New Finnish Government proposes major overhaul of alcohol laws to increase market competition

17.06.2023 - The new Finnish coalition government has just approved its coalition agreement, which entails significant changes to the country's alcohol laws, aiming to increase competition and liberalize markets.

In the field of alcohol and substances, the new government has outlined the following objectives:

Firstly, the maximum alcohol content for beverages sold in grocery stores will rise from 5.5 percent to eight percent. However, this increase will apply solely to drinks produced through fermentation.

Secondly, a study will be conducted by the midway review on the possibility of liberalizing the sale of wines with a 15 percent strength. This suggests a potential opening up of the retail sector for stronger wines, which currently can only be purchased from Alko, the state-run alcohol retail monopoly.

Further loosening of restrictions is also proposed for local small-scale and artisanal breweries, distilleries, and vineyards. These establishments will have the opportunity to sell their products directly to consumers from their manufacturing sites, granted they possess a retail sales license.

In terms of the purchase of alcohol from abroad, the government aims to clear the existing ambiguity around the legality of Finns purchasing alcohol from companies operating in other EU countries through distance selling procedures.

In addition to the proposed alcohol reforms, the new government is set to revise alcohol taxation. The government plans to decrease beer taxes, a move that is projected to reduce state revenue by 25 million euros. However, it aims to counterbalance this deficit by increasing taxes on spirits and wine. This latter adjustment is anticipated to yield an additional 40 million euros.

Lastly, the new coalition plans to bring nicotine pouches under the scope of the tobacco law, with their tax treatment to be adjusted accordingly. These products and other nicotine-containing products currently falling under the tobacco law, but not carrying excise taxes, will be taxed in a manner equivalent to the tax on nicotine-containing e-cigarette liquids, as applicable.

These proposed changes signal a departure from the long-standing tradition of strict alcohol regulation in Finland, indicating a shift towards a more liberalized approach. However, the government faces opposition and criticism from health experts and proponents of the current retail monopoly system, who warn that such measures could negatively affect public health.

The chapter on alcohol trade in the new governments coalition agreement "Strong and caring Finland":

"The government is responsibly reforming alcohol policy in a European direction and continues the comprehensive reform of the Alcohol Act carried out in 2018. The retail sales permit defined in the current Alcohol Act, section 17, is expanded to cover not only drinks containing up to 5.5 percent alcohol but also drinks prepared by fermentation containing up to 8 percent alcohol. By the mid-term policy review, the Ministry of Social Affairs and Health and the Ministry of Economic Affairs and Employment will jointly investigate the liberation of the sale of 15 percent strength wines.

An independent study will be conducted on transferring the regulation of alcohol policy from the Ministry of Social Affairs and Health to the Ministry of Economic Affairs and Employment. The government will not change Alko's public health mission and status.

All domestic small and artisan breweries, micro-distilleries, and vineyards will be allowed to sell their products directly to consumers from their manufacturing sites with a retail sales permit.

The prevailing ambiguous interpretation will be clarified unequivocally, so that Finns have the right to purchase alcohol from companies operating in other EU countries through remote sales procedures. Alko and domestic actors with a retail sales permit will also be enabled to conduct online alcohol sales and other retail sales concepts based on distribution and pickup, ensuring age limit control. Domestic retail sales strength limits are observed in domestic delivery sales, taking into account exceptions for artisan breweries, microbreweries, and estate wines.

Finland seeks to be listed in the EU's list of wine-producing countries.

Restrictions on the foreign-directed marketing of Finnish operators will be removed within the limits of EU law.

The reforms will be implemented in an EU-law acceptable manner."

The full document can be found HERE