Long-standing Nordic tradition has emphasised strict regulation of alcohol advertisement and distribution in the wider interests of public health. This practice has inevitably caused the existence of state-run monopolies in countries such as Sweden – only one of two EU member states to have a monopoly on the distribution of alcohol. In unison, these regulations raise a pressing question: is regulating alcohol advertisement and distribution necessary for preserving public health?
Systembolaget, Sweden’s alcohol monopoly, is the only retail store permitted to sell alcoholic beverages with a concentration of alcohol greater than 3.5%. Beyond a monopolised source of alcohol distribution, Sweden also enforces strict laws against the marketing of alcohol, with bans on alcohol advertisements effectuated through radio and television and a prohibition on print advertisements of beverages with more than 15% alcohol. To deter the immediate consumption of alcohol upon purchase, the beer sold by Systembolaget must be kept at room temperature at all times.
A collection of such legal and arbitrary measures raises significant questions about the efficacy of these deterrence methods and whether they compromise the fundamental liberty of individuals in Swedish society.
Anti-alcohol pressure groups and public health campaigners contend that a ban on alcohol advertising is directly proportional to a decrease in alcohol consumption and a consequent decrease in alcohol abuse. Yet, findings in existing academic literature examining the causal relationship between alcohol advertising and consumption suggest otherwise. Numerous studies dissecting the relationship between spending on alcohol advertising and alcohol consumption have obtained no identifiable correlation. This conclusion is based on the reasoning of reverse causation and selection bias.
For example, the advertising of alcohol through social media targets and complements drinkers who actively follow alcohol brands across multiple platforms, but advertising cannot in and of itself be deemed the root cause of initiating alcohol consumption amongst never-drinkers. Although public attitudes towards alcohol consumption dictate a country’s support of alcohol advertising bans and reduced consumption, these attitudes do not indicate that alcohol advertising bans reduce total alcohol consumption.
Sweden amended its alcohol legislation to more closely align itself with the requirements of EU law. It was party to the 1994 European Economic Area (EEA) Agreement, which outlined four fundamental freedoms: free movement of goods, services, persons, and capital, before acceding to EU membership in 1995. This accession highlighted a fundamental divergence between EU law emphasising the free internal movement of goods among EU member states and Sweden’s retail monopoly, which stressed limits on alcohol consumption, distribution, and movement in the interests of public health.
Inevitably, since 1995, Sweden has had to adopt a non-discriminatory approach towards alcohol goods produced in or imported from other EU member states. As such, Systembolaget has only maintained its exclusive rights to the retail of alcohol goods but remains hindered in its ability to dictate the free movement of alcohol into Sweden, which is in line with the shared values of the EU outlined in its Act of Accession. Consequently, the efficacy of Systembolaget is hampered, given its inability to regulate alcohol procured through unregulated channels such as imports and smuggling and thus prevent alcohol consumption.
More importantly, restricting alcohol advertising and consumption in Sweden has inevitably led Swedish consumers to resort to alternative channels of procuring alcohol. As such, for many Swedes, Systembolaget has increasingly morphed into a supplementary source to smuggled or traveller-imported alcohol, especially due to high taxes (25% VAT) on alcohol in Sweden.
Contrarily, other EU states, such as Germany, impose a comparatively minimal excise duty of €0.03 per beer bottle vis-á-vis €0.32 per beer bottle in Sweden, as of July 2023. As a result, it is unsurprising to witness increased cross-border alcohol smuggling between Sweden and Germany, with Swedish investigators uncovering smuggling operations involving families illegally procuring as much as six pallets of beer each day, especially from German border shops in places such as Fehmarn and Rostock.
Furthermore, as of 2008, the total amount of strong beer (with alcohol content > 5%) consumed in Sweden was 393 litres. Out of the 393 litres, 212 were purchased through Systembolaget, while a large portion of the remaining sales was constituted by alternative means such as smuggling and traveller-imported alcohol, which has been a permissible form of alcohol procurement since Sweden acceded to the EU in 1995. Therefore, an increasing amount of smuggled alcohol since the mid-1990s is indicative of the growing inefficacy of Sweden’s alcohol monopoly in achieving its aim of preserving public health while invariably constraining the personal liberty and legal decision-making autonomy of its citizens.
Unsurprisingly, the overarching impact of Sweden’s alcohol regulation policy in maintaining public health and reducing consumption has gradually dwindled. This reduced impact can be attributed to changing circumstances, including but not limited to evolving consumer preferences and Sweden’s accession to the EU, which eliminated barriers on alcohol imported into the country. Sweden’s recent decision to permit direct purchases of alcohol from vineyards, micro-breweries, and small-scale distilleries marks not just a trial but perhaps the beginning of a fated shift toward a more liberalised alcohol monopoly in the near future. With a rise in cross-border alcohol smuggling from European countries with low taxes on alcohol, such as Germany, and the diminishing influence of its alcohol regulation policy, one must ponder: is Sweden prepared to sacrifice the public health achievements of its restrictive alcohol policy for the freedoms of a liberalised market?
