The Icelandic discussion of new EU rules as a threat to the ATVR alcohol retail monopoly is based on a misunderstanding and risks gravely undermining Icelandic public health outcomes, writes Kalle and illustrates how important alcohol retail monopolies are and that they are not at odds with the EU Geoblocking Directive, as some have claimed in Iceland…

The real meaning of EU rules

“Alcoholic Beverages To Be Sold Online” reads an Icelandic article that recently made a splash in the Brussels public health circles. It explains that the Icelandic government is considering a bill that would give up the ATVR alcohol monopoly by allowing private alcohol sales online. The measure is described as mandated by the EU Geoblocking Directive. To someone working full-time on EU alcohol policy, it appears the Icelandic debate is the result of a grave misunderstanding of new EU rules.

Public health oriented alcohol retail monopolies are legal under EU rules. This was confirmed by the European Court of Justice over 20 years ago and there are several alcohol retail monopolies that continue to exist within EU and EEA-countries: Sweden, Finland, Norway and Iceland are clear examples.

Alcohol retail monopolies work to save lives, promote health

Not only are the monopolies legal but also recognised by the World Health Organisation (WHO) as one of the most effective measures for reducing alcohol-related harm.

Recent research from Finland shows that there would be over 500 additional alcohol-related deaths in the country should Alko, the alcohol retail monopoly, be disbanded and alcohol sales be completely privatised. Several federal states in the United States also have alcohol retail monopolies, similar to those in Scandinavia.

Finnish Alcohol Policy At The Crossroads

A systematic review of evidence carried out by the US Centre for Disease Control’s Preventive Services Task Force also showed how privatisation of alcohol retail sales is associated with a dramatic increase in alcohol consumption. They, therefore, strongly recommend against it.

The evidence is clear that when profit interests and market forces are allowed into the alcohol retail market, not only do prices fall and consumption increase, but it also becomes significantly more difficult to ensure that licensing rules are followed. The Swedish alcohol monopoly Systembolaget has an age-check rate of over 95% – according to Systembolaget’s 2018 Responsibility Report. This number is unmatched by private retailers in countries where alcohol retail sales are privatised.

Alcohol retail monopolies NOT at odds with Geoblocking Directive

Proponents of the idea to privatise internet sales of alcohol in Iceland seem to claim this was required by the new EU Geoblocking Directive. Fortunately, it can easily be verified that so is not the case.

It suffices to look at all those EU-countries which implemented the Geoblocking Directive in 2018 and where alcohol monopolies are still standing strong. In 2018, Finland even had their ban on online sales of alcohol (including from other EU-countries) upheld by the Finnish High Court after a supportive judgement in the European Court of Justice.

If there are people who are uncertain as to how the Geoblocking Directive can be reconciled with an alcohol retail monopoly, my advice would be for them to contact the Ministry of Social Affairs in Finland or in Sweden and ask for help. There are also many NGOs in Brussels that would gladly offer our services and input should it be needed.

It is always worrying to hear about situations where EU rules are being cited as a justification to remove effective public health policies. Usually it is based on a legal misunderstanding, but such misunderstandings can also be exploited by actors who would stand to make a lot of money from an increase in alcohol consumption. It is therefore important that the alcohol policy debate is informed by facts and evidence, both when it comes to legal matters and public health effects.

For further reading:

Sweden: Alcohol Retail Monopoly Most Trusted Institution

Sweden: Alcohol Retail Monopoly Most Trusted Institution

Research Article: Estimating the public health impact of disbanding a government alcohol monopoly: application of new methods to the case of Sweden

Privatizing Government Alcohol Retail Monopolies Causes Substantial Adverse Consequences For Public Health And Safety