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Archive for the ‘European Union’ Category

It used to be more easy. When I was young, everything was black or white. I won’t claim more wisdom now, but at least I have rubbed off some edges, most of them probably for the better.

But my reflexes are more or less the same. I have no love for monopolies – public or private. This means I have never applauded the Nordic way of organising alcohol retail sales in governmental monopoly retail stores, either.  But a recent briefing at the headquarters of Swedish Systembolaget made me think things through.

Four of the Nordic countries have these governmental shops, Finland (Alko), Sweden (Systembolaget), Norway (Vinmonopolet) and Iceland (Vínbúðin). Finland and Norway allowed the sales of beer (and alcopops) below 4.75 % ABV in supermarkets, In Sweden and Iceland the limit is lower. This makes a significant difference: In Sweden, the bulk of pale lagers is sold in Systembolaget shops, in Norway, the bulk is sold in supermarkets.

Things are slowly changing. There used to be monopolies of imports, wholesale and distilling, too, but they are history, largely do to European legislation. The retail stores used to be forbidding places with long lines outside the front doors and all bottles being hidden on shelves behind the counter. The strict Lutheran view of this being the devil’s dring hung like a dark cloud over the shops. There is one, frozen in time, at Norsk Folkemuseum in Oslo if you want to have a look.

The public health concerns are the same as they used to be, but the drinking habits have changed. We drink less hard liquor and more wine, the pale lagers are stagnating while craft beer has an impressive growth.

And the monopolies are adapting. Bright and cheerful stores with the full stock on display. Special release days for rare wine and beer. Apps for your smart phone. And while you won’t find any promotional material as such in a Systembolaget shop, the bottles, boxes, cans and wrappings for the six-packs do the job.

In theory, you could argue that the Norwegian threshold of 4.75% means there is a better choice of everyday beers for the consumer. But that is not the case. We have four supermarket groups controlling 98% of the grocery market, and, while there are some shops who are now jumping on the beer bandwagon, the range available is limited to about one hundred beers in the very best shops. Three quarters of these will be pale lagers, for Christmas some of them will have som caramel coloring added.

Sure, there are huge stacks of canned lagers in the Swedish shops, too, but the best of the shops have a large number of fine ales prominently displayed. And if you don’t find your favourites in your local shop, you can order them from the web site and have them in a week or so.

Sure, you might argue, but what’s the option for those who live out in the sticks and don’t have a Systembolaget store in the neighbourhood? Simple, there is a large network of grocery stores who act as agents or ombud and where you can pick up your order. Like the post offices who pop up as shop within a shop nowadays.

One major difference between Norway and Sweden is that the Swedish model is put under strong external pressure. As European Union citizens, the Swedes are free to bring home alcohol bought in other EU countries cor their own consumption. That means cheap booze from Denmark, Germany and Poland. Which means that Systembolaget have been forced to give a better shopping experience, better service – and to keep their prices down. Sur, they cannot underbid the prices of Polish vodka. But they can make sure that you can get a six-pack of lager for an affordable price without getting on a ferry. That means the price level in Sweden is often between thirty and seventy per cent of the prices in Norway for beer and wine. A decent can or bottle of BrewDog beer will typically be ten Norwegian kroner at Systembolaget but close to thirty in a Norwegian supermarket. Going into how we end up with this difference is a blog post of its own.

So. Accessibility and price are two factors which make the Swedes smile all the way to the shop and back. But it’s also a matter of quality.

When we visited Systembolaget HQ, we were attending a simulation on how they conduct their product testing.

Their buyers try to follow the trends in the beer world, to stock Swedish beers and imports, to try to have a sensible mix of beer types, price levels etc. The beers that sell well get to keep their place on the shelves, others are replaced. And there is a steady flow of calls for tender, stating the type of beer, possibly area of origin and stating something about the price level, say, 15-20 Swedish kroner for a half liter bottle. Depending on the product, importers and wholesalers then give a quote and send a certain number of samples. The labels will be checked, the price will be considered, and, for a number of beers, they will be tested blind. Our simulation was related to a call for German Kristallweisse, and, as two of the six samples were unfiltered, the test in not flavour alone, several senses come into play.

The tastings take place in laboratory conditions, and the tasting teams spend a lot of time calibrating themselves, trying to avoid personal preferences and arriving at a common standard of quality that is appropriate for the beer in question.

Tasting at Systembolaget

This is serious business. We are talking about the biggest retail chain in the world in this sector, if I’m not completely mistaken. And while there might be various views from the suppliers on how the system might be tweaked to be better and more fair, there does not seem to ba any loud voices asking for major reforms. Sure, there are discussions on how to allow farms to sell their beer and wine, and small-scale brewers might  want better access to shops in their area than the present system that guarantees them shelf space in the three shops closest to the brewery.

Is there a conclusion to this?

If you want to give the public good access to a splendid range of quality products at affordable prices, this makes sense. Sure, I love Ølbutikken, Johnny’s Off Licence and all the other speciality shops across Europe. But that is for a tiny crowd of aficionados. And a quality system that avoids the worst of the crap makes sense, too.

But I leave this open. I cannot praise a monopoly. But almost….

BTW, the visit to Systembolaget was a part of the annual meeting of the Scandinavian Beer Writers Association. A great bunch.

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Lovely blog post at the Wall Street Journal about the Brewers of Europe, who try to send a message to the European legislators about beer being convival.

Huh?

So the message is that “convivial” drinking occupies a middle ground somewhere between not drinking at all and drinking so much that you collapse on the street in a pool of your own vomit. It’s about drinking with family and friends, not downing beer after beer by yourself in your basement.

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According to the Norwegian delegation to the European Union, who refers to the subscription web site Europolitics, the ban on bottles containing more than 100 ml of liquids will be prolonged. 

Current legislation has a ban until 29 April next year, but, according to a draft presented by the Commission to the Council earlier this month, it will be prolonged until April 2013. By then they hope to have developed scanning machines allowing liquids on board, be it beer, shaving foam or water. 

But I would not be holding my breath. Bubble wrap will probably be a life long companion. 

This is obviously an issue the Commission doesn’t wants any fuss about. I love the Europolitics wording: 

It is with the utmost discretion that the European Commission presented to the Council of Ministers, on 2 December, a draft regulation…. 

To drink here or to take away?

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Heavy load

Heavy load

Norwegian newspaper Aftenposten tries a new angle – this time it is not Norwegians stocking up on beer, wine and stronger stuff in Sweden. It’s Swedes doing the same in Germany.

Expensive toll bridges, petrol and ferries means they have to buy quite a lot for this to be profitable. But they do. Legally.

The European Union has large quotas for alcohol. And if you can convince the customs officers its for personal use, the sky is the limit. Or, more precisely, your car.

While the beer list is not remarkable in scope, with those prices there are temptations for everyone. I wouldn’t mind paying 3.75 € for a 75 cl bottle of Duvel. But if you look at the promotional flyers on their web page, most customers go for Danish or Swedish beers to take back home. Not the most green way to arrange things….

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Beverage Daily has started a series where they are looking into the potential of craft beer in various markets in Europe. I haven’t had the time to analyze this properly, but it seems to me to be some confusion concerning terms here. Using a local or regional brand name does not necessarily mean craft.

I’ll come back to this when they publish further articles in the series, but it seems to me that the beer industry organisation Brewers of Europe tries to cover up what is a very basic conflict of interest – between the global players and the genuine craft breweries.

The BOE says that while small brewers can provide a good image of quality local products, big brewers can play up their reputation on a much more global basis, ensuring there was no interest in competing with the smaller brands.

If you want to produce and sell a billion liters of Heineken, you would want to compete with any brand, large or small.

A real small scale brewer

A real small scale brewer

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Some days ago, I was in a queue. With Norway being one of the few European countries not yet a member of the EU, we still have duty free sales at Oslo airport. (No, I was just buying a deodorant. The beer selection is awful. I have tried to discuss it with them, but with no success!)

The man in front of me was a guy who shouldcount as a celebrity in these parts, former Prime Minster of Sweden, Göran Persson. He had no intention of buying large quantities of booze, but had picked a bottle of gin and a bottle of port from the well assorted shelves.

Martin Olsson, form Wikipedia Commons

Photo: Martin Olsson, from Wikipedia Commons

The cashier, a girl aged ca 22, gave him a scolding, telling him he had to choose between the two bottles, the duty free allowance for Sweden being only one bottle of alcohol above 20% alcohol by volume. He handed over the port and paid for the gin with his credit card.

-May I see your ID, please?

He showed her his ID card without any fuss and went on towards his Stockholm flight.

A few points:

  • The days of Norwegians watching Swedish TV channels are definitely over.
  • Even if Mr. Persson is married to the Director of the Swedish alcohol monopoly Systembolaget, he still has to buy his own booze. That’s Scandinavia in a nutshell.

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The Brewers of Sweden should be very happy.

Their beer exports are up 44 per cent for the first eight months of 2008. But this is an example of needing to look beneath the surface.
In the same press release giving the positive figures, their CEO points out that this is not the result of Swedish beer conquering foreign markets. No, most of the beers end up in the border shops in Germany.

What kind of shops are we talking about ? For decades there have been warehouse-like no frills shops in Northern Germany, usually within spitting distance of the Danish border or a ferry terminal. You can buy a few discount food items here, but the main focus is on cheap booze. Wine and hard liquor, sure, but the main thing has been beer. Hard discount German brands are available, but their most prominent lines have been Danish beers. Domestic policies in Denmark used to ban canned beer, though there was en exception when it came to beers for export.
In Denmark you consume beer in large quantities, so within a few years, a significant part of the beer was sent to Germany just to be picked up by Danish shoppers on day trips. Large parts of Denmark are within a few hours drive from the border, the quotas age generous, and while the savings were not enormous, the satisfaction of saving a few kroner in taxes seemed to eclipse the price of petrol or ferry tickets.
 
It has taken some time, but now the market has reacted to the price gap between Germany and Sweden. The consumers are not content with the Danish prices, they drive a few hours extra to get their booze even cheaper. The Swedish Brewers are no longer content with watching their market disappear, and they have done a sensible move to get back some of their share.
 
There are reasons for Sweden (and Norway) having strict alcohol laws and high taxes, and the temperance movement still has a grip on both political parties and the government apparatus.
At the same time, it is time to face that we live in an age where people move around in large numbers. Thousands of people commute across the borders in Scandinavia. The Øresund bridge between Malmö and Copenhagen means that the two cities have, for may purposes, merged. It is blue eyed to believe that you can continue your domestic policies as if nothing has happened. It is even more blue eyed to think you can increase the difference – the Swedish beer taxes will be increasing next year. A 50 cl can costs less then 4 Swedish kroner in Germany, more than 10 in Sweden. No wonder they buy in bulk quantities and that the black market is growing.

The politicians can dream about the good old days when domestic policies were decided at home. Well, it is time to wake up. And one thing is for sure – there are no politicians who dare to propose a tenfold increase in customs and police staff at the borders. We need to have open borders for people to go on with their legitimate daily lives. That means, in the long run, we have to adjust. Or, obviously, we can breed a mafia specializing in smuggling consumer goods which are legal in other contexts. You can be sure that they will use the network for more dubious goods as well.

I don’t usually spend much time whining about the prices of the cheapest canned lager. But this has implications for the high end of the beer market, too.  And at a time when all politicians left, right and center are competing to be the greenest, having policies where breweries truck their beers over several borders just for the consumers to drive the same way to bring them back again makes very little sense. But maybe it’s just me not getting the point.

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T-shirt in Glasgow

When I look at the map, I have covered a fair number of countries since I started blogging. 23, to be exact, and that means 23 countries I have visited in this three year period.

Norway, Sweden, Denmark, Finland, Latvia, Ireland, Scotland, England (yes, I count England, even if they don’t have their own parliament!), Wales, France, the Netherlands, Belgium, Spain, Italy, Switzerland, Germany, Austria, Slovakia, the Czech Republic, Bulgaria, Greece, Hungary and Cyprus.

Some of them, admittedly, for only a brief stay, but others where I have been able to go deeper into the beery heart of the nation.

Should I pick six of them as beer destinations?

Denmark, the Czech Republic, Germany, Scotland, England, Belgium and the Netherlands. Sorry, that’s seven. But they would make a mighty fine tour of Europe.

A general word of advice is to go for the brewpubs. The beer is fresher, the barmen know more about what they sell, there is more enthusiasm. I’ll give you my top ten some time.

Croatia is coming up, if I’m lucky with a side trip to Slovenia, but I don’t think they will make the core list.

There are still glaring white spots on my map of Europe, including Poland, Portugal and Russia. But there are also other continents to consider….

Beer in Sofia

Beer in Sofia

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The inventiveness of merchants and governments across Europe has led to many strange price differences between neighbouring countries. Sugar, petrol, vodka, wine – the list is endless. The European Union has led to some harmonisation, but you still have lots of Danes going to Germany to shop, not to mention Brits going across to France.

National governments have some tough decisions to make. Finland has lowered the prices of hard liquor to avoid to much border trade with Estonia and Russia. The result is a paradise for hard drinkers, and even a casual observer can see the damages.

I spent a few years of my life in the employ of the Royal Ministry of Foreign Affairs, trying to convince the Norwegian electorate that the Maastricht Treatywas Good For Them. As everyone knows, they were not amused, and massive oil wealth has meant that we can buy ourselves out of any problems arising from being on the outside.

Well, there is more to it than that, obviously. To be able to sell our salmon and oil, we have to open our markets for goods and services from the EU, and are quite content to do that. We could not possibly build our roads and hospitals without hired hands from Poland and the Baltic republics. We could not have our overpriced pint of Carlsberg lager without the Swedish waiters to serve them.

We adopt EU legislation, too, in fact we are more eager than most member states. We Nordics have a very Lutheran feeling of obligation towards legal committment, and this philosophy is prevailent in the government as well. Even parties who are extremely against European integration when they are in opposition accept the sitaution when they occupy the ministries.

But still. We are not a part of the EU agricultural policy, and we do not have open borders when it comes to alcohol, either. At the same time the border between Sweden and Norway is as open as the one between, say, Belgium and the Netherlands. People commute by road, rail and plane. Norwegians snap up holiday homes in Sweden. Goods travel freely across the border based on a trust in that serious businesses keep their papers in orders, and the customs officers process papers and conduct only spot checks.

This has led to the establishment of a number of shopping centres on the Swedish side. About one million people live within a driving distance of about an hour and a half. A significant number of those live even closer, and they are happy to buy their groceries at a 20-30% discount.

The most interesting shopping centres are the ones including a branch of the government alcohol stores Systembolaget, but when I visited last week, we did not have time for seeking out one of them, instead going for one of the stores right across the border.

The main purpose of our visit was to buy sweets for an birthday, and the size of the confectionery shop was overwhelming. We bought far more than we ought to, before descending on the supermarket next door.

One aspect of Swedish alcohol policy makes them the odd man out. Only beer with an alcohol content below 3,5% can be sold in supermarkets. This has, naturally, led to a vast range of beers balancing on that threshold. With a population of close to ten million, Sweden is an interesting market. This has mad many of the breweries across Europe to make  watered downspecial versions of their beers solely for Sweden. You have English bottled bitters, Bavarian hefeweissen, Austrian and Dutch lagers – even a low alcohol beer brewed by Borg, a Norwegian brewery just across the border who worry about their market escaping.

So, who are profiting on this boom in the border trade? Sure, a few Swedish farmers have had a bonanza. But most of the money goes back again. The shopping centres and supermarkets are actually owned and run by Norwegian companies.

And you don’t need to worry about the language problem. (Not that the difference is big). The cashier would be Norwegian as well, driving a few kilometers across to work.

The beer? thin and watery, though a few of them are in fact quite decent. You’ll need a shot of something stronger on the side to get a buzz, though. But these are fine lawnmower beers. At half the price of their full strength brethren on the other side of the border.

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Traceability is a buzz word for everything connected with food in Europe and, I believe, globally.  There are many reasons for this: 

  • Public and animal health,
  • Consumer confidence in food,
  • Varying degrees of honesty in the market place
  • Marketing opportunities (slow food, local food, spinning stories about the farmer or the brewer)
  • Governments and EU bodies’ wish to enforce legislation/taxation/control subsidies.

According to a report in Beverage Daily, the European Union has recently announced proposals for a new electronic system (EMCS) for manufacturers of products requiring excise duties. 

The measures can reduce losses and fraud during the transportation of products like alcoholic beverages, and simplify the current system of excise charges for beer.

Rodolphe de Looz-Corswarem, secretary general for the Brewers of Europe, welcomed the system, which he believes can simplify the administrative process for manufacturers and encourage greater trade of national beers in the bloc.
“We hope that Member States will finally enable consumers to benefit from the internal market for goods such as beer and approve the Commission proposal, where beer acquired for personal consumption is subject to taxes from the country of purchase,” he stated.  “In today’s world of online shopping, consumers in Europe should not be restricted as to where they order their favourite beer.”

If there is one thing that makes me wary, it is industry associations claiming to speak for the consumers….

On the other hand, beer drinkers across Europe will welcome measures making it easier to find out where their beers really come from. It will also make it easier for small scale brewers to show what is real craft beer and what is macro brewers sailing under a false flag.

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