THE ALKO MONOPOLY
Alko consists of 371 shops and around 2,500 employees. It is a state-owned private company like Sweden’s Systembolaget and Norway’s Vinmonopolet. All of these rely on tendering processes when deciding what to list.
However,Systembolaget and Alko seem to differ in how they see themselves. Alko can be compared to a state-owned supermarket chain focusing on sales, while Systembolaget is more of a pipeline between producers and consumers. Alko’s margins are around 35%, twice as high as Systembolaget’s. Sweden’s lower duty rates have an effect too. Commercially, Norway’s Vinmonopolet is closer to Systembolaget, but its alcohol tax policies are closer to Finland.
Wine shelf (Photo: Katri Lehtolo, Alko Oy/lmage Bank)
Alko has four different product listing categories: General Selection, Sale-to-order Selection and Limited Quantity Products and Seasonal products. It has around 12,00 products.
4,791 (3, 316 wines) in General Selection , 5 893 (4 269 wines) in Sale-to-order Selection, 1 620 (1 309 wines) in Limited Quantity Products and 143 (77 wines) in Seasonal Products.. All the major brands and countries are represented and competition for tender listings is fierce.
A typical shop is placed close to, or inside a shopping centre. It has 1,500 to 2,000 products, 60% of which are wines. Close to 90% of all products are chosen from the Regular Selection.
Although the monopoly has a big Ordering Selection, these wines are not often seen in the shops. It is effectively an addition to Alko's web shop selection which as to be ordered and paid for in advance, and picked up within 5-7 days.
Alko’s shops are forbidden by law from delivering directly to consumers.
Wine Sales in Alko Shops
Alko’s wine sales are split between red and white wines, followed by supported by sparkling wines and rosé.
Champagne represents 8.2% of total sparkling wines sales and 1% of the total wine sales.
2021 Alko's wine sales per category in % (Source STM)
Finland’s alcohol tax on wine is second highest in EU, at €4.21 per litre and, unsurprisingly, it has an impact on wine sales. As in the UK but even more so, the lower the retail price, the higher the proportion that is represented by tax, and vice versa. In addition to the tax, there is a packaging tax of 0.51 per litre and a relatively high VAT rate of 24%.
This high rate of taxation which was increased in 2021, has reduced the sales of wines below 8€ especially reds. Wine previously selling for 8€ have slowly become 9-10€ wines. According to the statistics, the red wine market is mostly in the 8-15€ bracket, which reflects ex-cellar prices of €1.40€ to €5.00.
Regarding countries of origin, Chile takes top place, followed by Italy, Spain and Portugal. Chile has lost volumes recently, however, and pricier freight costs will increase this trend.
Alko's bottled red wine sales by price group in % (Source STM)
The range of white wines is wider, with more lower-price wine. As with reds, there is little volume at premium-super-premium levels . Once again, Chile is the leading country, followed by Germany, Italy and then South Africa.
Alko's bottled white wine sales per price group in % (Source STM)
Prosecco has been as successful in Finland as elsewhere. This has helped Italy overtake Spain to become the biggest player. Third comes France.
Alko's bottled sparkling wine sales per price group in % (Source STM)
Rosé wines are a small but growing group. France is market leader, followed by Italy and Spain.
Alko's bottled rosé wine sales per price group in % (Source STM)
BIB vs Bottle
Alko is a relatively open to innovative packaging. They are interested in all new concepts and the monopoly’s shops have various packages from cans to pouches.
As in Sweden, BIBs challenge bottled wines and share the market 50/50. A typical BIB is an Apassimento styled red wine or a slightly sweet white wine.
Bib vs. Bottle sales in Alko 2021 (Source STM)