Civil Society Dialogues EU-USA 8 - 9 December 2010, Washington

1

Civil Society Dialogues EU-USA

8 - 9 December 2010, Washington

Physical availability, including government monopolies and role of trade treaties

Sven-Olov Carlsson, President

WTO and alcohol globalization

From a trade perspective, alcohol is a commercial ’good’, or a service, or an investment having the right to establish anywhere.

GATT, NAFTA, The ’Single Market’ of the EU, GATS have all been used to challenge the alcohol control policies of treaty members or prospective members.

WTO and alcohol globalization

• Global free trade in goods• Free trade in services, including distribution

and advertising• GATS and public health regulation• The Precautionary Principle• Challenges to developing countries• European free trade in alcohol• The example Thailand

Global free trade in goods

• The establishment of the World Trade Organisation (WTO) in 1995

• New trade agreements under WTO are backed up by sanctions and a court system that can force noncomplying governments to pay compensation or face retaliation in trade sensitive sectors.

Free trade in services, including distribution and advertising

• In 1995 the General Agreement on Trade in Services (GATS) was established as one of the cluster of new agreements comprising WTO.

• GATS covers services in all sectors except those exempted from governments ’commitments’ under the Agreement

GATS and public health regulation

• The GATS formalises many of the legal arguments that supported challenges to alcohol regulations. Most controversially, GATS specifically addresses domestic regulation.

• Regulations must not be more restrictive than necessary and measures must be necessary to achieve a specified legitimate policy objective.

• GATS constraints are likely to influence policy development at the very beginning, by narrow the thinking of public servants and policymakers what is possible.

The Precautionary Principle

• The GATS principles ’extend far beyond trade and reach into the very heart of domestic government authority

• Government decisions about GATS may bind future governments, restrict the kinds of policies and legislation that can be adopted, or lock in liberalised policies that are having adverse effects on public health

Challenges to developing countries

• Requests under GATS for ’full commitment’ on distribution and advertising may reverse or block important and effective policies that can help reduce alkohol related harm

European free trade in alcohol

• The EU is in essence a free trade agreement within a ’common market’. National alcohol policy differences considered to impede the free flow of trade have come under pressure

• Some new EU member states has already made full GATS commitments which include alcohol distribution

The example Thailand

• The negotiation process for EU-ASEAN FTA (Region-to-Region) came to a frozen stage few years ago. Then EU changed its position to pursue FTA for each ASEAN contry (Region-to Government), including EU-Thailand one.

• There is a big potential in Thai market for ’Big Alcohol’, as only 30 % of Thai adult drinks, and with bigger proportion of young generation who have higher income and taste; preferring internatinal brandes beverages than domestic

• The implicit message from EU is ’No alcohol – no negotiation

TOPICS

• Basic Background Data

• The Nordic Solution

• Last years

11

12

• Skriv tekst her…

13


14


TOTAL:• Population: 19.8 million

• Consumption per capita*): 7.7

• Sales volume: 626 million liters

• Turnover USD 7bn

*) Registered and unregistered consumption of pure alcohol,

including tax free, own brewing and smuggling.

15


ICELAND:• Population: 315,000

• Name: Vínbúdin ÁTVR

• Opinion support: 55.4 %

• Customer satisfaction: 66.2 %

• Age limit: 20 years

• Consumption per capita*): 7.5 liters

• Sales volume**): 20,381,000 liters

• Turnover: USD 175,650,000


including tax free, own brewing and smuggling.*) Including beer < 4.75 alc %

16


THE FAROE ISLANDS:• Population: 48,000

• Name: Rúsdrekkasøla Landsins

• Opinion support: 64.0 %

• Customer satisfaction: 83 %




• Turnover: USD 23,000,000



17


NORWAY:• Population: 4,830,000

• Name: Vinmonopolet

• Opinion support: 56 %


• Age limit: 18 / 20 years < 22 alc % >


• Sales volume: 73,830,000 liters

• Turnover: USD 1,828,500,000



18


SWEDEN:• Population: 9,256,000

• Name: Systembolaget






• Turnover: USD 3,236,100,000



19


FINLAND:• Population: 5,326,000

• Name: Alko



• Age limit:18/20 years < 22 alc % >


• Sales volume: 112,225,695 liters

• Turnover USD 1,632,700,000



20

Registered alcohol consumption in Europe, Canada and the US

Measured in liters of pure alcohol consumed per capita in a given year, according to the most recent data from the WHO (source: Wikipedia)

21

• All countries (except Faroe Islands) member of European Union (EU) or European Economic Area (EEA).

• What is EU/EEA?• EU is a union based on political cooperation and the

free movement of people, goods, capital and services• EEA is a free trade union• No constitutional rights to legislate alcohol policy for

the member states• Retail Alcohol Monopolies thus allowed

EU / EEA

TOPICS



• Last years

22

The Nordic SolutionStrong focus on restrictions

23

• State owned companies with exclusive right to retail alcohol • Absence of private profit motive • Strong belief in limiting alcohol harm by restrictive accessibility

thus limiting total alcohol consumption• Brand neutral• Limited number of stores and opening hours• No sales to minors, intoxicated or anyone buying on behalf of

minors/intoxicated• Campaigns on preventing underage drinking with focus on

producing ID when under 25 years of age• No marketing allowed• Information on the harm caused by alcohol• Our citizens do not regard alcohol as an ordinary commodity and

value social control more than convenience and free access to alcohol.

Limiting harm while providing

outstanding service

Outstanding customer service

Service Standards.Meeting customer needbased on expert advise.

Education of staff

Broad product range

Depth and breatdhAll wine regions represented

ProfitableProduct quality

Modern shop-

conceptTidy self-service storesModern and responsible

imageNice ambiance

Mulitichannel retailing

Integrated multichannel conceptEasy to shop

Easy yo navigate

Corporate Social Responsibility

Absence of profit motive.Ethical Trade (Nordic cooperation)

Environment.

Fierce internal competition

Store of the yearBalanced scorecardMystery shoppers

Strict productivity goals

The Nordic Solution… and customer service

Our stores …

25

ATVR, IcelandSystembolaget, Sweden

Alko, Finland

Vinmonopolet, NorwayRúsdrekkasøla Landsins, The FOE

Rúsdrekkasøla Landsins

26

• Very high results on customer satisfaction indexes in all countries

• We fulfill a societal need – limit harm, good service

• The public opinion is thus in favor for the monopoly arrangement in all countries

The Nordic Solution

Why do we succeed when being monopolies?

Customer satisfaction

27

The Nordic Solution


28




29

Examples on campaigns

30

• Finland: http://www.lastenseurassa.fi/index2_sv.html

• Norway: http://www.viktigbeskjed.no/ http://www.alderskontroll.no/

• Sweden: http://www.systembolagetkampanj.se/forskarrapport/

http://www.lastenseurassa.fi/index2_sv.html

http://www.viktigbeskjed.no/

http://www.alderskontroll.no/

http://www.systembolagetkampanj.se/forskarrapport/

31




The Nordic Solution


Opinion Support for the Monopoly Arrangement

32

TOPICS



• Last years

33

Distance Sales

34

• Sweden• National ban challenged in EU court• Judgment June 2007, allowed private import• National law changed 1 July 2008

• Finland• Allowed 1995 when entering EU• New administrative rules 2007 to specify private import and monopoly rights

• Norway• Government agreed to lift ban after European judgment• National law changed 1 July 2009• Supreme Court recently voted to uphold the total ban of alcohol advertisement in all

media

• Iceland• Allowed• Internet and online stores

Documents

Civil Society Dialogues EU-USA 8 - 9 December 2010, Washington