Online rival for Finland's drinks retailer

- Last updated on GMT

Related tags: European union, Alcoholic beverage, Finland

A Spanish company offering to sell alcohol to consumers in Finland
could prove a rival to the state monopoly. But the fact that
delivery of the drinks could take up to two weeks - to say nothing
of moves to close the legal loophole allowing such a site to exist
- could make it a short-lived venture.

Alko, the state-controlled Finnish drinks retailer, has a new rival in the form of the Internet-based company Cybeerwine. The Spanish Internet group is planning to take on the Finnish retailer, which has the monopoly to sell spirits and wine, by delivering its products directly to consumers homes.

According to a report in the Finnish paper Helsingin Sanomat​, one of the principal flaws with the Internet-based system is that the deliveries could take up to two weeks to arrive, not exactly ideal for anyone looking for a bottle of wine for a dinner party arranged at the last minute, for example.

But where it is strong, however, is the fact that the tax levied on each drink bought via the site will be paid not by the shopper but by a Helsinki-based company called TG-Partners which will then pay the money directly to Finnish customs. The firm has been granted permission by the National Board of Customs to act as the Spanish company's tax representative in Finland, the report said.

While Alko's monopoly makes it illegal for any other company to sell alcohol in Finland, Cybeerwine could get round the issue by the fact that TG-Partners, the only part of the business which is based in Finland, is not actually receiving any money from the sale. Since it is acting solely as Cybeerwine's tax representative, it is not breaking the law.

While both Finland and Sweden have strict controls over the sale of alcohol - controls which have kept them at constant loggerheads with the European Union authorities and which mean that alcohol in these countries is more expensive than in any of the other Member States - the difference between the two countries is that Sweden's legislation makes it illegal for alcohol to be sold through online websites.

Proposals to change Finland's regulations to close the loophole have already been put forward, but the government has argued that this is more about keeping the drinks market a level playing field than restricting consumer choice. Since no drinks retailer in Finland has the right to deliver alcohol directly to customers' homes, the current situation is unfair and needs to be rectified.

However, given the pressure on both Finland and Sweden to overhaul their outdated alcohol regimes, systems which have led to a major increase in cross-border shopping (since prices in Denmark or Germany are much lower), it is unlikely that either country will be able to prevent the growth of such websites in the future.

Many other Member States already have well-developed online sites, and while the fear that such portals make it easier for minors to get hold of alcohol still remain, they are unlikely to be able to prevent the growth in the long term.

This of course does not mean the end of Alko or any other drinks retailers (since Alko only has the monopoly on strong alcoholic beverages). There will always be a need for customers to visit stores, and as long as these outlets remain competitive on price, consumers will continue to opt for them - or indeed bars and restaurants - for the majority of their everyday purchases.

Related topics: Market Trends

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