A 34-year-old American created an app to deliver alcohol from the Swedish government-run alcohol retail monopoly, Systembolaget, to homes of people in Sweden. Systembolaget sued the American for illegally procuring alcohol and the Stockholm District Court ruled in favor of the alcohol retail monopoly. He was fined and the Court of Appeal denied him leave to appeal.
The founder of the app had been traveling to Sweden for 10 years. When he found out that alcohol delivery is not widely available in Sweden like in the U.S. he thought to develop an app to do that.
Meanwhile, the Swedish Alcohol Act was amended to include the possibility of alcohol home delivery through a private company, Bring, from Systembolaget.
The American thought a home delivery app would be a lucrative opportunity and launched it. Supposedly his contacts at Systembolaget did not inform him it was illegal to do so. In Sweden, the government-run alcohol retail monopoly has the exclusive right to sell and deliver alcohol in order to protect people and communities from pervasive alcohol harm. Nevertheless, the American moved to Sweden during the pandemic to continue his alcohol home delivery business.
The app was set up to work as an intermediary between consumers and Systembolaget. People can order alcohol products through the Systembolaget app. A driver will then buy these from Systembolaget and deliver them to the person’s home. Customer identification was checked prior to delivery.
Stockholm District Court rules that the business was illegal
In June 2020, a law firm sent a warning letter to the alcohol home delivery business informing them that the business was engaging in illegal activities and requested them to cease operations. However, the owner continued the business. Then Systembolaget reported the home delivery business to the police.
The issue was taken up at the Stockholm District Court. The Court found:
- The 34-year-old was the only board member and actually conducted the business in the company in question.
- The business was conducted professionally and that it lasted for six months during which period a large number of purchases were made at Systembolaget.
- Some of these have also amounted to relatively high amounts of alcohol being purchased.
- Alcohol products were purchased “on a large number of occasions and to a greater extent”.
The Court assessed that the company’s activities led to private individuals in this case the drivers receiving alcohol as an intermediary between Systembolaget and the paying customers. Due to this reason the company was violating the prohibition to access provision as per the Swedish Alcohol Law.
Since the owner acted alone, controlled the business’s inflows and outflows and had the customers’ delivery fees at his disposal, his actions were covered by the criminal liability in the Alcohol Act and therefore he could be convicted of a crime.
The Court found that the owner of the company was aware that there was a risk his company was breaking the law. Since he did not take any measures to discontinue operations after receiving Systembolaget’s letter he was considered to have been indifferent to the risk that the business was illegal.
The Court further found that the owner having a different opinion than Systembolaget on how the provision should be interpreted does not mean that he lacked intent. The district court also did not consider that he should be released from liability on the grounds that he had received incorrect information.
The Stockholm District Court, therefore, found him guilty of illegally procuring alcohol products and sentenced him to a 50-day fine. He then appealed the conviction at the Court of Appeal but was denied leave to appeal the case.
Privately-owned online alcohol sales and delivery businesses can threaten the Swedish alcohol retail monopoly
A similar but much larger case was ruled in favor of Systembolaget in 2020 regarding the illegal alcohol sales and delivery of Winefinder. The online trading company Winefinder which operated from Helsingborg, Sweden sold alcohol online to Swedish customers for years. Apart from online sales, the company markets on social media platforms including Facebook, Instagram, and Twitter. Therefore, Systembolaget filed a lawsuit against Winefinder. The Patent and Market Court of Sweden ruled that Winefinder was conducting unlawful alcohol sales. The company was fined and operations halted.
These types of private online alcohol sale and delivery businesses can threaten the Swedish alcohol retail monopoly.
Systembolaget’s core public health approach is about eliminating private profit maximization interests from alcohol retail sales. Privately owned businesses aim to maximize profits and therefore promote and heavily market alcohol to people. This fuels alcohol harm.
The mushrooming of private sector initiaitves to sell and deliver alcohol in Sweden can destabilize Systembolaget and weaken Swedish alcohol laws by competing with the retail monopoly which inherently does not compete for sales. If left untackled such private online alcohol sale and delivery businesses would lead to increasing alcohol harm by increased availability and marketing.