jamie goode's wine blog: Systembolaget: Sweden's alcohol monopoly

Friday, February 06, 2009

Systembolaget: Sweden's alcohol monopoly

This morning I made a presentation to the Systembolaget buying team on PET packaging for wine. Then Johan Bostrom, MD of Wine World, who is hosting me here took me to see a Systembolaget store.

Systembolaget is the Swedish alcohol monopoly - they sell all the wine sold in Sweden. You can read about them on their website, which has an English section: http://www.systembolaget.se/Applikationer/Knappar/InEnglish/

The store I visited here in Stockholm is one of their flagship outlets, and the range of wines on sold was impressive. Yes, there's a huge section devoted to bag-in-box, which accounts for 50-60% of all sales (the exact figure is quite seasonal; Tetrapak is another 8%). But there's also a fine wine section that would match the selection of any independent wine merchant in London. For example, the Portuguese selection included Poeira, Pintas, Crasto TN and Maria Therese, Vallado Touriga Nacional, Dona Maria Reserva and Vale Dona Maria CV - all on the shelf at prices similar to those in London.

Apparently, when rare wines come in there are queues outside the door. When DRC is released, people queue for two days, hiring students to line up in their place and such like.

One of the attractive features of the monopoly is that there is no price promotion.

As well as buying from the monopoly's own selection, consumers can also buy from a special list - there's a delay of about a week until the wines come in, and you have to go to the stores to pick the wine up physically: there are no internet or mail order sales here.

There are just shy of 70 accredited wine journalists here, and plenty of tastings are organized by the 400 different importers. The monopoly runs press tastings when they offer new releases. Journalists are important here in helping promote wine sales because of the lack of price promotion and strict rules about advertising. Even in specialist wine magazines, one-fifth of the space of alcohol adverts has to consist of a health warning, and you aren't allowed to associate your product with situations, such as outdoor living or dining with friends.

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At 1:42 PM, Blogger Glenn said...

This honestly doesn't sound like a terrible monopoly, at least compared with the current draconian Pennsylvania system.

At 11:21 PM, Blogger Mats L said...


As a native Swede in Stockholm, I frequently buy at the Systembolaget store that you visited in central Stockholm. The staff are knowledgeable and the prices on wines at 15 Euros an up are similar or better than the prices in other European countries, with the exception of mature Bordeaux that is ludicrously expensive. This fair price on premium wine is because taxes are high, but applied largely on alcohol content and not price. Also it's because the monopoly is a large volume, zero-profit state-owned retail channel. It works relatively well, but it is frustrating that often a particularly good wine is bought in small volumes and then stocks are not replenished once the 400 or so bottles available nationally are sold. As you said, the queues at the release of those bottles remind me of queues in Leningrad at a visit in 1986.

There has been a lot of debate about tax levels and whether to break the monopoly, but at the moment it looks like it will remain status quo. The Internet sales are allowed from vendors in other EU countries, but Swedish tax should in theory be applied on top of the order by the receiver once delivered. In practise few people do that.

At 9:14 PM, Blogger Peter May - The Pinotage Club said...

The Systembolaget - in Jamie's vocabulary - sucks big time!

Yes, they have been forced by EU membership to make their stores like shops. Yes you can now handle the wines and take them to a checkout like in a supermarket. Yes they now don't bulk ship and bottle all the lower priced wines under invented names.

Yes, the stores have a wide range of wines. But you not only went to one store -- you actually went to every bloody single one of them! What you saw was the entire choice the poor Swedish wine lover has. No point in going down the street to the next store. No point looking on the web. No point in using wine-searcher.com. What you saw was all there is.

So, Jamie, drop the scales from your eyes ask yourself why Swedes have to buy their alcohol from the Govt?

At 10:34 PM, Blogger Jamie said...

Glenn, I'd have been happy shopping for wine here.

Mats, appreciate the perspective

Peter, thanks for your perspective, too.

At 4:28 PM, Anonymous Jay said...

I lived in Stockholm for over five years and have lots of friends there. I'd say most Swedes are satisfied with Systembolaget. The range is actually very good (especially Spanish as I remember) ... for about 6 months until you have tried most of them.

If you are a true wine lover, it's like living inside a bedsit instead of a mansion. Sometimes the prices are very good though.

At 5:33 AM, Blogger ANDY CHEESE said...

I have lived in Stockholm for 8 years now and buy most of my wine at the shop in Regeringsgatan that you feature. The shop that you were shown is the shop with the best selection in the whole of Sweden. The rest are pretty dismal. If you find somethign good then the price is usually good. The problem is that there isn't that much worth buying; choice is very restricted. It is a shame that the Swedes don't study Denmark which has a freer wine market and is in Scandanavia. The ordering assortment that you mention is a bit better but is also quite poor.


At 10:58 AM, Blogger bkwine said...

"there's also a fine wine section that would match the selection of any independent wine merchant in London"

That may be almost true. On the other hand, if you're in London and don't find what you want, you go around the corner and find just as great a selection, but different.

In Sweden, you may go around the corner, and you'll find nothing. Because the shop you visited is virtually the only one in Sweden with that range of wines. (Sometimes, not always, you can indeed request them to be delivered to other shops but it's still the same selection.)

Oddly, many Swedes believe there is a great and wide selection of wines in Sweden. It's a delusion that must be based on never looking elsewhere (e.g. Denmark, or the UK for that matter). And on the fact that Systembolaget spends millions and millions on propaganda (publicity and advertising it's called, I believe) telling the nation how fortunate they are having Systembolaget and how great a selection they have compared to any other country.

What's even odder is that the 70 or so wine journalists that you mention almost never stand up and say "we would have more and better wines without the monopoly". (Michel Jamais is one of the few.) That's probably a facet of the cozy relationship between Systembolaget and the journalist cadre - typical of Sweden.

So monopoly has it advantages (e.g. you don't need to use your brain and shopping skills). But it lacks in e.g. variety and customer service. (Not to mention freedom.)

How many self respecting wine retailers of that size, in any other country, would not have any internet shopping facility by now? Systembolaget is thinking of letting people shop online... And has been thinking for many years. Wonderful customer service, isn't it?


At 10:10 AM, Anonymous Tim Crane said...

I've been visiting Sweden quite a bit in the last year, and I have to agree with Jay, Andy and Per. Before coming here, I thought the problem in Sweden would be the pricing, but the systembolaget is not expensive (by UK standards e.g.). The problem is the range.

Many of my Swedish friends seem to have been persuaded by the publicity Per talks about and insist that the range is great.


At 9:36 PM, Blogger Per and Britt said...

There's an interesting thing with the pricing too. Swedes like to think that prices are very good. Sometimes they are but most of the time not. But "the low prices" get publicity since some of the very rare wines are not so expensive. For example, you can perhaps find a DRC Romanee Conti that is 20% or 30% international market prices. However (1) virtually no one buys those wines, (2) there are maybe 24 bottle for the whole country, (3) some clever people buy them and export them anyway... So they're gone before you even get to the door of the shop. And there's no alternative shop that you can go to and buy. (BTW, if you look at the list they have some 5000 references in total, which is less than you have at the single Lavinia shop in Paris. And at the Systembolaget something like 30% of what is on the list is not available anyway since it's sold out.)

But for the wines in normal, affordable price ranges it is the opposite. It's not cheap.

And another aggravating factor: since the monopoly needs large quantities, most of the suppliers are the big producers. and they don't always make the most interesting wines...

Imagine someone like Pierre Frick in Alsace who makes 20 or 30 different wines from his 19 hectares. How will he be able to sell to Sweden where they want 20,000 or 30,000 bottle of a wine?

Poor Swedes.

Ignorance is bliss. Isn't that what you say?


At 8:22 AM, Blogger Tim said...

That's a good point about the quantities too. Having to buy in such huge quantities makes it unreasonable for them to take risks.

As Adam Smith pointed out all those years ago, monopolies are bad for the consumer.

At 1:54 PM, Blogger jonsma said...

Systembolaget is an environmental hazard.

As beer wine and spirits cannot be bought anywhere other than systembolaget in Sweden, people make two trips in their exhaust spewing vehicles, one to the supermarket and one to the systemo.
At closing time weekends cars swarm around most liquor stores in Sweden to get parked allowing their owners to buy booze before closing. Inside the shop there is absolut vodka, sorry I mean absolute chaos, stressed people pushing and shoving to get to the queue. To an outsider, this all seems a bit perverted but an indoctrinated Swede doesn´t blink an eyelid. In a nearby park or green the local alki´s have congregated to get completly sloshed, you can find them close to every systembolag in the country, they´re disgusting.
I have bought a double portion of booze in fear that unexpected guests will arrive on Sunday.
The systemo also cheats on the international market by creating unfair competition, as we know monopolies are banned in Europe, in Italy they are called Maffia´s
No, really the systembolaget is Ok if they would just allow other shops to sell at normal shopping times, so we can all relax and do our shopping when we want to.


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