Statement on the government's proposal to amend the Alcohol Act
I thank you for the opportunity to state my opinion on the Finnish government's proposal to amend the Alcohol Act.
According to the government programme, the current (Finnish authorities' and the Ministry of Social Affairs and Health) ambiguous interpretation will be clarified to make it unambiguous, so that Finns have the right to purchase alcohol from companies operating in other EU countries through distance selling procedures. Based on the statements of the politicians , this has clearly not been successful. A clear proposal would have stated that:
- According to established EU case law, Finland has no right to hinder distance sales of alcohol from other Member States in any way, and EC demands it to be written into the Alcohol Act as well
- Distance sales will also be allowed for operators established in Finland
I would have liked a clearer discussion of EU case law, and the precedents that the Commission has raised both in the Pilot project and in the detailed statement. I thank the Ministry of Transport and Communications as the responsible ministry for reminding us that Finnish legislation only applies to operators established in Finland.
According to the Government Programme, the Government will actively utilise societal data resources and researched information in its decision-making. This would have been useful here, because high-quality sales data and impartial research on how the EU's free movement affects where Finns buy their alcohol are easily available. Since such data was not used in the proposal, I will try to supplement this in my own statement.
In addition, I would have liked an analysis of how the current alcohol policy affects the use of other intoxicants, especially for problem users. At the same time, I would have liked an analysis of the functioning of the monopoly, as the release of food wines into grocery stores is being discussed. I will also try to supplement this with data in my statement.
First, a summary of my observations:
- As an EU member, Finland does not have the authority to interfere with distance selling from other Member States
- Finnish authorities are not allowed to monitor cross-border distance selling
- The supply licence discriminates against foreign operators and restricts intra-Community trade, so it is breaching EU law, as the Commission stated in its detailed opinion
- The supply license is also problematic from the perspective of the protection of property guaranteed by the Constitution
- Only a good half of the alcohol consumed by Finns is purchased in Finland
- The basic pillars of alcohol policy, restrictions on availability and high taxes increase consumption, reward polysubstance use and direct almost half of Finnish purchases abroad
- The public health status of ALKO is an illusion
- ALKO does not act non-discriminatory, even though Section 25 of the Alcohol Act requires it
- Supervision of ALKO is non-existent
- The tax losses from distance selling are mainly theoretical
- Prohibiting influencer marketing would only apply to operators established in Finland, and would only strengthen the discrimination practiced by ALKO
More detailed arguments
Legal status of distance selling
The legal status of distance selling of alcohol in Finland has been clear for a long time, Finland cannot interfere in any way with sales from other EEA countries and Finnish law does not apply to it:
- According to Dassonville (6/74), “all provisions of the Member States concerning trade which may restrict intra-Community trade directly or indirectly or actually or potentially” are prohibited
- According to Rosengren (C-170/04), this applies even if the buyer's Member State has an alcohol retail monopoly.
- Google Ireland (C-376/22) confirms the provision of the e-commerce directive that Member States do not have the right to impose requirements on service providers established in other Member States, and that exceptions can only be made for an individual service if it can be shown that the service in question would cause significant harm, for example to public health. This is of course impossible in the case of regular alcohol, when the share of an individual service in Finnish consumption is fractions of a percent.
- Pohjanri (C-596/23) stated that in accordance with Article 36(1) of the Excise Duty Directive 2008/118/EC, the seller is liable for tax if he in any way, directly or indirectly, directs or facilitates the organisation of transport. Therefore, online shopping based on distance buying (buyer pays the taxes) is impossible
Based on these, it is clear that Valvira's instructions, both online and in person, are unlawful in all respects, and that they also direct sellers to conduct activities that lead to tax offences. An example of this is the Vironviina case currently before the Supreme Court, where hopefully no party will be convicted, having violated the law while complying with the instructions of the supervising authority and the supervising ministry.
According to the memorandum of the 2001 Electric Trading Working Group dated 8.3.2001 and the statement of the Ministry of Social Affairs and Health (9/69/2001), it is clear that the Finnish authorities, and especially the key figures in the alcohol sector at the Ministry and STTV, knew and understood this. The latter saw an import ban as the only possibility to intervene in online sales, but the ECJ ruled against it in the case of Commission v Sweden (C-186/05).
The proposal also incorrectly claims that Sweden would have allowed distance selling in 2023 with the Winefinder decision. As the judgment clearly explains, Sweden amended its own law to comply with EU law after losing two cases at the ECJ in 2007 (Rosengren and Commission v Sweden). The irony is that at the same time, STTV got into their heads that they had some jurisdiction in relation to distance sellers located in other EU countries, and that this was not even corrected when the ECJ's very clear decisions came. The fact that this activity has been allowed to continue for over 18 years, despite three detailed opinions from the EU Commission, puts Finland's legality control in a strange light.
The proposal gives the Visnapuu case an unreasonable amount of space, considering that, according to the Chancellor of Justice, it concerned only an isolated case that in no way represents typical distance selling. Instead, the already mentioned Rosengren and Commission v. Sweden would have deserved considerably more space, also in terms of what it reveals about the activities of the Ministry of Social Affairs and Health, Valvira and Customs since 2007.
Section 17b requires that a distance seller established in another country mark the package as containing alcohol. Not only is the provision general, the e-commerce directive and established case law prohibit such requirements. Requiring a visible marking of the contents also makes the packages attractive for thieves, and Finland liable for the losses resulting from such a demand.
Finnish authorities may not supervise cross-border distance selling
Section 60 proposes that “The Social and Health Licensing and Supervision Agency shall supervise … cross-border distance selling throughout the country”. According to the e-commerce directive, distance sellers are supervised by the authorities of each distance seller's country of establishment, and the Finnish authorities have no jurisdiction over them.
The delivery permit discriminates against foreign operators
Requiring a delivery permit from foreign distance sellers or the transport companies they use is contrary to the free movement of goods, the e-commerce directive and the above-mentioned Dassonville case, just as the Commission states in its detailed opinion. It does not achieve any public health benefit, but is a disguised attempt to protect ALKO in particular from foreign competition.
Requiring a delivery permit from the transport companies used by foreign distance sellers is discriminatory, because international transport companies use dozens of subcontractors, who in turn use hundreds of subcontractors, and many of their drivers will not be involved in any alcohol transport throughout the year. Subcontracting is done per route, and the packages to be delivered are usually cleared on the same day, so in practice, every driver in Finland's nearly 10,000 transport companies should have the right to deliver alcohol only in case there might be one alcohol shipment, which increases costs significantly. Domestic operators, on the other hand, have sufficient volume to maintain established routes and transport companies, and their significantly shorter lead times are much easier to manage.
The delivery permit is also problematic from the perspective of the protection of property guaranteed by the Constitution
Once the customer has paid for the drinks, they are his property. On what legal basis can a transport company keep the customer's property for itself, regardless of the customer's possible drunken state? And at whose expense? Is drunken state in one's own home a constitutionally permitted reason to punish a person? What about the 17% of workers who work night shifts? Don't they have the right to relax when they come home from work? Minors are a separate issue, they are not allowed to possess alcohol, so in that case the authorities have a clear reason to act.
Only a little over half of the alcohol consumed by Finns is purchased in Finland
The estimate used in the proposal on passenger imports and online shopping is based on a THL study, which interviews 500 people every two weeks and asks them how much alcohol they have imported from abroad and how much they have purchased online.
According to Statistics Finland, 40% of the population goes abroad for leisure and 9% for business trips. It is probably justified to claim that the majority of the latter also belong to the previous group. On average, 8% of all travelers go abroad in a given two-week period. Therefore, on average, only 16 of all respondents have ever been abroad. When MARA's study shows that 6% of travelers buy 48% of alcohol, it is clear that this study does not produce anything on which to base decisions.
Postimees published a study in 2015, according to which Finns buy 34% of the alcohol purchased in Estonia. In 2024 figures, this would mean that Finns would buy over 4 million liters of 100% alcohol there.
According to Tallink, their sales on the Helsinki-Tallinn route were 250 million in 2023. More than half of the revenue is sales on board, mostly alcohol to Finns. A conservative estimate is that tax-free sales of alcohol to Finns are 100 million, which would mean 4 million liters of 100% alcohol. Since Tallink has a 50% market share on the route in question, 8 million liters are purchased from that route alone. According to Statistics Finland, the share of people arriving in Helsinki from Estonia among all ship passengers arriving in Finland is 55%. Assuming that imports per passenger are the same regardless of the port, purchases from ships would total 17.8 million liters. This is also supported by Tallink's figures, according to which sales per passenger are 50% higher on ships arriving from Sweden than on ships arriving from Estonia.
If we assume that the principle that 10% of the population consumes half of the alcohol also applies to consumption while traveling, and that 10% are men who get drunk with 1.5 per mille every single day, consumption during trips to Estonia would be about 160,000 liters of pure alcohol, i.e. only a fraction of purchases. Following the same formula, consumption during trips to other countries would be just over 2 million liters.
Then passenger imports from Estonia would be 11.84 million liters of pure alcohol, and not 3.9 million as the THL study would suggest.
The passenger import numbers still exclude much of the almost 500,000 car trips that Finns make abroad according to the Finnish Automobile Association's barometer. Some of the trips are included in Estonia's figures, but at least 70% are directed to other parts of Europe. It is probably clear that the passenger import per person is larger than that from Tallinn, because car travellers do not have to carry their own drinks. A good estimate would be the annual consumption, because the more they bring, the larger the share of the trip price is paid for by the cheaper price of alcohol. In any case, it is several million liters.
In addition, it is worth noting that 80% of the customers of the Swedish monopoly in the border town Haparanda are Finnish, so we are talking about the consumption of about 80,000 Finns, probably more than a million liters of 100% alcohol.
Regarding online shopping, the THL study is even more wrong. The presentation says that they reached a little over 60 people throughout the year who said they had bought alcohol online in the previous two weeks, so each data point is based on the answers of 2-3 people. How can you even publish something like that as official statistics? It would, however, be a convenient way, if the ambition would be to misguide the Parliament into believing that ALKO’s market share is relevant.
Fortunately, the online shopping professional, Paytrail, conducts an annual online shopping survey, to which no one has any reason to answer incorrectly. It shows that 5% of the more than 2,600 respondents had purchased alcohol in the previous month, and that its value was 2% of all online purchases. According to Statistics Finland, this is the same share as alcohol's share of household consumption expenditure, when housing costs are ignored, so the share is credible. According to a study conducted by Taloustutkimus in 2022, 10% of respondents had purchased alcohol from a foreign online store during the past year, so Paytrail's figures are also more credible in this respect than THL’s. In Sweden, an average of 4% have purchased alcohol online in the previous month, according to a study by Svensk Handel, which is in line with Paytrail and Taloustutkimus.
According to the Bank of Finland, Finns buy online for 11.8 billion euros, so the share of alcohol would be around 240 million, which would mean around 5 million liters of 100% alcohol. The Customs also published a press release, according to which Finns in 2021 bought 33 million litres from foreign online shops, which translates into 3 million litres of 100% alcohol.
Based on the above, it is clear that Finns buy about 30 million liters of pure alcohol from abroad, i.e. almost as much as from Finland. The incentives provided by alcohol policy for this are considerable.
The basic pillars of the Finnish alcohol policy, limiting availability and high taxes, encourage hoarding, drive consumption, encourage polysubstance use, weaken traffic safety and direct almost half of Finnish purchases abroad
According to Sotkanet, the harms of alcohol are greatest where there are the fewest ALKO stores in relation to the area. For example, in Uusimaa, there are 20 times as many ALKO stores and 40 times as many restaurants serving alcohol per square kilometer as in Kainuu, in addition to the proximity to the much cheaper prices in Tallinn, but still the harms in Kainuu are 30% higher.
This is due to the well known FOMO effect. When you have to go far to shop, you buy more just to be on the safe side. For most people it doesn't matter, but those with a drinking problem might drink all at once, which results in serious drunk driving and violence.
When 8% drinks came to stores and availability improved significantly in these areas, sales of spirits fell the most in those areas, according to statistics from ALKO.
According to studies, polysubstance users largely live on social security, so they have to obtain their intoxication cost-effectively. The higher the taxes, the more attractive it is to use medicines and drugs as well. Finland is the clear number one in the EU in alcohol taxes, amphetamines and non-prescription medicines, and third in prescription medicines. This is also reflected in traffic, where the proportion of polysubstance users is constantly increasing according to the police, and they deviate from traditional drunk drivers by driving around the clock and also in urban areas.
The public health status of ALKO
According to Valvira, 34.6 million liters of 100% alcohol were sold in Finland in 2024. ALKO's share of this was 12.3 million liters. The share is steadily decreasing, and in January-February 2025 it was 35.6% of the alcohol sold in Finland.
Based on the above data and credible studies, only a fair half of the alcohol that Finns consume is sold in Finland. Therefore, ALKO's share of consumption was only about 19.7% in 2024, and the share is decreasing steadily and reasonably quickly. It would be naive to claim that such a share would be of essential importance in terms of public health. At the same time, it is clear that the EU legal basis for the monopoly is long since lost, in practice when Estonia joined the EU.
ALKO is a diligent marketer on social media. A very large part of their advertisements are used to increase consumption, especially among women and young people, for example as tips for organizing successful parties using alcohol and punch recipes, which does not really correspond to the purpose of Section 1 or Section 50 of the Alcohol Act. On the other hand, I was unable to find a single advertisement that urged people to drink less, but better, or taught middle-aged men to combine wine and food. After Rikhard Sjöberg pointed this out on the X service, ALKO removed 17 of the 67 advertisements that ALKO had published during the beginning of the year. So they did not only remove them from the users' view, but completely from the system. Fortunately, I expected exactly that reaction, and stored them.
ALKO's selection does not indicate that public health is any kind of priority. When comparing the sale-to-order selection maintained by importers to the standard selection chosen by ALKO and especially to the wines that ALKO stocks in almost all of its stores, the result is at least confusing in terms of sugar content:
- Red wines: average 2.35 g/l in the custom selection, 3.29 g/l in the standard selection and 6.69 g/l in the wines found everywhere
- White wines: average 5.47 g/l in the custom selection, 6.17 g/l in the standard selection and 10.80 g/l in the wines found everywhere
- Sparkling wines and champagnes: average 8.66 g/l in the custom selection, 13.85 g/l in the standard selection and 18.08 g/l in the wines found everywhere
- Rose wines: average 2.85 g/l in the custom selection, 6.24 g/l in the standard selection and 12.25 g/l in the wines found everywhere
For some reason, ALKO has decided to use its monopoly to teach Finns to consume over-sweetened wines. In the countries of origin of the wines, hardly anyone would consider these wines to be food drinks, because sugar quickly numbs the tongue and masks the taste of food.
To get an impartial and scientific perspective on this activity, I contacted the Karolinska Institutet's substance abuse researchers, who offered an interesting perspective: When researchers want to make rodents addicted to alcohol, they start with a sweet and low-alcohol liquid, and gradually increase the amount of alcohol while decreasing the amount of sugar. They also stated that sugar has no effect on problem users, but it does have an effect on the habituation of new users.
ALKO and Sweden's Systembolaget are the world's leading players in boxed wines, with a share of 35% of liter sales in Finland. In these, the price per liter is often clearly cheaper, and it is more difficult to control consumption when you can't see how much of the package has been used. According to a Swedish report, users of boxed wines drink 50% more than those who drink bottled wine.
ALKO does not act non-discriminatory, although Section 25 of the Alcohol Act requires it
According to its price list, ALKO has over 500 wine suppliers, but four stand out strongly from the rest. These four have 36% of the listings, 48% of the 128 products that have been listed since last century, 49% of the store availability and 57% of the sales. According to the web site, the standard selection products were found in an average of 82 stores, but these suppliers' products have an average of 120, 116, 114 and 103 stores.
The same phenomenon also occurs with manufacturers. Certain manufacturers receive a completely disproportionate share of the listings in a certain country or region. The worst examples are a manufacturer with 21.8% of Portuguese listings and 48% of sales, a manufacturer with 19% of South African listings and 28% of sales and a manufacturer with 15.5% of Chilean listings and 29% of sales. Similar, but less blatant examples can be found in Catalunya, Pfalz and Piemonte, for example. What these have in common is that the manufacturers are large factories that do not stand out in terms of quality in any way according to Vivino's millions of impartial evaluators. It seems obvious that Alko wants to make certain brands known to Finns for the post-monopoly era. Understandable, but illegal.
This has been made possible by ALKO's completely opaque operations in both product selection and store availability. The criteria in the tenders are very vague, allowing ALKO to pick any product it wants. The same goes for the description of the selection process. The criteria for selecting a certain product are not even disclosed to the participants, and an appeal requires the supplier to request a reasoned decision on the selection. Opacity also ensures that suppliers do not dare to appeal their decisions. Small suppliers win more special lots, which means they receive some income, and therefore they also have something to lose.
Based on the above, it is not surprising that Valvira did not receive a single appeal in the years 2013-2023, even though 100,000 offers were made to ALKO. For comparison, the complaint rate for public procurement in Finland is 2%.
Alko publishes product-specific sales only on its supplier portal, and only to suppliers who have entered into an agreement containing confidentiality clauses. If a supplier has a retail license in Finland or an ownership link to an online store that also sells to Finland, they will be blocked from sales data.
ALKO clearly discriminates against suppliers from other Member States. Of the standard selection in wines, only a little over 12% of the listings and only a little over 7% of the store availability is for products from foreign suppliers. They are de facto blocking a lot of products from 80% of the market based on origin. For instance, only 111 of the 360 AOCs in France and only 124 of the 408 DOC/DOCG/DOP areas in Italy are present in the standard selection. EU wine countries like Cyprus, Malta and Romania do not have even any wine there.
Looking at the purchase plans for 2022-24 strengthens the impression. Of the 147 wine tenders 91% have a single country of origin as criteria. In 35% of the tenders wines from EU were not allowed. 59% were dedicated to seven countries in the EU: Italy, France, Spain, Germany, Portugal, Austria and Hungary. The rest of the Member States were left to compete for 4% with the whole world and 2% with the entire EU, in total 9 tenders.
The sale-to-order selection is promoted as an alternative route to the Finnish market. However, that selection is only 2,5% of the sales and 3,5% of the store availability, and both of those are heavily focused on a few products. Only 1,5% of the 3500+ products listed are available in at least 20 stores, which is the minimum for being transferred to the standard selection, so it comes as no surprise that the median sales for these products is 750 euro, which does not even cover the costs. Also here ALKO discriminates against foreign suppliers, by only allowing suppliers that have a license, are registered and have a warehouse in Finland.
ALKO takes its lack of transparency so seriously that it hired an emeritus professor to oppose the Deputy Parliamentary Ombudsman's self-evident position that the operation of a national monopoly is comparable with a public administrative task.
The comparison with Sweden is not in Finland's favor. Systembolaget's 4 largest wine suppliers account for 34% of sales, or just over half of Finland's equivalent. Sales statistics are completely freely displayed. Product scores are given for selections, and Alkoholsortmentsnämnden receives about 10 complaints annually.
In addition to the discrimination carried out by ALKO itself, its mere existence causes discrimination. A 2005 Nielsen study showed that ALKO's impact on the transfer of purchasing power from stores without an ALKO beside it to one with it in the grocery trade is 5.5% - 8.1%.
According to the Finnish Grocery Store Association, 43% of purchases are made on weekends. In rural areas, a large part of this flows to the cities, as people have to go to ALKO anyway. If food wines could be obtained from the grocery store, it would mean an increase of up to 50% in sales in rural stores, which would be a decisive improvement in their viability.
Supervision of ALKO is non-existent
According to the Deputy Parliaments Ombudsman's statement from 2023, “the action plan for reducing harm and the annual report submitted to the Ministry of Social Affairs and Health on the measures with which the company has sought to reduce the harm referred to in Section 1 appear very limited” and “I also consider it a shortcoming that the narrowly presented action plan or action report does not, for example, clearly indicate whether the measures taken are based on research and how their effectiveness has been monitored or studied”. She reminds the Ministry “that reducing alcohol-related harm is a statutory task that is of central importance to the company's legal status, both in terms of national and Union law”. She goes on proposing the Ministry of Social Affairs and Health ”to take the steps it deems necessary to clarify the regulation regarding the public administrative duties of alcohol companies in the Alcohol Act”. Almost two years later, nothing has happened, and no actions are proposed in this proposal either.
The observations listed in this statement have been reasonably easily available, although ALKO itself categorically refused to provide any information.
From the outside, it appears that the supervisors are more focused on fanning ALKO and protecting it from competition or compliance requirements than on oversight, which has been left to private volunteers.
Even more worrying than the lack of oversight, however, is the fact that at least some senior officials seem to feel they have some higher mission, which justifies illegal actions to achieve their goals. A few examples:
- A leading Ministry of Social Affairs and Health official told Parliament in 2017 that “The current distance selling ban has therefore already been found to be legal in a national court under the authority of the ECJ”, even though there was and cannot be any such ban, and the case in question did not even concern typical distance selling
- A leading Ministry of Social Affairs and Health official stated in an evening newspaper in 2018 that “Now criminal proceedings will be initiated against distance sellers of alcohol” and “When the investigations begin, the wise will stop selling immediately and fold their arms”, i.e. he threatened perfectly legal business operators to cease their business activities
- At the initiative of the Ministry of Social Affairs and Health, Valvira filed a request for investigation against ten distance sellers, claiming that paying the taxes to Finland would make it illegal. The investigation of course led to nothing, but Finnish owners in particular suffered for years without legal justification. At least one of these companies gave up distance selling and subsequently went bankrupt.
- In his first EU Pilot response in 2021, a senior Ministry of Social Affairs and Health official stated about Valvira’s guideline that “The guideline, which is otherwise not legally binding, has thus not legally implemented any prohibition or concretely prevented the activities of sellers established in other Member States”, He fails to mention the requests for investigation made into distance sellers and the fact that the guideline was used as evidence by the prosecutor in the ongoing Vironviina Court proceedings. Finland is bound by the principle of sincere cooperation, and such actions are as far from sincere as can be
- In their statements to the State Treasury regarding compensation for damages caused by the claimed distance sales ban, both the Ministry of Social Affairs and Health and Valvira dispute the grounds, citing the Alcohol Act, even though the applications refer to binding ECJ precedents, according to which Finnish law does not apply and the Finnish authorities have no jurisdiction in the matter.
All this despite the fact that officials from the Ministry of Social Affairs and Health and Valvira's predecessor, STTV, stated already in 2001 that Finnish law does not apply to distance selling. Unfortunately, the same attitude towards EU legislation on alcohol matters seems to have spread to other authorities as well. ALKO seems like something untouchable, which justifies breaching clear EU regulations.
As an example, Tax requested all cross-border transactions for 2015-2021 from the banks in order to track all ecommerce, and especially distance sales of alcohol. This is of course a major breach of privacy, as the Data Protection Ombudsman stated. The data was then used to identify sellers and buyers in a campaign that Tax ran together with Customs to block distance sales of alcohol from other Member states. 5200 shipments were stopped, which is quite questionable, as they were the property of the buyers, who have no way of verifying if taxes were paid or not. Distance sales dropped by 60% according to a press release from Customs. No similar actions were taken against domestic actors.
Another example is the National Treasury of Finland handling claims for compensation during 2022-25 for damages resulting from the claimed distance sales ban. The application showed that there was no ban in the Finnish law, and that such a ban would be impossible, referring to EU case law (Rosengren, Commission vs Sweden, CIA Security, later complemented with Google Ireland, Airbnb Ireland, Ker-Optika, Dassonville, eDate Advertising, Pohjanri, Francovich, AGC Cos-Met). Instead of verifying the Case Law, they just asked the Ministry and Valvira about the claims, even though the claim referred to Case Law showing neither they nor Finnish law had any jurisdiction. Both of course repeated their law-breaching position, and the treasury denied the compensation based on that. Especially troublesome is that the current Director General personally upheld the decision, even after she was personally informed about the ecommerce directive and the Case Law mentioned above. Despite repeated references to new rulings by ECJ, the detailed opinion from December, and despite Sections 23 and 50 of the Finnish Administrative Procedure Act requiring them to correct their decisions without delay if new, and in this case binding legal information is presented. Instead they forecast to handle the case in two years.
Tax losses from distance selling are mainly theoretical
A person who consumes two bottles of spirits a week earns 960 euros a year when buying it with Estonian taxes. If a person consumes 24 bottles of beer a week, he earns 700 euros. If buying them online using Estonian taxes is prevented, it goes without saying that he will go and get it in person from Estonia. It is utopian to think that he would start paying the current Finnish taxes.
The tax benefits and the volume of online shopping are so great that it is a miracle if someone does not set up a service point in the port of Tallinn where Finns can send their online purchases, and then go and get them into Finland as passenger imports.
If you look at it from the perspective of a small winery, the problem is different. It sells mainly to those who happen to visit it, often even at the same time. The current model where they would have to register in advance in each member state and report regularly just in case someone from each country might visit and might want to order something home is of course utopian, as is the fact that they would log in twice to the portals of all the Member States, first to place a 20 euro deposit, and then to pay it. A typical small farm would sell an average of 200-300 bottles to Finland, and there are tens of thousands of such farms, so collecting excise duty with the current model would be very expensive.
Excise duty is different in nature from VAT, because most sending countries do not collect it and therefore do not prioritize investments in its management. The EU Excise Contact Group has a proposal in which recipient countries would use the data from the Excise Products Transfer System, ECMS, to determine the tax and request payment using SEPA. This would eliminate a huge amount of unnecessary bureaucracy, and would make collecting taxes from random sellers much easier for all parties. Finland should support this initiative.
Influencer Marketing
As shown above, the operation of ALKO is highly discriminatory, and small manufacturers have little opportunity to get listed, except for short-term special batches. For them, influencer marketing is the only way to gain visibility in the Finnish market.
As the LVM states in its statement, a possible ban would only apply to operators based in Finland, and it would be very easy to circumvent. In addition, young people mainly follow international influencers anyway.
Summary
The European Court of Justice ruled on the legality of distance selling as early as 1974 in the Dassonville case, which prohibits Finland from hindering intra-EU trade in any way, for example by requiring licenses from actors based in other Member States, directly or indirectly. In 2007, the Court confirmed in the Rosengren case, that the decision is valid even if the buyer's country has a national alcohol retail monopoly. Finland has been bound by those decisions since joining the European Union. It remains for the Finnish Parliament to decide whether operators based in Finland can also engage in distance selling, as they should of course be allowed to do.
It is undeniable that alcohol causes harm. It is much harder to find grounds that can withstand critical scrutiny for the claim that a national monopoly would reduce harm. If a monopoly really would reduce harm, Finland would have a monopoly on sweets and even food, because obesity is a much greater challenge to public health than alcohol.
In a closed country like North Korea or an island nation like Iceland, limited access and high taxation might work, but not in the EU of free movement. Here the effect has been the opposite. A huge amount of Finnish purchasing power has been diverted abroad, hoarding has been encouraged, which has increased consumption, and it has been worthwhile for the most vulnerable to switch to polysubstance use. The irony is that due to high taxation, Finland drinks the lowest quality wine on the market, the taste of which is covered with sugar, all in the name of public health.
If we truly want to limit availability, it is worth removing all reasons to hoard drinks at home, whether from abroad or from a distant store. It is clearly easier to drink a bottle already at home than one that is still in the store. The collapse in sales of spirits due to the 8% liberalization and the tenfold increase in availability confirms this.
The Finnish people have already decided on the public health status of ALKO on behalf of the Government and Parliament, just as they did with NATO. The share of ALKO in the alcohol consumed by Finns is less than 20%, and it is falling rapidly. When people have an alternative way to get alcohol, people use it. The figures are indisputable, so the existence of ALKO has little significance for public health, even if it would try.
Conclusion
A retail monopoly is such a big exception to the fundamentals of the European Union and the Internal market, the free movement, and to the freedom of its citizens, that its legal foundation should be evaluated regularly:
- Is its share of the consumption big enough to have any real impact on public health?
- Is it taking measurable and scientifically backed actions to limit consumption?
- Does it have the backing of the citizens of the country?
- Does it operate in an impartial, transparent and compliant way?
- Do the authorities supervising it operate in an impartial, transparent and compliant way?
Based on the above data and documentation, the answers to all of these questions regarding ALKO is a definite NO.
ALKO is such a disproportionate root cause to Finnish breaches of European law, that it is embarrassing, both for the EU and for Finland. It is clearly in the DNA of both the monopoly and those supposed to supervise it that they are above the law. Valvira, Ministry of Social Affairs and Health, Regional State Administrative Agency, Customs, Tax, National Treasury - the list of authorities refusing to comply is stunning. It is not about regular officials, it is the top management of these institutions that refuse. A significant part of Parliament is led to believe that they can decide on the legality of distance sales from other countries. Even the highest supervisors of Legality, the Chancellor of Justice and the Parliamentary Ombudsman are reluctant to intervene in the actions of the monopoly, and just stated that the Finnish law is unclear.
The breach in question is not a temporary failure to comply, it is a systematic ignorance that has been going on since the beginning of 2007. Despite several ECJ rulings, like Rosengren, Commission vs Sweden and Google Ireland, three detailed opinions, at least four Pilot letters and countless complaints to both Finnish authorities and the EC, it still continues. It is clear that the Finnish administration can not and will not handle the monopoly in a compliant way, but there will be new ‘citizen guides’ and other actions trying to protect the monopoly.
Complying with the detailed opinion of the Commission and the ecommerce directive would have been very simple, just adding an article stating “The regulations of this law only applies to actors based in Finland”. Instead the officials decided to further obfuscate the law, adding things like delivery license or supervision rights to Valvira to be able to de facto hinder the distance sales also in the future.
From an economical point of view, the effects are huge. The obvious part is of course access to the 2 billion euro Finnish alcohol market. From an Internal Market perspective, The National Treasury damage case is more important. It destroyed an international platform with the capability of helping thousands of small wineries sell wines for billions of euros directly to wine lovers at much more favorable conditions than through the traditional channel. The platform would have been a showcase of the power of the Internal market to millions of EU citizens typically not benefitting from it directly.
It is clearly time to end the monopoly. Besides the monopoly having no positive impact on national health, all the criteria of the Hanner ruling (C-438/02) applies to the monopoly and the authorities protecting it. It is also time to remind Finland that the Francovich case (C-6/90 and C-9/90) is legally binding for Finland.
