European Integration and Nordic Alcohol Policies

Changes in Alcohol Controls and Consequences in Finland, Norway and Sweden, 1980-97

Harold D. Holder, Eckart Kühlhorn, Sturla Nordlund, Esa Österberg, Andres Romelsjö, Trygve Ugland

• Publisher: Routledge
• Year: 2019
• Print ISBN: 9781138335660
• eBook ISBN: 9780429812668
• Edition: 1
• Topic: Politics & International Relations
• Subtopic: Politics
• Index: Politics & International Relations

First published in 1998, this volume constitutes a fascinating analysis of the clash of the alcohol control systems of three Nordic countries – Finland, Norway and Sweden – with the free-market of the European Union. It examines of the impact of joining the EU and of remaining outside the trade area, providing a detailed review from a number of perspectives that will interest not only alcohol experts but all social scientists, along with all those interested in links and conflicts between public health interests, market forces and trade agreements. Topics discussed include national systems of alcohol production and distribution, taxation, retail prices, patterns of alcohol consumption, economic actors, social and health consequences and changes in attitudes to alcohol policy in the Nordic countries.

1 Background: History and Purpose of Nordic Alcohol Control Policies

The participation of Finland, Norway, and Sweden in the European Economic Area (EEA) since 1 January, 1994, and the membership of Finland and Sweden in the European Union (EU) since 1 January, 1995, have had a significant impact on the national alcohol control policies of these countries. We refer to alcohol control policy as national-level regulations and laws concerning the production, distribution, and retail sale of alcoholic beverages with the aim of promoting public health and safety as well as public order. Unlike other pre-1995 EU member countries, each of these Nordic countries has a long history of state control and state monopolies over much of alcohol production; of wholesale, import, and export; as well as alcohol retail sales in bars and restaurants (on-premise) and at stores for drinking elsewhere (off-premise) (see e.g., Bruun, 1973; Kortteinen, 1989; Kolstad, 1993). As a result of their decision to participate in the EEA, each country has abolished most of their former monopoly system. Only the off-premise retail monopoly for alcoholic beverages has remained.

The purpose of Finland, Norway, and Sweden’s national alcohol control policy was and still is to maintain a lower overall consumption of alcoholic beverages and lower levels of associated alcohol-related problems by reducing private profits and promotion of all aspects of alcohol, restricting retail access to alcohol, limiting personal imports of lower-cost alcohol from other countries, and maintaining high retail prices. The alcohol control policies of each of these countries have been markedly altered in the 1990s and will be further altered in the future. For example, EU membership for Finland and Sweden permits travellers to import larger amounts of wine and beer from other EU countries free of Finnish and Swedish domestic taxes. The amounts will likely increase in the coming years for all alcoholic beverages.

Changes in regulations and control of alcoholic beverages in these three Nordic countries illustrate how important regulatory instruments of individual nation states have been modified and undermined as a result of the search for economic integration in Europe. As a consequence, it is possible to identify signs of homogenisation in alcohol policies among the EEA member states and EU countries. In this instance, the erosion of the Nordic alcohol control policy represents a case study of the effects of a more active Europe on national policies and is, therefore, connected to the broader concept of Europeanisation (Olsen, 1995).

This book describes changes in alcohol control policies and practices, and their consequences, in Finland, Norway, and Sweden after formal association with the EU. Iceland, a fourth Nordic country with an alcohol monopoly system, is also a participant in the EEA, and its alcohol control policy has also undergone major change. However, Iceland’s geographical distance from Europe reduces the economic influences on personal imports of alcohol. Denmark, also a Nordic country, has been a member of the EU since 1973 and is unaffected by the current agreements which involve Finland, Iceland, Norway, and Sweden. Denmark has a more liberal policy about alcohol control and has never had an alcohol retail monopoly system.

Since Denmark has no history of monopoly alcohol control policy and because Iceland is a geographically isolated country, this book concentrates on Finland, Norway, and Sweden. These are three contiguous countries with similar histories of alcohol control policy and close geographical proximity to continental EU members. The book documents international negotiations concerning alcohol control policy, contemporary changes in the alcohol control systems in each of the three countries against the background of the alcohol control policy history, changes in alcohol consumption and its patterns in each country, the health and social problems that are related to clrinking, economic actors and institutions that contributed to changes in national alcohol control policy, and changes in public values and attitudes concerning alcohol sales and control. The book concludes with a summary and observations about the future.

Scope of the Changes

Throughout much of the 20th century, state alcohol monopolies over production, wholesale, import, export, and retail sales existed in Finland, Norway, and Sweden. Monopolies reduced private profit opportunity thus reducing marketing and promotion of alcohol. As long as the state held a monopoly over the full range of the alcohol system, incentives and motivation for private entrepreneurship were lower. In addition, monopolies eliminated price competition, therefore, maintenance of high retail prices was possible.

Only ten years ago such monopolies appeared unchangeable. For example, in January 1987, a conference jointly organised by the Finnish, Norwegian, and Swedish alcohol monopolies discussed the future of Nordic alcohol monopoly systems. Gabriel Romanus, Managing Director of Systembolaget, the Swedish alcohol retailing monopoly, stated that “it is good for people in our countries to realise that the idea of limiting the interest of private profit is not unique, but has gained acceptance in the home of free enterprise, Canada and the United States” (Romanus, 1988, p.5). In his paper given at this conference, Klaus Mäkelä, Head of the Finnish Foundation for Alcohol Studies, concluded that “for the time being, it is difficult to envisage a shattering of the position of the Nordic monopolies, but the historical forces that gave birth to the monopolies are waning” (Mäkelä, 1988, p.58). And, in the conference report, Stein Berg (1988), General Director of the Norwegian National Directorate for the Prevention of Alcohol and Drug Problems, summarised the conference discussion by noting threats to monopolies including:

1. Private economic interests such as producers, agents, and breweries representing alcoholic beverages for wholesale, distribution, and advertising would like to take over those sectors that provide the easiest profit.
2. Strikes in the sectors of production and distribution within the alcohol monopolies are inducements to those in favour of reducing or eliminating them.
3. Restauranteurs would like to privatise both the importation and part of the distribution of alcoholic beverages.
4. Home production of wine and spirits weakens restrictions on alcohol availability.
5. The media often support liberalisation of alcohol regulations. Attacks against the alcohol control policy in the press appear on the front page while the defence for it ends up inside the paper.

During this conference, European integration was not even mentioned as a potential threat to the monopoly systems. Yet ten years later, only off-premise retail alcohol monopolies remain in the Nordic countries and are themselves under attack. For example, the question of the Swedish retail monopoly’s compatibility with EU law has been brought before the European Court of Justice, based upon a challenge to the Swedish retail monopoly by a shopkeeper who attempted to sell wine in his grocery store by referring to the principle of free movement of goods within the EU. The Danish Advocate General, Michael B. Elmer, in his opinion delivered in March 1997 to the Court, concluded that the Swedish off-premise retail monopoly was incompatible with European Community (EC) law. In October 1997, however, the European Court of Justice held that the Swedish retail monopoly was compatible with the EC Treaty.

Such challenges and transformation of the monopoly systems during the 1990s illustrate two important aspects. First, the process of European integration is relevant to the development of Nordic alcohol control policies. Second, integration has occurred with a suddenness that could not be envisaged ten years ago in the Nordic countries.

The influences of European economic integration on Nordic alcohol control policy have not been straightforward, and their direction has not been one-way, from EU to Nordic countries only. In fact, domestic actors in the Nordic alcohol field have lobbied the EU bureaucracy and used European integration as an argument for changes basically motivated by national, commercial, or industrial goals. Furthermore, within each country political and social pressures to change alcohol control policy were growing even before European integration was on the horizon. Over time, changes in the power structure concerning alcohol control policy have strengthened the private alcohol sector and increased its ability to use the EU association as an argument against existing control policy. Therefore, to get a complete picture of the entire process of changes in alcohol control policy, one has to go back at least to the mid-1980s, to the time before European integration began to affect the Nordic alcohol control systems.

When discussing the influences of the European integration on Nordic alcohol control systems, it is important to bear in mind that Finland and Sweden have been full members of EU since 1 January, 1995, whereas four Nordic countries, Finland, Iceland, Norway, and Sweden, signed the EEA Agreement, which became effective 1 January, 1994. The difference in organisational status is one important reason for having Norway included in this project. If certain changes are claimed to be the unavoidable effects of EU membership, they should have happened both in Finland and Sweden, but not necessarily in Norway; likewise, to claim that they are unavoidable outcomes of the EEA Agreement, they should have been realised in all three countries. Of course, this latter case does not logically prove that they are necessary outcomes of the EEA Agreement only. By taking into account that Norway was very reluctant to change its alcohol control system, Norwegian outcomes have direct relevance to this study.

Content and Structure of the Book

Alcohol control measures affect alcohol consumption levels and drinking habits, which in turn have an effect on alcohol-related social and health problems (see discussions of these relationships in Bruun, et al., 1975; Edwards, et al., 1994). In addition, alcohol control policy measures, as well as developments in alcohol consumption, are reflections of the political will of citizens and their choices as alcohol consumers. These matters affect economic and commercial interests and their relative political ability to influence national alcohol control policy. Similarly, general social and economic changes help to shape public opinions and the political attitudes and values of drinkers and abstainers as citizens. Therefore, alcohol control measures are by no means the only factors affecting alcohol consumption, and consumption, likewise, is not the only factor affecting alcohol-related problems. This book addresses the other factors and their interactions as well.

This chapter continues with an overview of the remainder of the book on a chapter-by-chapter basis. Then a brief description and short history of each country establishes the background for the chapters that immediately follow.

Chapter 2, Nordic Alcohol Control Policy and the Process of European Integration, reviews the recent history of the relationship between the EU and the three Nordic countries, including the negotiations and agreements proposed and reached. In this chapter we describe the process of European integration and the processes that brought the European Economic Area Agreement into force in Finland, Norway, and Sweden in 1994. We also discuss the reasons why Finland and Sweden became members of the European Union in 1995, but not Norway. This chapter is important for our analysis in many respects. First, it gives us hints about when to begin to seek influences of the European integration on the Nordic alcohol control policy systems, as well as facts about when and how the European integration began to mould the Nordic systems. Second, it gives us the basic understanding of why this should have happened and in what directions the European integration has been pushing the Nordic systems. Third, it gives us ideas about the alternatives left for those having social policy and public health responsibilities for controlling the alcohol field, as well as ideas of the opportunities it gives to the private alcohol sector. The description of the negotiation process also gives us a closer look at how Nordic cooperation has functioned both on a general level and particularly in relation to alcohol. And, finally, the descriptions and analyses in this chapter help us to understand the developments in popular sentiments.

Chapter 3, National Systems for Alcohol Production, Distribution, and Retail, deals with changes in alcohol systems in Finland, Norway, and Sweden. This chapter presents the history of alcohol control in each country and the latest changes in those control systems. The structure of alcohol production and the developments in the number of alcohol producers is discussed, as well as the structure of wholesaling and importing alcoholic beverages. The legal system for retail sale of alcoholic beverages off and on the premises is also presented. This chapter provides a description of both the developments in the physical availability of alcoholic beverages in the 1980s and 1990s and the dramatic recent changes in the national systems of production, distribution, and retail sale.

Chapter 4, Taxation and Retail Prices of Alcoholic Beverages, continues the description of alcohol availability by considering how alcoholic beverages are taxed and priced. The retail price of alcohol is one of the major aspects of Nordic alcohol control; a high price is intended to provide an economic barrier to consumption. This chapter presents the historical changes in real prices of alcoholic beverages in the three countries and compares the taxation and price levels with those of other EU countries. Retail prices for the three Nordic countries for off-sale and for on-sale are included.

Chapter 5, Levels and Patterns of Alcohol Consumption, discusses changes in alcohol consumption in each of the three countries from 1950 through 1996. Consumption levels are derived from alcohol sales figures, self-reported survey data, and estimates of unrecorded consumption from private imports, smuggling, and legal and illegal home production. Comparisons between the per capita levels of alcohol sales for the Nordic countries and EU countries are presented. Estimates of total alcohol consumption, allowing for unrecorded consumption, are used to discuss changes in drinking that can be related to the national association with the European Union.

Chapter 6, Social and Health Consequences of Alcohol Consumption, presents the historical levels of alcohol-involved problems including mortality, violence, and drinking and driving from 1980 through 1996 to document trends in these problems. Comparisons with non-Nordic members of the EU are also made. This chapter is important because social and health consequences of alcohol consumption are the ultimate reason to have special alcohol control measures. Also, the data for alcohol-related problems are widely used in the alcohol control policy debate.

Chapter 7, Economic Actors and Consequences, describes various interests and sectors in each of the three countries, all of which have their own concerns and investments in the changes in alcohol control policy. These actors include alcohol producers and distributors, the off-premise retail monopolies, members of the temperance movement and other social groups, and the state itself as the collector of alcohol taxes and the conductor of welfare policy. The economic importance of alcohol production and distribution is discussed. This chapter also analyses the interactions between the political will to control alcohol and the private interest to make money selling it. This chapter provides further understanding of changes in the alcohol control systems documented in Chapter 3. It also analyses the varied interests different actors in the alcohol field have regarding future alcohol control policies. This chapter discusses the crucial dividing line in the traditional Nordic alcohol political power structure between health and social policy considerations and economic interests.

Chapter 8, Changes in Attitudes to Alcohol Policy in the Nordic Countries, presents the patterns of public attitudes and opinions about alcohol in Finland, Norway, and Sweden both prior to association with the EU and afterwards. Public attitudes are discussed in connection with the welfare state and alcohol control policies. This discussion includes the possibility that significant changes in public attitudes about alcohol control policy could have been an important background influence on national decisions about the EU. This chapter describes how people, according to opinion polls, responded to new developments related to alcohol and what kinds of opinions they have regarding the future.

Chapter 9, Conclusions and Thoughts About the Future, presents the overall findings and observations of the authors. The implications of the changes in alcohol consumption and consequences, as well as structural changes in the national alcohol systems in Finland, Norway, and Sweden resulting from the EEA, are presented. Possible future developments are also discussed.

Description of Countries

Because this book analyses the social, economic, and political dynamics of alcohol control policy in Finland, Norway, and Sweden since 1980, this introductory chapter concludes with a brief general history of Nordic cooperation and of each country to set the stage for discussions in the chapters that follow.

There is a long history of informal and formal Nordic cooperation among Finland, Norway, and Sweden. This cooperation is deeply anchored in the people of these countries and may be explained by strong ethnic and cultural ties. Linguistic linkages also exist, in that the Swedish and Norwegian languages are quite similar, and Finnish people are required to learn Swedish, as Finland is a bilingual country by constitution. Thes...

Table of contents

• Cover
• Half Title
• Dedication Page
• Title Page
• Copyright Page
• Table of Contents
• Figures
• Tables
• Preface
• Acknowledgements
• 1 Background: History and Purpose of Nordic Alcohol Control Policies
• 2 Nordic Alcohol Control Policy and the Process of European Integration
• 3 National Systems for Alcohol Production, Distribution, and Retail
• 4 Taxation and Retail Prices of Alcoholic Beverages
• 5 Levels and Pattems of Alcohol Consumption
• 6 Social and Health Consequences of Alcohol Consumption
• 7 Economic Actors and Consequences
• 8 Changes in Attitudes to Alcohol Policy in the Nordic Countries
• 9 Conclusions and Thoughts About the Future
• Bibliography
• Index