Tag Archives: systembolaget

How much can a koala bear?

I am deafened by the silence of Swedish consumers reaction to Systembolaget’s plan for new releases of wines in 2010 . Faced with criticism that the newly released wines sold out too quickly and disappointed customers the monopoly was faced with two choices:

a) new releases are obviously popular so more of each should be ordered (ie. consumers want variety)

or

b) reduce the number of new releases and order more of those (ie. consumers want variety but we will give them quantity)

The monopoly said their employees could not cope with too many releases (cue violins…) so putting the interests of their consumers behind those of the employees, option B won out.

To quote Australian comedian Austentaysious “How much can a koala bear?”.

Swedish bears obviously can deal with a lot of pushing around by the monopoly. The rough end of the stick is that small producers who used these new launches as a way to get their products into Sweden could supply smaller quantities without disrupting their export market strategy. By increasing the volume required quailty smaller producers will not want to put all their eggs in one basket and be squeezed out and more sales opportunities will be given to the big producers – of which we do not need more of here anyway.

Alcohol importers, already struggling and closing down due to the monopoly’s resistance to increase prices to offset the weak Kronor will now have to fight over fewer product listings.

Where do wine consumers fit into this you may well ask? Obviously they were not a consideration in making this decision.

We now have over 50.000 members in our wine clubs, obviously consumers want choice and not just of where they buy their wine but what they buy and are tired of the bland monopoly diet of bag in box (60% of the wine sold by Systemet) and mass produced wines that have the character and complexity of a bottle of Coke.

cheers

Mark

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Challenging times

Baru is the name of a range of wines we recently introduced from Sicilly. One red, Nero d’Avola, the indigenous grape which is related to the scrumptuous grenache grape we associate strongly with Spain and two indigenous white wines.  James visited Sicilly last summer and came back determined to find some great value wines from this upcoming wine region. Baru offered the quality and value we hoped plus an extra ingredient – it challenged our members. Nero d’Avola is not shiraz, not cabernet sauvignon, not merlot, not pinot noir or even carignan that often sneaks into popular wines from southern France.

The opening of these wines did not quite set off Mt. Etna in thousands of home across our long country, but it did cause more than a ripple across the Straits of Messina. Our members on Australian Wine Club rate all the wines, without censorship and we read every one of the hundreds of ratings. These Baru wines attracted a lot of interest and emails. Many of you loved the wines, it sold out quickly, but an unusually high number told us you didn’t like it. Jonas Palmberg from Trelleborg http://www.australianwineclub.se/wine_details.php?wine_id=520 gave the wine 11/20, one of the lowest scores we have ever had for a wine. Thank you Jonas for being honest and telling us what you thought of the wine. Ann Wikström from Skövde gave it 20/20, which may be overly generous and there were numerous ratings of inbetween scores. But it shows that James and Jimmy acheived their objective – they challenged your senses, made you try something new that maybe you had not tried before and you can either add or delete these fine Sicillian wines to your list of favourites. At the very least you can add it to your list of wine grapes tried!

We love getting ratings for our wines and as we offer a 100% satisfaction money back guarantee we need to know what our members think about the wines so we can maintain our high quality and still challenge you every now and then!

Challenging times hit Premium Wines Sweden, one of the 3 wine import companies owned by Altia, the Finnish alcohol group. Premium Wines will be closed done and their products absorbed into the other two Altia companies with the loss of 15 jobs. The strength of the Euro and no doubt Systembolaget’s insistence that alcohol importers subsidise Swedish alcohol consumers played a part in this decision. Premium Wines were the first wine importers to welcome Antipodes Premium Wines into their industry in 2004. We got a letter from their lawyers telling us we could not use the name Antipodes Premium Wines as it infringed on their name. We told them in a very Australian way to sod off and eventually made friends when they changed senior management and were acquired by Altia. To our friends there we wish you good luck and hope that you find new and challenging jobs in the near future. Hopefully the stupidity that importers should bear the brunt of the strong Euro while all other consumer goods companies can in some way pass on part of the price increase it to the retailers and customers will change before more jobs are lost in the industry. While Systembolaget’s sales keep rising during these challenging times it is immoral that they should cause more lost jobs to be added to the pile. Their owners have to pick up the tab in the end anyway!

Note: we do not sell any wine to Systembolaget so this problem does not impact us. As a currency moves against the Kronor we quickly move our purchasing to wine producing countries with more favourable currencies so we can always offer the same great value wines to our members.

cheers

Mark

Ripples from the sea change

A powerful friend in Stockholm quietly let me in on a secret:  there are 20 people who make all the big decisions in Sweden and pull all the puppet strings. A various stages of our business we have felt the slap of the puppet’s hand and the kick of its wooden leg in the hope of stopping wine lovers from having legal access to quality wine. But for every cold wooden kick and slap we get 1000 warm handshakes and hugs from our growing army of members that is now well over 45.000 strong. We don’t feel so lonely in our battle against the puppets of KF and Posten.

This has already been an eventful month (besides it being the birth month of our children).

  1. We completely stopped selling via Systembolaget and closed our Stockholm warehouse: now we control the whole service experience
  2. We re-launched Malmö Aviation Wine Club www.malmoaviationwineclub.se with direct delivery to an overwhelming response from this great airline’s frequent flyer members. Well done Mia-Li, you have done a great job launching this new site.
  3. Australian Wine Club continues to grow like our glasshouse tomato bushes in the summer. March will be our best sales month ever thanks to all our members’ support.
  4. Vinfynda will soon be resurected from the dead and incorporated in Australian Wine Club where great value discounted wine can be found with home delivery.
  5. I met some incredibly intelligent and articulate people who understand and support what we are doing. The fact that organisations like Timbro and magazines like Neo exist in Sweden gives us hope that free markets and entrepreneurs have a future here.
  6. The phones of our wine advisors, under the management of the wonderfully patient and encouraging Maria, are ringing hot and members are really appreciating the service and new way to order wine. I was amused to see that Systembolaget has taken expensive full page newspaper advertisements to let us know that they have copied our wine advisor idea. But we don’t make you feel guilty about buying wine when you call us! When will the government stop monopolies from advertising to support their own monopoly – surely this is a political matter.
  7. The spring range of wines has just been finalised and includes our first South American wines (bring on the Argentinian Malbec), great value Chianti and Rioja and more Keith Tulloch wines. We shopped up the entire remaining supply of the all-time-member’s favourite wines, Fire Block Shiraz and Grenach. That, along with some very exciting new wines from New Zealand and Australia will make the spring sunny regardless of the weather!
  8. James and Jimmy are soon off to Pro Wein, the huge international wine fair in Germany, where we hope to find more pearls for the summer and autumn. Any requests?
  9. To all our industry colleagues who have recently lost their jobs due to Systembolaget’s refusal to increase wine prices due to the severe slump in the € to the SEK, we hope you get back on your feet soon. Can someone explain to me why a monopoly that is supposed to discourage alcohol consumption insists on making its suppliers subsidise alcohol consumers? If it were truly following its remit it would see this as an opportunity to increase prices and reduce sales. However, when all other products purchased from Europe and the US are rising in price, we can thank the monopoly for keeping prices artificially low at the cost of lost jobs in the alcohol importing industry. I suggest that SORAD conduct a study to calculate how many extra sick days will be taken due to the artificially low price of alcohol. The Russian government subsidises vodka, the Swedish State subsidises all alcohol!
  10. Watch out for next week’s news, it is sure to bring a smile to your face!

Cheers everyone

Mark

Financial Times takes up KF Breach of contract affair

See above: Open Letter to KF Directors

http://www.ft.com/cms/s/0/47b123fa-fc94-11dd-aed8-000077b07658.html

FT Germany: http://www.ftd.de/karriere_management/business_english/:Business-English-Vintner-fails-to-milk-Sweden-s-sacred-cow/498156.html

Vintner fails to milk Sweden’s sacred cow
By David Ibison

Financial Times: Published: February 17 2009 02:00 |

Mark Majzner is a laid-back 42-year-old Australian who until now barely had a political bone in his body. But this all changed after he signed a deal that allowed his modest company to compete with one of Sweden’s largest and most entrenched state-owned monopolies, Systembolaget.

The government-owned alcohol retailer has a presence on every high street and is known by the nickname “The System”. Swedes cannot buy alcohol from any other retailer and most of its stores keep bottles behind locked glass doors, bringing an element of pre-1989 eastern Europe to Sweden’s otherwise 21st century shopping streets.

Sweden joined the European Union in 1995 and EU regulations state there must be free movement of goods and services. The country’s state monopolies – which cover areas ranging from medicine to gambling – therefore do not sit prettily with the EU and in judgments the European Court of Justice has called on Sweden to open the door to competition.

An ECJ ruling allowing Systembolaget to keep its retail monopoly but permitting Swedes to buy alcohol online prompted Mr Majzner to set up his company, Antipodes Premium Wines. Registered in Malta, it buys pricier wine from around the world, warehouses it in Germany, pays Swedish taxes on behalf of customers and delivers the wine to their door. It has grown rapidly and has 27,000 members.

The Financial Times originally met Mr Majzner last summer and in an article argued that his business indicated that “after decades of state control, ‘The System’ is starting to crack”. But according to Mr Majzner, subsequent events make that claim appear optimistic. Mr Majzner signed a deal with the Swedish Co-operative Union (KF), which runs a nationwide chain of food stores, that allowed its 3m members to buy wine from Mr Majzner’s company using a KF website. Though the resulting sales volumes were expected to be tiny, the move meant that for the first time there would be a rival to Systembolaget on the Swedish high street.

But three days before the new service was due to go live, Mr Majzner was summoned to a meeting with a senior KF executive and told the deal was off even though the two companies had been working for months on the launch.

Posten, the state-owned Swedish postal service, also suddenly refused to deliver his wine, in spite of having done so happily for six months.

Armed with his contract, Mr Majzner considered suing and was told by his lawyers he had a watertight case. But then his law firm suffered a last-minute change of mind and said it could no longer represent him.

KF says the deal was terminated because it did not want to undermine Sweden’s policy of responsible drinking. A Systembolaget spokesman said it was surprised to see KF countering the country’s sensible drinking policy.

Posten said it decided not to deliver his wine, as it could not verify the age of the person collecting it – even though Posten is based in small local shops that ask for ID when cigarettes are sold and could do the same for wine.

Mr Majzner argues that he simply wants to use European competition law to offer Swedes premium wines, wines rarely drunk by alcohol abusers. He sees a more political explanation for the blow. He claims his joint venture with KF and Posten represented a competitive threat to Systembolaget and thus broke an unspoken bond that binds Sweden’s most powerful leftwing organisations.

Maria Rankka, the head of Timbro, a right-leaning Swedish think-tank, has little doubt this is what happened. “There are very strong power structures in place, as we can see in this case,” she said.

It is easy to forget the depth and breadth of Sweden’s leftwing heritage, but the fact remains that it has been ruled for most of the past 70 years by the Social Democrats, who set up most of the state-run monopolies. The country’s right-leaning government is a rare exception to the rule.

KF, for example, is “the union of the country’s 51 consumer co-operative societies” and traces its roots to Sweden’s folkrörelsen , or popular movement, which is regarded as the cornerstone of Swedish social democracy.

Moreover, many of its 3m members are also members of LO, the main labour union, which uses its fees to finance the Social Democrats.

Given these links, Mr Majzner believes it was impossible for KF to go into competition with a state-run monopoly, although oddly KF only seems to have realised this only after newspaper articles started pointing it out.

Mr Majznersays Sweden is a transparent and business-friendly country, butevery once in a while its socialist heritage can loom up out of the gloom and fight back. As a newspaper editorial on the whole affair asked: “There is a cost in challenging the most sacred cow of Social Democracy. But it can’t be impossible, can it?”
Copyright The Financial Times Limited 2009

Skriv till KF!

Är du för valmöjlighet och god affärsetik? Läs vårt öppna brev till KFs direktörer här. Om du vill säga ditt om att upprätthålla svensk affärsetik och valfrihet, kopiera och klistra gärna följande text och skicka till Nina Jarlbäck, ordförande i Ktf Svea: nina.jarlback@kf.se.

Idag läste jag i Financial Times hur KF har kört över småföretaget Antipodes Premium Wines. En tankeväckande artikel. Handlingar som denna tjänar inte till att stärka Sveriges rykte utomlands. Jag hoppas verkligen att denna fråga om kontraktsbrott kan lösas snarast på ett sätt som gynnar båda inblandade parter.

Lägg gärna till mig i kopia-fältet på mejlet! Min e-postadress är mark@australianwineclub.se.

New boss for Systembolaget

Congratulations to the newly appointed CEO of Systembolaget, Magdalena Gerger http://www.svd.se/naringsliv/nyheter/artikel_2365505.svd#articlecomments who takes over from the former prime minister’s wife Anitra Steen on May 1st.

The differences between Anitra and Magdalena say a lot about the way Sweden has changed since the new centre right government came to power. Anitra was a career public servant, during her tenure became married to the Prime Minister and Social Democrats political appointment without any retail or private sector experience.  Under Anitra’s 10 year reign 99 store managers were found guilty of taking bribes from Systembolaget’s suppliers and not one senior executive lost their job to take responsibility.

Appointed by the new centre right government, Magdalena has an impressive consumer products, private sector and even alcohol industry resume that would make her suitable for a deregulated alcohol retailer let alone a monopoly. She is quoted as saying that she does not expect to make many changes which sounds like typical new CEO diatribe given how different she is from her predecessor and the enormous experience she brings to the job. If the board did not want to change things they would not have appointed such an experienced and accomplished successor to Mrs. Persson. Given that only half of Swedes support the monopoly and contrary to what SVD mentioned in their interview with her (Du som kommer från det privata näringslivet, känns det skönt att slippa konkurrenter? Coming from the private business sector, does it feel good to not have competitors?) Magdalena will need all her impressive marketing and management skills.

Congratulations Sweden, in the words of the 44th US President, This is the change we need!

Cheers

Mark

Playing favourites.

Sorry Bosse Zetterqvist, your hollow comments have been exposed.

Posten delivers wine to Systembolaget’s 510 collection points, which are able to check if the recipient is over 20 and sober, but Posten can not do this through their own collection points (many of which are the same place). Bo, can you let us know how many collection points you share with Systembolaget? 

Below is from Systembolaget’s own website about their Ombud (collection point) service.  Bo Zetterqvist and Lars. G. Nordstrom work for a company  owned by all Swedes and in the service of all of us and should explain why they will only deliver alcohol sold by Systembolaget and not other companies operating legally in Sweden.  

Leveranser
Din beställning levereras alltid så snabbt som möjligt. Efter sista beställningstid hos ditt ombud plockar vi ihop varorna. Därefter levererar Posten dem till ombudet. 

Utlämning och ålderskontroll
Utlämning av beställda varor sker under samma tider som Systembolagets öppettider (öppettiderna regleras av riksdagen). Därför sker ingen utlämning på söndagar eller helgdagar.
Försäljningsreglerna är desamma som på Systembolaget, det vill säga man måste vara minst 20 år för att handla, ombuden lämnar inte ut till berusade eller när man misstänker langning.

If we are to believe Bosse’s explanation (see posting below) we also look forward to the big jolly guy in red and white delivering our packages this Christmas, not Posten!If you have a choice how to send packages this festive season and like quality wine, try and use a company that supports free choice.

Cheers!

Mark

Why doesn’t DHL or Schenker jump at this lucrative new market and grow at the expense of Posten? 

Cheap wine expensive

Thanks for all the comments on my blog, keep up the emails to mark@antipodeswines.com but could more of you also be brave enough to post some comments on the blog? If you are looking for which wines to buy next or the list of the top 10 cheapest best wines this autumn then I hope you have found another site on the web. I think a lot about wine, drink a bit, taste quite a lot and fortunately we sell even more than that. By all accounts our total sales of wine over 100kr is now a sizable percentage of the total Swedish market.

Since you are reading this blog then you won’t be offended if I waste a few bytes of cyberspace on the ills of cheap wine.  Generally people are interested in quality. Most of us drive quality fairly new cars, dress fashionably, prefer to buy organic and fair trade food and drinks and buy quality consumer products like mobile phones and televisions. Wine however has become commoditized where quantity rules over quality and appreciation takes the back seat to over-participation.

Being a wine journalist tasting the entire assortment of the national retailer each month must be a depressing and harrowing task. 60% of wine sold in Sweden is not in a bottle – think bag in box, tetra pack, little plastic cushions – the type of products you are grateful to have those funny plastic bags of shame to hide your purchase in.

The source of this obsession with quantity over quality, low price over good value stems from the myths surrounding the national retailers’ existence. I often ask people why the national retailer is good and two answers are always offered: the huge range of wines available and that due to its buying power the national retailer can get the lowest prices. 

If you live in the city then there is a large range of wines, but if you live near a normal store there wll be 5 white wines and 7 red wines in the base assortment over 100kr. To the next argument then. Yes, they do get the lowest prices and price is where the national retailer can use its power most. It creates a tremendously competitive environment amongst wine importers in this country so it does get low prices, which to my mind is a contradiction when trying to discourage alcohol consumption. However, as alcohol consumers have become hooked on a cultural mindset that “alcohol is bad” but “cheap is good” there has been a race to the bottom of the market so your conscience and wallet are both not hurt too much. The way the wine is displayed in the stores, by price, also encourages a price only mindset.

Many consumers will pay 500kr for a bottle of wine in a restaurant that costs 120kr in the retail store. But less than 1% of people would pay that much for a bottle in the retail store. The national retailer should encourage more expensive wines to be consumed – quality over quantity!

But is cheap wine really cheap? A purchasing mindset has developed that revolves around the total SEK paid not the value of the wine in the bottle.

3L bag in box wines are seldom found outside of Sweden. 5L is the most common format. While I do not encourage the consumption of 3L or let alone 5L of the same wine in a plastic bag, it is not a very economic size due to the high cost of the packaging. On a per liter basis it is more economic to buy a 5L box and you get more value for the wine in the bag.

Similarly with a bottle of wine. Under 100kr a bottle you end up paying more for everything else than the wine itself (in taxes (alcohol tax is 16,185kr per bottle), the national retailer and the importer’s margin, packaging and transport costs etc). 69kr is cheap for a bottle of wine but how much is the wine itself costing? Less than 10kr and you dont get much quality fermented grape juice for that. Buy wine over 100kr and the wine itself makes up a greater portion of the product and for that money you can get a significantly better wine.

Consumers should start looking at the value of the product they are buying, not the total price. As my wise old grandmother used to say: “two things you should never buy based upon price – sushi and brain surgery.” We can add wine to her words of wisdom.

Cheers: Mark Majzner