Systembolaget

Systembolaget (Swedish: [sʏˈstêːmbʊˌlɑːɡɛt] (listen), "the System Company"), colloquially known as systemet ("the system") or bolaget ("the company"), is a government-owned chain of liquor stores in Sweden. It is the only retail store allowed to sell alcoholic beverages that contain more than 3.5% alcohol by volume. Systembolaget also sells non-alcoholic beverages, although this product segment represents less than half a percent of the company's total sales of beverages.[2] The minimum age to buy alcohol at Systembolaget is 20 years.[3] At Swedish restaurants and bars the legal age to buy alcoholic beverages is 18 years, though bars and clubs may voluntarily set an age limit higher than 18 if they prefer.

Systembolaget
Government enterprise
IndustryFood and drink
Founded1955
HeadquartersStockholm, Sweden
Number of locations
441 (2017)
Key people
Kenneth Bengtsson, Board chairman
Magdalena Gerger, CEO
ProductsAlcoholic beverages
Revenue 29.4 billion SEK (2017)
282 million SEK (2017)[1]
Number of employees
5,700 (2017)
ParentSwedish Government Offices 
Websitewww.systembolaget.se

Governing laws
Interior of the cashering area of a Systembolaget store with counter service in Växjö, c. 1916.
The traditional layout of a Systembolaget store, with counters where customers place their orders (June 2006). Today all stores use supermarket-style self-service.
Self-service Systembolaget in Södertälje, Sweden. This is the normal layout of the Systembolaget stores since the 1990s.

There are several laws and rules governing how Systembolaget stores operate, such as:

  • All products, including beer cans and bottles (except products that aren't kept in stock and have to be pre-ordered), are sold individually. Pre-ordered products may sometimes only be sold in quantities corresponding with the minimum order accepted by the manufacturer. Some traditional Swedish shots are also sold in holiday packs.
  • Discounts, such as "Buy 1, get 1 free" and "One can 1.50 two cans 2.50" type deals, are prohibited.
  • No product may be favoured, which in effect means that the beers are not refrigerated, since otherwise all beer would have to be refrigerated which is too expensive.
  • The minimum age to purchase beverages above 3.5% alcohol is 20 years of age. A main reason to have Systembolaget as a monopoly is to enforce this age limit. Several tests have shown that restaurants and food shops often sell 3.5% beer to people below the minimum legal age of 18.
  • People who look under 25 have to show an identity document. This has to be certified identity cards from the Nordic countries, national identity card from an EU country or be a passport.
  • Systembolaget is not allowed to sell alcoholic beverages to drunk people or to people that they have reason to believe are purchasing for someone under legal age.

Systembolaget has a strict monopoly status on alcohol sales to consumers in Sweden, except for restaurant and bars, where alcohol can be sold for immediate consumption (bottles must be opened and can't be brought home).

  • Private import for own consumption is allowed, based on EU regulations and court cases, both at private travel and through postal package.[4] Still Sweden is able to levy taxes on the receiver of alcohol sent in postal packages.
  • Other companies (producers and importers) can sell directly to restaurant and bars (EU enforced rule).
  • Producers of alcohol, such as vineyards, are not allowed to sell bottles of their products to consumers.
  • The only exceptions to the monopoly to consumers are export shops at airports, which can sell alcohol to people checked in for a flight outside the EU.[5] Alcohol can not be sold on boats on Swedish waters, but the shop is opened at the border to international or foreign waters.

Taxation and pricing

As with other government-owned monopolies within free-trade areas, there are several aspects that govern the operation. All product selections and displays must be based on customer preferences, and every producer and distributor must be handled the same way. All marketing activities must be for the company itself and its own services, never for an individual product. This is also the reason why all products are taxed on alcohol content, not on price, and that all products are sold with the same profit margin. This explains why an off-brand vodka can be seen as very expensive when compared to a premium-brand spirit bottle of a similar size.

Beer is not so highly taxed anymore in order to protect Swedish breweries and their employment opportunities against purchase during travel abroad. It is (as of 2011) 1.66 SEK per % alcohol and litre, which means 4.15 SEK for a 5% beer can (50 cl). Such a can usually costs about 10 SEK (1.05 EUR) at Systembolaget. For wine the tax follows a table. For 12% wine the tax is 21.58 SEK per litre. For distilled products the tax is 5.0141 SEK per % and litre (501.41 SEK per litre alcohol or 251 SEK for 1 litre of 50%).[6]

History

In 1766 the Swedish king, Adolf Frederick, decided, after several unsuccessful attempts at regulating alcohol consumption, to abolish all restrictions. This led to virtually every household making and selling alcohol.

At the turn of the 19th century, alcohol was highly popular among Swedes. An estimated 175,000 home distilleries had developed by this time, using tremendous amounts of grain and potatoes that otherwise would have been consumed as food to manufacture alcohol. It was later said that most men in Sweden abused alcohol. Women rarely drank alcohol, since it was considered inappropriate.

In 1830, the first moderate drinking society was started in Stockholm. A few decades later, the first fully-fledged temperance organisation was formed. Private gain from selling alcohol was strongly criticised by these groups, and this opinion was embraced by doctors and members of the Church of Sweden. In 1850, alcohol began to be regulated by the state. In the city of Falun, a state organization was established to regulate all alcohol sales in the city and make sure it was being done responsibly.

In 1860, a bar was opened in Gothenburg where the state had handpicked the employees and decided how the bar should be run. Anti-social or intoxicated people were to be excluded. This was where people both bought and drank their alcohol. This was also the year it became illegal to sell to people under the age of 18. Similar state-regulated bars and stores began to open in other towns across the country, and they were hugely successful. Originally the profits were kept privately by the owners, but in 1870 the state decided all profits should go to the state.

During the First World War, alcohol was strictly rationed. The state bars and stores started registering purchases. People were allowed only two litres of liquor every three months, and beer above 3.6% ABV (2.8% ABW) was banned.[7] After the war, the rationing continued, using the Bratt System of a household ration book called a "motbok", Gender, income, wealth and social status decided how much alcohol you were allowed to buy. Unemployed people and those receiving social assistance were not allowed to buy any alcohol at all, while as the motbok was issued by household instead of per person, meant that wives shared their allowance with their husbands and in effect got nothing at all. A referendum on prohibition in 1922 advised government not to issue total prohibition. The rationing system was very unpopular. When even the temperance movement protested against it (they felt it encouraged consumption), the government decided a new policy was needed.

In 1955 the rationing system was abolished, and people were allowed to start buying as much alcohol as they wanted from Systembolaget stores (as long as they are sober, over 21 and not suspected of buying for later private resale). This led to increased consumption, so the government increased taxes heavily and made it compulsory that everyone had to show ID to get served. There was also an age limit of 21, which in 1969 was changed to 20. In 1965 it became legal for privately run stores to sell beer up to 4.5% with an age limit of 18. 12 years later, after alcohol consumption – especially that of light beers – rose dramatically, the limit was lowered to 3.5%.

Originally, Systembolaget customers were required to ask shop attendants or use desk service to retrieve desired products. This policy was based on the hypothesis that personal, face-to-face interaction would discourage patrons from buying in conspicuous quantities. Customers would not be permitted to serve themselves until 1991. This self service policy was gradually and subsequently expanded into all Systembolaget stores between 1991 and 2014. The last Systembolaget store to convert to self service was the branch at Högdalen in southern Stockholm, which was converted in October 2014.

In September 1996, Systembolaget began sales of bag-in-box cask wine after the European Court of Justice ruled in favour of the Swedish brewery Spendrups after it complained that Systembolaget's earlier refusal to sell boxed wine violated the EU's free trade agreement with Sweden. By the mid-2000s boxed wine accounted for over half the volume of wine sold at Systembolaget.

In 2003, an almost free quota (for personal use) was allowed when travelling into Sweden from another EU country, resulting in lower sales for Systembolaget, especially in Scania, which borders Denmark. Increase in Danish prices has made people drive to Germany instead for purchase. Some cars have been stopped by Swedish police for overweight but not for alcohol import, since four people are allowed to have a total of 800 litres of beer and wine, above the allowed load of many standard cars.

In June 2007, a panel of EU judges commented that restrictions on the private import of alcohol by postal package were unjustified,[4] and Sweden allowed this some time after.

Swedish municipalities retain the right to ban the establishment of Systembolaget shops within their jurisdiction. This has become more rare over time, because of a more liberal political attitude and because of the belief that other shops lose customers when people drive to other municipalities for shopping.

Corruption controversy

The corruption scandal first gained widespread media attention in the autumn of 2003, with Systembolaget issuing its first press release regarding the preliminary investigations on 7 November 2003.[8] On 11 February 2005, 77 managers of Systembolaget stores were charged with receiving bribes from suppliers, and one of the largest trials in modern Swedish history followed. 18 managers were found guilty on December 19, and then on February 23 another 15 managers were found guilty.[9][10]

In January 2009 allegations were aimed against Fondberg & Co, the second largest supplier of wine to Systembolaget with a market share of 8.5%, concerning large payments made to the Gibraltar firm Bodegas, and are under investigation by the Swedish Tax Agency.[11]

Advertisements

Systembolaget makes advertisements focused on the side effects of drinking, and the encouragement of drinking moderately. Many of their ads are focused at stopping teenagers from obtaining alcohol, and to press on people under 25 showing identification. During November 2008, Systembolaget launched a campaign where people under 25 would get a free pack of chewing gum saying "Thank you for showing ID" when showing their ID to the cashier before they were asked to.

Systembolaget is not allowed to advertise its products to increase its sales. However, since 2005 the producers are allowed to advertise their products in Sweden[12] (only products of less than 15% alcohol, and not on radio and TV).

Systembolaget has come under scrutiny for their "Experten" advertisement campaign which portrays an American expert trying to boost the sale of Swedish Alcohol as well as referring to the destruction of Swedish families.[13][14][15][16][17] The controversy revolves around the revenue generated from selling alcohol being used to air the advertisements without buyers having an alternative method of purchasing alcohol thus not supporting the advertisements. Other groups have aired grievances over the advertisement's use of red white and blue ornaments in the advertisement referring to the American flag which is highly regarded as against the code of conduct.[18]

gollark: So all children would be raised centrally by the government.
gollark: Children should not have different life outcomes based on their parentage.
gollark: For example, children being sold into slavery by their parents is obviously really bad.
gollark: I would make a much better supreme eternal world dictator for life.
gollark: Life isn't actually very well-defined. and even if someone comes up with a satisfying detailed definition there's no particular reason to presuppose that that's the point at which things get assigned moral worth.

See also

References
  1. "Korta fakta om Systembolaget" (in Swedish). Systembolaget. Retrieved 2019-07-16.
  2. Ansvarsredovisning 2010 med finansiell rapportering, page 3 (percentage based on total turnover)
  3. "Our way of working". Systembolaget. Retrieved 2019-07-16.
  4. "Swedish booze import ban 'wrong'". BBC News. 5 June 2007. Retrieved 2007-06-06.
  5. All you need to know about duty-free shopping
  6. Aktuella skattesatser på alkohol
  7. Ölpolitik genom tiderna
  8. "Systembolaget's response to the current preliminary investigation". Systembolaget. 7 November 2003. Retrieved 2007-06-06.
  9. "77 Systembolaget managers prosecuted for bribery". The Local. 14 February 2005. Retrieved 2007-06-06.
  10. "Systembolaget managers fined". The Local. 23 February 2005. Retrieved 2007-06-06.
  11. Sjöshult, Fredrik (January 9, 2009). "Vinleverantör i ny härva" (in Swedish). Dagens Industri.
  12. Alkohollag (1994:1738) (Alcohol law) (in Swedish) see 4.Kap
  15. <ref
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