Ask any Swede and Finn of a certain age how he or she feels about alcohol and the answer will dwell at length on the destructive drinking habits of their compatriots. According to this view, Nordic people consume hard liquor in excessive quantities in order to get drunk. Whatever the original explanation for why Finnish or Swedish people appear to have an unhealthy attitude towards drinking, social reformers in the early 20th century clamored for strong restrictions on drinking. After 1945, Finland and Sweden created state monopoly systems to control every aspect of the alcohol trade. State retail stores sold liquor to consumers and a state production company manufactured distilled spirits and imported alcoholic beverages from abroad. In Sweden, Systembolaget was the only legal purveyor of strong beer, wine, and liquor while Vin och Sprit produced and marketed distilled spirits, imports, and set prices for all alcoholic beverages. In Finland, Alko controlled production, distribution, and retail of alcoholic beverages. After temperance ideology lost its power in the 1960s, the Swedish and Finnish authorities relied upon two basic tools to discourage excessive drinking while promoting light alcoholic beverages. A restricted number of retail outlets with limited opening hours inhibited spur of the moment shopping trips and extraordinarily high excise taxes discouraged unplanned purchases.
By all accounts, Finnish and Swedish alcohol control policies have been a great success. In 1988 alcohol consumption in Sweden stood at 5.3 liters of pure alcohol per person and in Finland at 7.6 liters of pure alcohol per person. Denmark, which never created a state monopoly system and only taxed liquor highly, consumed 9.4 liters of pure alcohol per person in 1988. Moreover, most Finnish and Swedish consumers have abandoned distilled spirits. In 1990, spirits accounted for 36% of total consumption of 100% alcohol in Finland and 33% in Sweden. Beer became the most popular alcoholic drink sometime around the mid-1970s in each country.
European Union and Alcohol Control Policies
It was clear from the beginning that a state monopoly on every aspect of the liquor trade was incompatible with European Union membership. Commercial state monopolies contradict Community law because of its alleged interference in foreign trade. At a more basic level, the European Union was confused about why alcohol monopolies were considered such powerful instruments in the war against drinking and alcoholism. European member states and the European Commission in Brussels held very different views on alcohol and its role in society than Finnish and Swedish policy officials. The European Commission defines alcohol either as an industrial or agricultural product. Beer, including strong ales and porters, is treated like a soft drink because taxation is so low that it is not subject to regulation anywhere in the European Union. Wine is considered an agricultural commodity and falls under the Common Agricultural Policy. Since it costs a small fortune in tax payers' money to store wine surpluses and to subsidize marginal wineries, the Commission actively promotes wine consumption.
Distilled spirits are regarded as an alcoholic beverage but the Commission is loath to issue restrictive rules in this area because the liquor business is controlled by giant international corporations, which are well-organized. The lobby group of the large liquor companies, the Amsterdam Group, warned the Commission in 1992 that it employed 650,000 people directly and another 1.5 million people indirectly. It follows that the Commission is reluctant to take on the international liquor trade, which in any event, does not provoke strong feelings one way or the other in Brussels.
Negotiations with the Commission
To comply with Community law, Swedish and Finnish parliaments passed new alcohol acts in 1994. The 1994 Alcohol Act demonopolizes the production, wholesale distribution, and foreign trade of alcohol while the retail sale of alcoholic beverages stays under the control of a state company. …