Systembolaget

Type	Government enterprise
Industry	Food and drink
Founded	1 October 1955 (1955-10-01)
Headquarters	Stockholm, Sweden
Number of locations	441 (2017)
Key people	Göran Hägglund, Board chairman Ann Carlsson, CEO
Products	Alcoholic beverages
Revenue	29.4 billion SEK (2017)
Operating income	282 million SEK (2017)[1]
Number of employees	5,700 (2017)
Website	www.systembolaget.se

Systembolaget (Swedish: [sʏˈstêːmbʊˌlɑːɡɛt] ^ⓘ, "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 acts as a portal for private companies selling alcohol on the Swedish market and as of 2023, it represents 1,200 vendors ranging from small local breweries to large scale importers and multinational companies, selling products from a total of over 5,000 producers from all over the world.^[2]

Systembolaget also sells non-alcoholic beverages, although this product segment represents less than half a percent of the company's total sales of beverages.^[3] The minimum age to buy alcohol at Systembolaget is 20 years.^[4] 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's stores must close no later than 20:00 on weekdays and 15:00 on Saturdays. On Sundays and public holidays all Systembolaget's stores are closed. Systembolaget's stores are also closed on Christmas Eve and Midsummer Eve.

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 are not 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 20 kr two cans 30 kr" type deals, are prohibited.
• No product may be favoured over another, which in practice 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 or driving licenses from the Nordic countries, national identity card from an EU/EEA country or be a passport.^[5]
• 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.
• In villages too small for a profitable Systembolaget shop and too far away from a shop, Systembolaget contracts food shops to sell alcohol. Such alcohol must be sold on demand and not on shelves among other food or beverages.

Systembolaget has a strict monopoly status on alcohol sales to consumers in Sweden, with the following exceptions:

• Restaurant and bars can sell alcohol for consumption on location, which is not allowed to bring outside the premises (bottles must be opened). In other countries people can bring a bottle of wine home if it's considered too much to drink all on location, but in Sweden they must be consumed or wasted.
• Private import for own consumption is allowed, based on EU regulations and court cases, both during private travel and by postal package.^[6] Still Sweden is able to levy taxes on the receiver of alcohol sent by 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 themselves sell bottles of their products to consumers, but have the right to sell them through the nearest Systembolaget shops if they are not large enough for nationwide sales. This has been a point of debate in the 2022 election, and the new government wants to allow such shops.^[7]
• Export and duty-free shops at airports can sell alcohol to people checked in for a flight outside the EU.^[8] Alcohol cannot 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 2023) 2.12 SEK per % alcohol and liter, which means 5.3 SEK for a 5% beer can (50 cl). Such a can usually costs about 10 SEK (0.88 EUR) at Systembolaget. For wine, the tax increases based on the wine's alcohol by volume. For 12% wine, the tax is 27.49 SEK per liter. For distilled products, the tax is 5.2697 SEK per % and liter (526.97 SEK per liter alcohol, or 263.48 SEK for 1 liter of 50%).^[9]

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. In 1837, the Svenska Sällskapet för Nykterhet och Folkuppfostran (The Swedish Society for Temperance and Public Education) was founded as the country's first fully-fledged temperance organization.^[15] It was immediately promoted by the King, and quickly grew to 10,000 members with local chapters around the country. The Church of Sweden also strongly promoted temperance. Private gain from selling alcohol was strongly criticised by these groups; this opinion was embraced by doctors and members of the Church of Sweden. In 1850, the state began to regulate alcohol. In the city of Falun, a regional organization was established to regulate all alcohol sales in the city and ensure that sales were 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; antisocial and or intoxicated people were to be excluded. This was where people both bought and drank their alcohol, and this subsequently became the foundation for the Gothenburg Public House System used in Norway, Finland and the UK. 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 it was decided that all profits should go to the state.

During the First World War, alcohol was strictly rationed. Thus, the state bars and stores started registering purchases. People were allowed only two liters of liquor every three months, and beer above 3.6% ABV (2.8% ABW) was banned.^[16] 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 one was allowed to buy. Unemployed people and welfare recipients were not allowed to buy any alcohol at all, while as the motbok was issued by household instead of per person, it meant that wives had to share their household 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, all regional alcohol monopolies were merged into the present-day Systembolaget enterprise, and the above-mentioned rationing system was abolished, so 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 lowered 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 (mellanöl) – 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. Still, several shops have their hard alcohol at the checkout where customers need to ask for it.

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 who 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 traveling into Sweden from another EU country, resulting in lower sales for Systembolaget, especially in Scania, which borders Denmark by sea. Increase in Danish prices has resulted in people driving to Germany instead for purchase. Some cars have been stopped by Swedish police for overweight but not for alcohol import, since four people are collectively allowed to have a total of 800 liters of beer and wine, which is 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;^[6] as a result, Sweden allowed this some time after.

Swedish municipalities retain the right to ban the establishment of Systembolaget shops within their jurisdiction.^[17] This has become much rarer over time, because of a more liberal political attitude and the belief that other shops lose customers when people drive to other municipalities for shopping.

Corruption controversy

A massive corruption scandal (Systembolagshärvan) 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.^[18] 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 19 December, and then on 23 February another 15 managers were found guilty.^[19][20]

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.^[21]

Advertisements

Systembolaget makes advertisements on the side effects of drinking, and ones to encourage moderate consumption of alcohol. Many of their ads aim to stop teenagers obtaining alcohol and to encourage those under 25 to voluntarily show identification when purchasing. In November 2008, Systembolaget launched a campaign where people under 25 would get a free pack of chewing gum with a "Thank you for showing ID" compliment, if they showed ID to the cashier before they were asked to.

Systembolaget is not allowed to advertise its products to increase sales. However, since 2005 the producers are allowed to advertise their products in Sweden^[22] (only products of less than 15% alcohol, and not on radio and TV).

Public opinion

According to a study conducted by David Karlsson, Sören Holmberg and Lennart Weibul in 2023, 59% of Swedes support that alcoholic beverages can still be purchased only in Systembolaget stores, and this proportion is constantly increasing.^[23]

See also

• Alcohol monopoly
• Alcohol in Sweden
• Gothenburg Public Houses
• Temperance movement
• State store

Further reading

• Graham Butler "Alcoholic Goods and Sweden: The EU Law of Private Imports, Retail Sale, and State Monopolies". Stockholm: Swedish Institute for European Policy Studies, 2022. ISBN 978-91-89498-04-4.

Notes

References

External links

• Systembolaget – Official site
• Systembolaget Demystified – The Scandinavian Insider Magazine
• Systembolaget to pay SEK 40 million – The Scandinavian Insider Magazine