Systembolaget, Sweden’s state-owned Alcohol monopoly

“Hey bro, hey bro!” a Greek-accented voice called out and halted me. I turned to the sound.

He looked at me and continued, “do you know where we can get alcohol?”

“Huh? I thought you guys bought a lot last night?”

“Yea but we finished it already and we want to get somemore.”

“Hoo, I don’t think you can man… its Sunday and Systembolaget isn’t open. The only alcohol left is probably from the supermarket but that is less than 3.5%”

He looked at me with sad almost-puppy eyes. I felt like a party popper. “3.5% is better than nothing”.

Alcohol in Sweden is not cheap by European standards. I learnt that first hand when a German colleague complained about how expensive wine was, “and it’s not the good one ja.”

“Really? 10 Euros sound relatively cheap.”

“No no, 10 Euros the wine better be good. Good cheap wine in Germany is maybe 2 to 5 Euros. 10 Euros is quality wine already.”

Damn… where I come from, 10 Euros (around SGD 15) is the cheapest wine you can get from 7Eleven.

But why is alcohol expensive in Sweden? Because alcohol is controlled by a state monopoly. Alcohol can only be bought at bars or the official alcohol company, the state-run Systembolaget. While it is legal to drink alcohol at 18 years old, only people older than 20 are allowed to enter and purchase alcohol from Systembolaget. And you will be carded if you look under 25 (apparently I look under 25 all the time – good way to feel young again).

Systembolaget is not allowed to advertise discounts such as Buy 1 Get 1 free and is legally obligated to sell beer cans and bottles individually. No six-packs here. In fact beer brands cannot be prioritised so beer is not sold chilled, because chilling one brand of beer means prioritising that brand so the alternatives would be a prohibitive chilling of all beers or no chilling at all.

So how does alcohol pricing work to make a drink so expensive? Taxes. All alcohol is sold at the same profit margin, meaning there is no different mark-up for a drink. But instead of a sin tax the tax is based on alcohol content. The more alcohol content the higher the tax. By this logic I imagine that a bottle of 12 year old McCallan would be cheaper in a place here than elsewhere. The most expensive alcohols are cheaper than elsewhere but the cheap ones are more expensive. Someone do the comparisons and let me know!

 But how did this start? Why did Sweden start a state monopoly on alcohol sales?

In 1766 alcohol controls were completely abolished in Sweden and this led to home brewing. Which in turn led to heavy consumption of grain and potatoes as well as alcohol abuse among the male population (women then did not drink because it was not sexually proper).

This continued until the 1830s when the Temperance movement arrived in Sweden and found in the Church of Sweden and medical doctors allies to attack the abuse of alcohol. It was around this time (1850) that state control was first introduced.

Then in 1860 a bar was opened in Gothenberg where the government served as HR Manager and picked the staff. The temperance movement continued with the legal age of 18 introduced then. These state regulated bars mushroomed all over the country and the profits were later completely taken over by the government (instead of the bar owners).

Strict controls were brought in during the first World War when alcohol was strictly rationed. Drinks above 3.5% alcohol content were banned and drinked below were heavily regulated through rationing. This continued until 1955 when the rationing was lifted and people were allowed to buy as much as they wanted from Systembolaget. A complete state monopoly was implemented in 1955 despite losing a national referendum on the question (as of 2013, 77% of Swedes support the state monopoly of alcohol).

Even the stores today are considered a relaxtion on previous stricter policies. Until 2000 stores were basically like pharmacy counters. You had to take a queue number and approach the counter to purchase alcohol. This was progressively abandoned but still exists in certain small towns.

Did I mention that Systembolaget only opens for half a day on Saturday and is closed on Sunday? Thats because Systembolaget sets the rules on when they open, and therefore when you can buy. It also sets rules on where there an outlet will be. In a country of almost 10 million people, there are only around 430 outlets where you can get your alcohol fix. Being a government monopoly, the objective of the company is not profits but to control people’s drinking. Look at their advertisements.

How else do they control your drinking. They only provide small plastic bags, and no larger sizes, which limits how much you can buy if you don’t bring your own. I reckon, just as plate sizes work for food the same things happens with alcohol – smaller bags, lesser items.

Obviously bars and pubs also sell alcohol but these places are even more expensive than the already expensive Systembolaget. Makes you think twice about drinking. There are other ways to deal with alcohol and social “ills”, including a sin tax where the cost of consumption increases because of an increase in taxes. This “punishes” those who drink and leaves those who don’t untouched.

I don’t think there is a clear right or wrong and the implementation is politically difficult. Between a more punitive sin tax and a more correctional state monopoly which do you think works better?