Monopoly Under Threat

Systembolaget fires 50 managers.

News that Systembolaget, the Swedish retail monopoly, has fired 50 of its shop managers is no surprise.  The Systembolaget has been talking tough ever since 92 of its managers were arrested on corruption charges.  Their crimes were to accept money, holidays and the like in exchange for offering primesite listings to various brands.

That the monopoly has acted with the utmost probity in this matter isn’t in doubt.  But what is open to question is the entire rationale of the Systembolaget itself.  Of far more concern than a few dozen dishonest managers must be the way in which the monolithic organisation has seen its sales tumble over the last 12 months.  It’s no coincidence: Denmark and Finland have both halved their tax rates on spirits in the last year, while Norway cut its own duty a couple of years before that.  The result: whereas all bar the Danes used to come to Sweden for their booze, now the border traffic is in the other direction which is how the country has fallen victim to a paradox of both rising domestic consumption and falling national sales figures.  With an increasingly mobile population, market forces alone suggest that the days of the Systembolaget are numbered.