from year to year, but there is no consistent trend upwards or downwards, nor are there any repeated cycles. So, we may conclude that current wine production is simply varying stochastically around a particular “average” level (currently c. 270 million hectoliters annually) — this is indicated by the dashed line on the graph.

The 2017 production was the smallest since the beginning of the 1960s, while the 2018 production was exceeded only by that of 2004 (for the longer-term trends, see my post The smallest global wine production for 55 years). The estimated 2019 production level, on the other hand, is only c. 3% less than the 25-year average. We therefore cannot claim that this year is in any way unusual, in terms of production — it was the previous two years that were unusual. Note that world production is dominated by European producers, who contribute about two-thirds of the wine (62-69% annually during the current century).

The consequences

The importance of the return to normality in 2019 results from the obvious over-production of wine from the 2018 grape harvest: “with demand continuing to soften in volume terms, this reduction in supply comes as welcome news for wine producers” (Global wine supply moves closer to demand in 2019). In Europe, for example, there are reports of “a fairly well-inventoried bulk wine market in Italy for Prosecco, Pinot Grigio and Primitivo, as well as built up inventories of France’s Languedoc reds” (The ups and downs of the 2019 global bulk wine market).

In the USA, Napa grape prices for 2019 are well down, making it “a year where it’s tough to sell grapes and bulk wine, because most of the buyers already have sizable inventories because of 2018” (A historic harvest and a changing market: Napa's growers navigate grape glut). Furthermore, “the slackened thirst for purchases of excess North Coast grapes and wine is expected to extend into 2020, as vintners move the bounty of the 2018 harvest through sales channels that aren’t growing as fast as the influx” (As North Coast vintners move through ample wine supply, Napa County adjusts rules for small vintners).

One suggested response to this situation in Napa is for “vineyard owners strategically replanting some acreage this year, [thus] delaying future fruit production to correspond with market rebound” (Napa's growers navigate grape glut). This option has also been suggested in Italy (Barolo consorzio bans new plantings for three years to avoid wine glut).

Consumption

These are pretty serious suggestions, which obviously leads us on to a comparison of production with global wine consumption. The OIV data are shown in the next graph, with the consumption shown in pink.

Clearly, there have been long-term trends in the consumption data — there was an increase in consumption until 2005, followed by a dramatic drop, returning to the 1996 level. The drop was then reversed, with the previous (2005) consumption level recovering by 2014 (9 years later). Wine consumption has shown a roughly linear increase since 2007.

Thus, we may conclude that production has remained static while consumption has very recently been increasing. We may then ask the obvious question: when will the level of consumption catch the level of production?

We can answer this question using a very simple linear forecast, as shown by the two dashed lines on the above graph. It is important to note that forecasts, by definition, assume that the current trends will continue unabated into the future, which may be rather naïve. Indeed, there have been media predictions that future wine consumption will actually plateau, or even decrease (eg. Worldwide alcohol consumption declines 1.6%).

Anyway, the forecasting lines for production and consumption intersect in the year 2034, which is 15 years away. Until then, production will continue to exceed consumption, and the risk of a wine glut will remain real.

As an aside, if we produce the same type of forecast based solely on the consumption data from 1995 to 2005 (when there was a also a linear increase), the forecast year of equality between consumption and production is 2029. Thus, the dip in consumption from 2005-2014 had the effect of delaying the forecast by 5 years.

An alternative forecast for future consumption is shown in the final graph, where consumption is treated as actually having already reached a plateau (at an average of c. 238 million hectoliters annually), with a dip in consumption during 2005-2014.

For this forecast, both wine consumption and production increase only very slowly. In this scenario, consumption stays at <90% of production for the foreseeable future (the two lines slowly reach equality in the year 3555!).

Obviously, some of the pundits are concerned that this second forecast is more likely than the first one.

Why are there wine monopolies in Scandinavia?

Few people mention the “Railway Monopoly” or the “Road Monopoly” when referring to government-owned (and funded) railways and roads, but if the government owns alcohol distribution then they always mention a “Wine Monopoly“. There seems to be an unclear distinction here.

If a government takes control of any of these things, there is always the same intended good reason for it. They are providing a service in an industry where cutting corners, with the incentive of increasing profit, may not be a good idea.

For example, the railways of the USA cannot support modern high-speed trains because the initial lines were built “on the cheap“ by industry, whose motive was to make money, not provide transportation. On the other hand, in Europe and elsewhere the lines were often built with government funds, and those governments have continued to maintain the networks. (See: The rest of the industrialized world has high-speed rail, why can’t the U.S.?) The USA has moved almost entirely to road (and air) transport, with a lot of lobbying from the road-based interests, and rail has been sadly neglected. Times may change — after all, China laid down the world’s largest high-speed rail network in just two decades (to replace its high-polluting domestic air business).

Alcohol

For alcohol, on the other hand, government control usually has to do with health. Indeed, current consumer surveys continue to list health as the main reason for voluntarily abstaining from alcohol intake, especially amongst Millenials. However, government edicts are hardly voluntary, at least compared to government support for the current Dry January campaigns.

The temperance movements have long presented both health and moral arguments against alcohol. Most of my readers will be familiar with the anti-alcohol movements in English-speaking countries. As recently noted by Paul Nugent: “The temperance movements ... were well-organized, globally-connected, typically led by Protestant evangelicals and very largely driven by ordinary women.”

Similar temperance pressure has also existed elsewhere, often with very different effects from the alcohol bans that you are familiar with. For example, Joseph Bohling explains (2018. The Sober Revolution: Appellation Wine and the Transformation of France) that the effect in France was to create the modern system of clearly demarcated high-quality wine-making regions, in order to encourage people away from drinking large amounts of cheap wine. In the second half of the 1900s, wine consumption per capita halved, while appellation wines rose to >50% of the volume consumed.

Alcohol problems occur notably in societies where binge drinking of spirits has long been accepted cultural behavior. You can see the current list of countries with problems in the following map, where an increasing amount of blue indicates increasing prevalence of alcohol-use health problems (Alcohol Use Disorders DALYs, Age-Standardized Rate, 2017).

Note that these problem countries tend to be in the colder northern regions — spirits can keep you warm during the long dark winters. However, some of the tropical countries are not excluded, for entirely different reasons.

In the (Protestant) Nordic countries (Finland plus the Scandinavian countries; Scandinavia = Denmark, Iceland, Norway, Sweden) binge drinking used to be part of the culture. Traditionally, fruit (ie. non-grape) wines and beer might be consumed with food, or might not. However, the drinking of spirits was part of a completely separate set of activities. The basic idea was to keep drinking until you literally couldn’t continue — it was more like a sports challenge than anything else, with the participants mostly being male.

So, the idea that the governments might try to take control of this situation should not come as a surprise — “Sell ​​alcohol without any profit, and then we can limit the negative effects of alcohol on society” was the motto. The argument was that if the governments got control of the supply, then two things could happen: (i) individuals acquiring unreasonable amounts of alcohol would be made very difficult, especially for drunk persons; and (ii) the populace could be educated to consume alcohol in the manner of southern Europe — that is, in moderation, with meals.

The alternative approach to control has always been high taxes, of course. At various times, all of the Nordic countries have been world-renowned for their alcohol taxes, although currently none of them are particularly onerous. The idea of introducing Prohibition was not really an option, given the failure of that approach in the USA. Sweden actually rejected it in a 1922 referendum, while Norway briefly tried it on spirits (from 1921-1926) and fortified wine (1921-1923). However, Iceland did have Prohibition of one sort or another from 1915 onwards, but dropped the ban on wine in 1922, spirits and low-alcohol beer in 1935, and strong beer in 1989 (!).

The current situation

Denmark, unlike the other countries, never has had government control of alcohol, except in the semi-independent Faroe Islands, which has had an alcohol monopoly since 1992 (through the Rúsdrekkasøla Landsites stores). It may not be insignificant that Denmark’s colour in the above map is quite dark, compared to the other Nordic countries.

Norway is not a member of the European Union (EU), but it is a part of the European Free Trade Association, and therefore abides by many EU requirements. Its government has had complete control over alcohol sales since 1922 (through Vinmonopolet = The Wine Monopoly), currently including spirits, wine and non-low-alcohol beer. Note that, in the above map, Norway is light blue, which paler colour is probably not accidental. The government previously also held monopolies over alcohol importation and wholesaling, but these were dropped in 1996, as part of the European Free Trade agreement.

Iceland is also a member of the European Free Trade Association, rather than the EU. Its government has had complete control over alcohol sales since 1961 (through Vínbúðin = The Wine Shop). It is worth noting that for both Iceland and Norway, the problematic aspect of their flirtation with Prohibition was wine sales, because banning wine meant that the European countries with which they traded fish (especially France and Spain) refused to take any seafood unless they could send wine in return. The governments therefore needed to take control of wine sales, rather than trying to prevent them.

Finland still has government control of alcohol sales (through Alko Oy), although when it joined the EU in 1995 its concomitant monopolies over alcohol production and bulk importation had to be dropped. Sadly, total consumption of alcohol in Finland increased up until to 2007, and alcohol-related problems were also recorded to increase (see Upward trends in alcohol consumption and related harm in Finland). More than a decade ago, I was in Helsinki just before morning peak-hour, and the park outside my hotel was well-populated by people who were “under the weather” (all male) — they were literally cleared away by the police just before the morning commuters arrived.

Things have apparently improved greatly since then (see Alcohol consumption in Finland has decreased, but over half a million are still at risk from excessive drinking), although the color of Finland in the map above is still rather bluish. Moreover, Finland recently introduced a new alcohol act of parliament, allowing, for example, stronger beverages to now be sold in grocery stores — the results are being monitored, of course (Finland has avoided dreaded effects of new alcohol act, so far).

Sweden has the biggest population of the Nordic countries, and also produces the biggest alcohol-consumption revenue, being 21st worldwide (Finland =29, Norway = 30, Denmark = 32).

The Swedish government did not have alcohol production or importation monopolies when it joined the EU (unlike Finland and Norway), but it did retain a monopoly over sales. However, a few years ago Sweden dropped control of trade sales (restaurants, bars, caterers, etc), while still retaining control of retail sales (through Systembolaget = The System Company). In the above map, Sweden is yellowish, the best of all the Nordic countries.

Sweden’s Systembolaget was founded in 1955, when a large number of regional sales outlets, based on a strict rationing system that had been in place since World War I, were merged into a single national company (originally called Systemet = The System). As the company itself puts it: “The old System stores were largely located on hidden back streets. The signs were unobtrusive, and the windows advertised completely different goods, such as clothes and shoes. But when the new Systembolaget was founded in 1955, the management decided to bring the stores into the city centre.”

I first encountered Systembolaget in 1998; and it was as primitive as you are all expecting a monopoly to be, in terms of service. You had to ask for your bottles across a counter, having waited patiently in a ticketed queue; the weekday opening hours were rather short (10 am to 3 pm); and the queues on Friday afternoon (open until 5 pm) were extensive, because the shops were not open on weekends.

Actually, the shops apparently originally were open on Saturdays, because it was a workday (and a school day!). So, it was 1982 when Saturday closing was introduced; and this remained in force until 2001 (although even now the stores still close at 3 pm on Saturday). A few partial self-service stores started to appear from 1984, with the first fully self-service store opening in 1991. However, it was not until 2013 that all of the stores had adopted this format. Limited online-ordering was instituted in 2001, culminating in full home delivery in 2012, which became nationwide in 2019. There are also numerous agents that will receive ordered alcohol, and keep it until you can collect it.

So, my previous blog posts about Systembolaget (click the keyword search in the column to the right) describe the current situation, not the past. Today, it really does behave like a liquor chain of international standing (with 3,500 employees), in spite of my pet peeves. The fact that it is government-owned is not, in practice, relevant, other than the positive effect of the increased purchasing power that can be achieved by a truly national chain.

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Footnote on the downside of large monopolies:

Back in 2005-2008 there was a large corruption court case in Sweden, in which 92 people were indicted for receiving or giving bribes. Of these, 77 of them were Systembolaget employees, accused of receiving money, travel and other gifts from suppliers in exchange for promoting their goods. At least 65 people were found guilty.