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Norway

DALL·E 2024-08-31 12.40.51 - An abstract artistic image representing Norway, blending deep

NORWAY

Political situation

The 2021 parliamentary elections in Norway resulted in a coalition government led by Jonas Gahr Støre's Labour Party and the Centre Party. Despite a slight drop in votes for the Labour Party, they retained their position as the largest party. Negotiations to form a majority government with the Socialist Left Party fell through due to disagreements over climate and welfare policies, leading to the formation of a minority government. Støre's cabinet has since had to rely on opposition support to pass budget motions, securing agreements with the Socialist Left Party for both the 2021 and 2022 budgets.

 

Domestically, the Støre government has focused on economic, labour, and welfare reforms. Key initiatives include combating social dumping, securing full-time positions with Norwegian working conditions, and halving ferry prices. The government has also introduced significant COVID-19 measures, including booster vaccine doses and COVID-19 passports while addressing rising electricity prices through various support schemes. Støre's climate policies emphasize a transition from fossil fuels to green energy, balancing Norway's petroleum industry with investments in renewable energy solutions.

 

Støre's administration has also taken steps to address social justice issues, such as issuing an apology to the queer community for past injustices and pledging to support Sami rights following protests over wind farms. Future directions include substantial investments in artificial intelligence and digital technology and a commitment to meet the NATO defence spending goal by mid-2024. Overall, the Støre Cabinet aims to build a resilient and inclusive Norway through comprehensive social policies, economic reforms, and climate action.

Government
Prime Minister Jonas Gahr Støre

Prime Minister Jonas Gahr Støre
Credit: NTB Kommunikasjon/Statsministerens kontor

Consumption trends

Alcohol consumption in Norway has shown notable trends over the years, with significant fluctuations driven by various factors, according to the Norwegian Institute of Public Health. Historically, total recorded alcohol sales per capita for individuals aged 15 and above were relatively stable until the mid-1990s, after which there was a substantial increase up to 2008, largely due to rising wine sales. However, beer and spirits sales have seen a slight decline in recent years. Following 2008, alcohol sales experienced an overall decline until 2014, after which they remained stable until 2019. The COVID-19 pandemic years of 2020 and 2021 saw a spike in alcohol sales, primarily due to travel restrictions that shifted alcohol purchases from international to domestic sources. Despite the increase in registered sales, population-based surveys indicated no significant change in self-reported alcohol consumption over time.

 

The Norwegian Survey of Alcohol, Tobacco, and Drugs, a telephone-based nationwide survey, has provided additional insights into alcohol consumption trends, particularly during the pandemic. This survey, which tracks the alcohol, tobacco, and drug use among individuals aged 16 to 79, reported stable alcohol consumption among Norwegians during the period from 2012 to 2022, with the exception of lower consumption during the pandemic years. Although registered alcohol sales increased in 2020 and 2021, the self-reported data did not reflect a corresponding rise in overall consumption, suggesting that the higher sales were likely due to changes in purchasing patterns rather than actual increases in alcohol intake.

 

By 2022, with the easing of travel restrictions, registered alcohol sales began to decline somewhat, though they had not yet returned to pre-pandemic levels, particularly concerning cross-border and duty-free sales. The data on alcohol consumption in Norway is primarily drawn from Statistics Norway and the Norwegian Survey of Alcohol, Tobacco, and Drugs, focusing on recorded sales and excluding unrecorded consumption such as home-distilled alcohol, tourist imports, and smuggled goods. These trends illustrate how external factors, such as travel restrictions during the pandemic, can significantly impact alcohol consumption patterns, even if self-reported behavior remains stable.

Consumption
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Alcohol taxation

In Norway, alcohol taxation is a significant component of the government's strategy to regulate consumption and generate revenue. Tax is imposed on all alcoholic beverages containing more than 0.7 percent alcohol by volume, whether produced domestically or imported. The tax rates vary depending on the alcohol content of the beverage. For instance, in 2024, spirits-based beverages are taxed at NOK 8.77 per percent by volume per litre, while beverages with lower alcohol content are taxed on a sliding scale, from NOK 3.53 per litre for beverages with up to 2.7 percent alcohol by volume, to NOK 22.99 per litre for those between 3.7 and 4.7 percent. Fermented beverages produced by small breweries benefit from a reduced rate, promoting the growth of local production.

 

The taxation system also extends to beverage packaging, adding another layer to the overall cost of alcohol in Norway. The unique aspect of Norway's alcohol taxation is its impact on pricing dynamics: more expensive wines, due to their higher price before tax, end up being relatively affordable compared to spirits, which are taxed heavily based on their alcohol content. The state's alcohol monopoly, Vinmonopolet, plays a crucial role in this system, with its operations closely regulated by the Norwegian Ministry of Health and Care Services. Vinmonopolet’s gross margin is kept low and transparent, with a ceiling of NOK 110 per bottle, and typically, 52 percent of the sales price of a standard bottle of wine is attributed to alcoholic beverage tax.

 

Vinmonopolet's profitability is also essential to the state, with its profits largely contributing to government revenue. Historically, the profit share to the state has been set at 50 percent of net profits after tax, ensuring that the monopoly operates efficiently while supporting public health goals through controlled alcohol distribution. This structured approach to alcohol taxation and regulation underscores Norway’s commitment to balancing public health concerns with economic considerations.

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Norway's excise tax on alcohol is significantly higher than the OECD average, particularly for spirits and wines. The excise tax on spirits in Norway stands at $89.09 per liter, which is nearly three times higher than the OECD average of $29.51 per liter. Similarly, Norway imposes an excise tax of $6.97 per liter on both sparkling wine and regular wine, compared to the OECD averages of $2.01 and $1.13 per liter, respectively. These elevated tax rates reflect Norway's rigorous approach to alcohol taxation, aimed at controlling consumption and reducing the social and health impacts associated with alcohol use, particularly for beverages with higher alcohol content.

Taxation
Alcohol availability

Key points:

  1. Strict access: Alcohol sales in Norway are tightly controlled by Vinmonopolet, with limited store hours and no sales in kiosks or gas stations.

  2. Enforced age limits: The legal age for purchasing alcohol is 18 for up to 22% ABV and 20 for stronger beverages.

  3. Fewer outlets: Norway has fewer retail outlets per capita compared to other Nordic countries, limiting alcohol availability.
     

In Norway, alcohol availability is strictly regulated to minimize its potential harm to society. Vinmonopolet, the state-controlled monopoly, is responsible for the retail sale of alcoholic beverages with higher alcohol content, and its operations are designed to ensure that alcohol is not overly promoted or easily accessible. The opening hours of Vinmonopolet are limited, with stores typically open from 10:00 to 18:00 on weekdays and from 10:00 to 16:00 on Saturdays, while remaining closed on Sundays and public holidays. These hours are among the most restricted compared to other Nordic countries, reflecting Norway’s commitment to reducing alcohol-related harm. Additionally, there are strict age limits for purchasing alcohol: individuals must be 18 years old to buy beverages with up to 22% alcohol by volume, and 20 years old for stronger beverages.

 

Compared to other Nordic countries, Norway has a highly controlled environment for alcohol sales. According to the data, Norway had 4,500 other retail outlets selling alcohol in 2020, which is fewer than Sweden and Finland but significantly more than Iceland and the Faroe Islands, which have none. Norway does not allow kiosks or gas stations to apply for licenses to sell alcohol, in contrast to Finland and Sweden, which have more lenient regulations in this regard. Moreover, while internet sales of alcohol are permitted in Norway, customers must choose whether to pick up their orders at Vinmonopolet stores, have them delivered to their door, or collect them from grocery stores with postal services.

 

In terms of store density, Norway has 6.3 Vinmonopolet stores per 100,000 inhabitants, which is higher than Sweden but lower than Iceland. All of these stores are self-service, aligning with practices across the Nordic region, where self-service is the norm. Norway’s total weekly opening hours for Vinmonopolet stores are also more restricted than in Finland and Sweden, reflecting a more conservative approach to alcohol availability. Unlike Sweden, which offers more flexible and extended hours, Norway prioritizes control over accessibility, consistent with its public health objectives. Overall, while all Nordic countries regulate alcohol sales to some degree, Norway stands out for its particularly stringent measures, aimed at curbing excessive alcohol consumption and minimizing its societal impact.

Availability

More information : Vinmonopolet

Advertising restrictions

Key points:
Comprehensive advertising ban: Norway strictly prohibits all forms of alcohol advertising for beverages containing more than 2.5% alcohol by volume to prevent increased demand and reduce alcohol-related harm.

Broad scope and enforcement: The ban covers all channels, including digital media, product packaging, and advertisements for non-alcoholic goods that share branding with alcoholic products.

Limited exceptions: Exceptions to the ban include editorial content in independent media and necessary industry communications, provided they are factual, non-promotional, and not intended to increase alcohol sales.

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Norway enforces a strict ban on alcohol advertising, rooted in the Alcohol Act, to mitigate the public health risks associated with alcohol consumption. The ban prohibits all forms of marketing that promote alcoholic beverages containing more than 2.5% alcohol by volume. This comprehensive restriction is designed to prevent increased demand for alcohol and to maintain societal awareness that alcoholic beverages require special regulation, distinct from other consumer goods. The ban is all-encompassing, covering any form of mass communication intended to promote alcohol sales, including digital and social media platforms, product packaging, and other marketing channels. The intent is to limit exposure and reduce alcohol-related harm within the population.

 

To enforce the advertising ban, Norway scrutinizes various factors, such as the sender's intent, the content and presentation of the information, and the communication channel used. Marketing is defined broadly to include any communication by entities with a financial interest in alcohol, such as suppliers and manufacturers, even if the content is factual or presented soberly. Additionally, advertising for goods or services that share branding with alcoholic beverages is also prohibited. For example, advertisements for non-alcoholic beverages or clothing using a brand name associated with alcoholic drinks are banned, as are any images or mentions of alcoholic beverages in advertisements for unrelated products like food or travel. These regulations extend to prevent indirect promotion of alcohol in other goods and services.

 

Despite the broad scope of the advertising ban, there are limited exceptions. Editorial content in independent media, such as newspapers and television, is generally permitted under freedom of speech protections, provided it is not intended to promote alcohol sales and is genuinely editorial. Necessary communications within the alcohol industry, such as factual, non-promotional information in trade journals or between license holders, are also allowed under specific circumstances. The overarching goal of these regulations is to prevent alcohol from being presented positively in any form, thereby protecting public health by discouraging alcohol consumption and minimizing its societal impacts.

Advertising

More information : The alcohol advertising ban in Norway: Effects on recordedalcohol sales, Drug and Alcohol Review

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