20.03.2025 - The Finnish Competition and Consumer Authority’s (KKV) assessment suggests that expanding wine sales to grocery stores would increase availability but also lead to higher alcohol consumption, with the resulting social costs outweighing the additional revenue from alcohol taxes.
The Finnish Competition and Consumer Authority (KKV) published on March 18 a preliminary assessment of the potential effects of expanding wine sales. Alko considers it positive that the impacts of expanding alcohol sales are being examined from multiple perspectives.
Based on KKV’s report, the expansion of wine sales would significantly weaken Alko’s profitability, and Alko would have to undertake major adjustment measures. As a result of the change, the continuity of Alko’s operations as a whole would be uncertain.
"Alcohol is not an ordinary commodity, which is why its availability is regulated and restricted. KKV also highlights this fact. The government program has also stated that Alko’s public health role and position will be maintained," says CEO Leena Laitinen.
KKV takes the position that if wine sales were to be expanded, a decision would also need to be made on how the distribution of strong alcoholic beverages would be organized in the future.
Service network would shrink significantly "The legislative change in the summer of 2024 has reduced Alko’s sales volume by approximately 10%, as predicted by our forecasts. The decline has occurred across all product categories, not just in the case of fermented beverages with an alcohol content of up to 8%, which were affected by the expansion of sales," says Laitinen.
KKV also points out that the 2024 change rapidly reduced Alko’s share of sales for products up to 8% alcohol content to below 20%, and in the case of beverages up to 5.5% alcohol content—following the 2018 amendment—Alko’s share of sales has dropped to just a few percent. The expansion of sales to include wines with an alcohol content of 8–15% would significantly reduce Alko’s share of wine sales. Grocery stores have a retail network that is 12 times larger than Alko’s and statutory sales hours that are 20% longer. Grocery stores see 580 million customer visits annually, compared to just under 50 million at Alko.
Alko’s own analyses have arrived at similar conclusions to KKV’s calculations, which indicate that if wine sales were expanded, sales of wines at Alko would decrease by up to 70%, and sales of other products by 20%. According to this assessment, Alko’s retail network would shrink significantly, and its ability to serve as a nationwide specialty retailer would be weakened. KKV’s report shows that Alko operates efficiently, with consumer prices and profit margins on par with those in grocery stores.
"We have continuously developed our operations and improved cost efficiency over the years. Since 2019, our sales volume has declined by about 13%, but our profitability has remained stable. Expanding wine sales would lead to a significant decline in our financial results, making it impossible for us to continue fulfilling our core role as a nationwide service network," Laitinen states.
Stronger alcoholic beverages would also follow wine sales The expansion of wine sales would improve the availability of wine from the consumer’s perspective, but the halving of Alko’s retail network would reduce access to strong alcoholic beverages. In addition to the economic effects, EU legal constraints must also be considered. Maintaining a state-owned company that sells only strong alcoholic beverages would be legally unlikely. As a result, expanding wine sales would ultimately lead to the introduction of strong alcoholic beverages in grocery stores. Alko supports KKV’s view that when making decisions about alcohol sales, the entire alcohol retail system and the broader consequences of these decisions should be taken into account.
According to survey data, Finnish public opinion on alcohol policy has become even stricter over the past year, and Finns do not want strong alcoholic beverages sold in grocery stores. A survey conducted in January found that only 21% of respondents believed that wine should be available in grocery stores if this meant that strong alcoholic beverages would also be sold there.
Alko’s prices are competitive, consumption would increase KKV states in its assessment that the prices of Alko’s products with up to 8% alcohol content are competitive compared to those in grocery stores. If wine sales were expanded, KKV expects that price reductions would be minimal. The tax component of alcohol prices is already so significant that there is little room for price reductions.
Finland has one of the highest alcohol tax rates in Europe, and approximately 14% of all alcohol consumed in Finland is purchased from abroad through cross-border shopping or online orders. The alcohol tax on a bottle of wine in Finland is €3.42, compared to €1.92 in Sweden, €1.16 in Estonia, €1.14 in Denmark, €0.03 in France, and none at all in Spain.
State-owned companies like Alko are comprehensive solutions recommended by the WHO for responsible alcohol sales, helping to prevent alcohol-related costs and harms.
According to KKV’s assessment, the harmful cost impacts caused by increased alcohol consumption as a result of expanding wine sales would be greater than the additional revenue generated from alcohol taxes.
Customers satisfied with Alko’s service and selection Alko has a comprehensive service network. Three out of four Finns have access to Alko’s services within four kilometers. Alko’s strength lies in its expert and personalized service, provided by 2,400 industry professionals.
The report notes that the wine selection in grocery stores may not match that of Alko, except in the largest supermarkets. Even the smallest Alko stores carry around 550 products, while the average store has 1,250 products on its shelves. Expanding availability does not necessarily mean a greater or more diverse selection for consumers.
"We at Alko are delighted that customers gave our selection the highest school-grade rating of all time, 8.64, in February. Customer satisfaction with our service and online store is at an excellent level. We want to continue developing Alko as Finland’s own specialty store," Laitinen says.
Alko provides a platform where suppliers have equal opportunities to get their products into Alko’s online store and onto store shelves. Products in Alko’s standard selection are sourced through open product tenders. All suppliers can list their products in Alko’s online store under the special product category. Alko works with nearly 900 beverage suppliers, 250 of which are domestic.
"We are constantly developing new ways to serve customers even better. At Alko, we offer a high-quality and comprehensive selection at competitive prices across all beverage categories."
Source: Alko.fi