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Swedish Monopoly Threatened By Rebel Retailer

Is the Swedish alcohol monopoly in danger of being toppled by online sales?
© G. Noren/Systembolaget | Is the Swedish alcohol monopoly in danger of being toppled by online sales?
Online sales loophole challenges Swedish alcohol monopoly's omnipotence.

A small supermarket chain in Sweden has announced that it will begin selling wines in its stores – a move that has been called illegal by the national monopoly, Systembolaget.

The City Gross chain, which has 33 stores across the country, announced on its website that it would start offering wine in cases of six and 12 bottles.

Customers can order the wine online via City Gross's Danish distribution partner, Winefinder, but must collect their wine in store.

“City Gross is breaking the alcohol act,” said Systembolaget in a statement. In its view, the Swedish government and parliament are the only bodies that can “decide how alcohol should be sold, and not grocery stores nor foreign actors.”

However, there is uncertainty surrounding the legality of online sales. The Systembolaget monopoly was dealt a blow by the European Union in 2008 following a ruling that allowed Swedes to buy wine over the internet from other European countries for their personal consumption.

Despite the monopoly's opposition to the City Gross move, Magdalena Gerger, CEO of Systembolaget, said the company's decision to launch wine sales underlined the urgent need to redefine the country's alcohol legislation. “The law must reflect the reality we have today with online sales,” she declared.

Systembolaget boasts more than 400 stores, with a further 500 authorized retailers across the country serving smaller communities. They are currently the only retail enterprises permitted to sell wines and spirits above 3.5 percent alcohol.

However, Carola Grahn, the director of food and wine at City Gross, believes Swedes should be able to buy wine more easily. "We want to encourage the development of Swedish food and believe that now is the time to make it possible for our customers to have easy access to quality wines with food."

But opponents are concerned about the potential health risks posed by abolishing the existing monopoly. Systembolaget's primary objective is stated as: "To minimize alcohol-related problems by selling alcohol in a responsible way, without profit motive."

A 2006 study addressing the potential consequences of privatizing alcohol sales in Sweden, conducted by leading academics in the U.S. and Sweden, concluded that "the consequences of establishing a private licensing system would be detrimental to Swedish public health and safety," due to "the risk of increased sales and consumption of alcohol, especially by youth and heavy drinkers."

Systembolaget board member Cecilia Schelin Seidegard stressed that the legal uncertainty surrounding online sales could potentially pose a risk to public health. “This opens the door for a lot of actors who are driven by profit – without regard to the risks that alcohol brings.”

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