Alcoholic Drinks in Sweden

Abstract

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• Get insight into trends in market performance
• Pinpoint growth sectors and identify factors driving change
• Identify market and brand leaders and understand the competitive environment

Product coverage

Beer; Cider/perry; RTDs/High-strength premixes; Spirits; Wine

Executive summary

Rainy Summer held back Volume Growth

Total value sales of alcoholic drinks continued to increase in 2007 at the same times as volume sales decreased marginally. The rainy summer of 2007 had a negative impact on sales of beer and cider/perry, of which beer accounts for the majority of volume sales of alcoholic drinks in Sweden. Wine, spirits and RTDs sales continued to increase and were fuelled by the strong Swedish economy, including higher disposable income. However, wine too felt some effects, for example rosé wine was negatively affected by the poor summer weather. It is likely that beer and rosé wine sales will rise again in 2008, assuming the summer weather is better.

Vin & Sprit AB up for Sale

In 2007, the new Alliance government finally decided that state-owned Vin & Sprit AB should be privatised. The jewel in its brand portfolio is, of course, the vodka brand Absolut. This attracted the attention of several of the major international players in alcoholic drinks, including Bacardi, Pernod Ricard, Beam Global and Diageo. In December, the government announced that Vin & Sprit would be sold as a single entity, so the purchaser will almost certainly be a multinational. However, several domestic companies had expressed an interested in those parts of Vin & Sprit that deal with wine and local spirits brands and may yet form an alliance with a multinational.

Brewers Dominate Total Volume Sales

The competitive situation in alcoholic drinks differs depending on the sector. Total volume sales as well as beer volume sales are dominated by four breweries, with Carlsberg Sverige as the leading one. It is also the leading company in RTDs. Spirits and wine are led by Vin & Sprit AB, while brewer Kopparbergs Bryggeri AB leads in cider/perry. Domestic companies hold a strong position in all sectors of alcoholic drinks, either as distributors, NBOs or producers.

Retail Monopoly

Sweden is one of the few countries in Europe with a retail monopoly on sales of alcoholic drinks of more than 3.5% abv. Systembolaget, the retail monopoly, is the only channel that is allowed to distribute wine and spirits as well as beer, cider/perry and RTDs of more than 3.5% abv. The grocery channel only offers beer and cider/perry. Supermarkets/hypermarkets dominates this channel, although discounters was increasing its share at the end of the review period on the back of a growing number of outlets. The retail monopoly ensures that Swedish consumers have an exceptionally wide range of wines and spirits to choose from.

Internet Imports

The European Court ruled in mid-2007 that personal imports of alcoholic beverages were legal. The ruling was given a lot of media coverage. However, this channel remains subject to Sweden' s high taxes, therefore Euromonitor International does not expect this to have any measurable impact on domestic sales. It is also a very inconvenient way of purchasing alcohol, since the consumer will need to handle the paperwork for paying the taxes and arrange the shipping themselves.

Future Growth

Euromonitor International forecasts increasing volume and constant value sales. As always are there uncertain factors that could change the forecasts either way. One is summer weather, a warm or a cold and rainy summer has a strong impact on sales of several categories in alcoholic drinks. Beer, ros wine and cider/perry are some examples. However, the main reason behind the forecast growth is the strong Swedish economy. According to analysts, the positive development is expected to continue for at least three more years, and this will benefit sales of alcoholic drinks. The stronger economy will especially benefit sales of quality products in wine and single malt whisky. In addition, the trend in Sweden is towards increased drinking during the week, for example a glass of wine with dinner, part of a long-term social trend that will continue for the foreseeable future.