Wine to Finland

(Last updated: 16 Jul 2007)

Trends and opportunities

The market

Finland’s alcohol legislation is based on a policy that judges that controlled distribution reduces the detrimental effects of consumption. Advertising (and marketing) is limited, prices are high (due to taxation) and retail trading hours are limited.

The sale of alcohol in Finland is dominated by the 330-outlet, retail chain, Alko. Alko is a semi-statutory authority functioning under the Finnish Ministry of Social Affairs and Health.

Alko stores are (almost) the only retail outlets for products with an alcohol percentage of over 4.7 per cent of volume. The exception is wine and beer, with an alcohol content of less than 13 per cent, which is produced on Finnish farms. These may be sold directly from their place of manufacture.

Opportunities

Wine consumption in Finland, as a percentage of total alcohol consumption, has remained relatively the steady over the last three years at about 30 per cent.

However, Australian wine has steadily increased market share. The following shows the volume of Australian wine sold in Finland Between 1999–2005:

• 2005: 2.8 million litres
• 2004: 2.0 million litres
• 2003: 1.4 million litres
• 2002: 1.4 million litres
• 2001: 0.95 million litres 
• 2000: 0.62 million litres
• 1999: 0.62 million litres

Australian wines are known for providing good value for money and being easy to understand. Price is key purchase driver in the Finish market. Wine competes with spirits (especially vodka) and beer which are the traditional alcohol drinks in Finland. Wine is not as highly valued (in and of itself) as it is in countries such as France and Italy.

The following table shows the predominance of wine sold in the budget category.

Sales breakdown in 2005 by price category

Competitive environment

Australia was the fifth largest exporter to Finland in overall wine sales. Chile’s increase market share reflects its ability to supply value for money in the budget wine category.

	2003 (million litres)	2004 (million litres)	2005 (million litres)
Chile	6.5	7.3	7.8
France	7.7	7.4	7.0
Spain	8.1	7.2	6.9
South Africa	4.9	5.4	5.5
Italy	4.8	4.2	4.2
Australia	1.4	2.0	2.8
Finland	3.5	2.7	2.6
Germany	2.1	2.1	2.4
USA	1.5	2.0	2.1
Argentina	0.8	1.3	2.0
Hungary	2.5	2.1	1.8
Other	2.8	2.6	2.6

Tariffs, regulations and customs

Finland is a member of the European Union (EU), so the import regime of the EU now applies. In Finland, alcoholic beverages are subject to:

• Alcoholic beverage tax
• A surcharge when in retail sale containers - unless these are refillable or recyclable
• General value added tax (VAT)

As noted, Finland’s alcohol retailing is a virtual state monopoly via the specialist trading company, Alko.

Alko is regulated to operate fairly and transparently. It does not produce any product or market its own brand. It purchases product from domestic and foreign producers (and distributors) and the purchasing, listing, delisting and pricing criteria are designed to be impartial and non-discriminatory.

(Source: Alko)

Industry standards

Finland is a member of the European Union (EU). EU labelling requirements across most products, including alcohol, is detailed and specific.

EU labels require all mandatory information with the exception of the importer’s name, address and lot number to be in the same field of vision (SFV), ie. the consumer must be able to view the mandatory information without turning the bottle.

For wines described by geographical indication, the mandatory information required in the SFV is as follows:

• The geographical indication
• The alcohol statement – written as xx.x% vol. or alc. xx.x% vol. (minimum height: 3 millimetres for 750 millilitres)
• The volume statement – Only metric quantities permitted (minimum height: 4 millimetres for 750 millilitres)
• Country of origin statement – the use of ‘Australia’ as the country name (not ‘Australian’) is mandatory. This statement must be separate from any geographical indication claim and cannot be incorporated with a state or region

For wines not described by a geographical indication (remember, if no geographical indicator, then no variety or vintage), the mandatory information required in the SFV is as follows:

• The alcohol statement written as xx.x% vol. or alc. xx.x% vol. (minimum height: 3 millimetres for 750 millilitres)
• The volume statement (minimum height: 4 millimetres for 750 millilitres)
• Country of origin statement – the use of ‘Australia’ as the country name (not ‘Australian’) is mandatory
• The word 'wine' is mandatory for products not described by geographic indication

EU regulations specify that when detailing the importer on the label, the country must be indicated either by full name or by the postcode of the local administrative area. Therefore, a label for an Australian wine for sale in the UK could state the name of the importer and postal code only. In accordance with normal trading practices, if the importer then wanted to send a consignment to another EU member state, there would be no need to change the label.

Australian suppliers should consult with Austrade or the Australian Wine and Brandy Corporation to determine the precise standards that apply.

(Source: Australian Wine and Brandy Corporation)

Marketing your products and services

Market entry

As noted, Alko is the sole operator of retail outlets in Finland for alcohol products with alcohol content over 4.7 per cent. It is strongly recommended that Australian suppliers familiarise themselves with Alko's listing procedures before making direct contact with Alko.

Each month Alko calls for ‘service products’ to supplement its general selection range. Service products are with low-volume sales, which Alko stocks to ensure that its range of wines is diverse and representative.

Service products are selected through a process of competitive bidding for a maximum of three years at a time and those that sell well stand a chance of becoming part of Alko's general selection.

Alko specifies the service products in demand, for example:

• Product: White wine
• Country of origin: Australia, New Zealand or Germany
• Wine Type: Riesling with screw cap
• Bottle size: 0.75 litres
• Estimated sales: 800 bottles per year
• Retail price: €15-20

Interested suppliers are advised to check Alko's website where specifications for service products are published.

Austrade in Copenhagen offers Australian wine producers and exporters the ability to save time, money and reduced risk. We also offer the possibility of a head start in the Finnish market by:

• A knowledge of the Finnish wine market
• A network of wine importers and key wine industry players
• Access to databases, industry directories and membership associations
• The ability to assist in problem solving if required

Distribution channels

The distribution trade has undergone radical change since Finland became a member of the European Union. The import, wholesale and production monopolies, previously held by the Alko Group, have now been abolished and the market opened up to competition.

There are currently more than 150 licensed importers who supply to Alko and licensed premises either direct or via other licensed wholesalers. Alko imports certain wines directly from producers, in cases where it is felt that the producer is capable of servicing the Finnish market directly in terms of product launches and media contacts.

These arrangements provide enhanced opportunities for marketing to restaurants. However, the retail trade – which accounts for the vast majority of table wine sales – has not changed. The wine must be listed and sold through Alko’s retail monopoly.

Transport

Finland is easily accessible from Norway, Sweden, Russia and Germany, with its major cities all in close proximity to other European hubs. The eastern Finnish border is also the European Union’s only common border with Russia.

Helsinki-Vantaa International Airport is the busiest of Finland’s 21 airports. It handles around 500 flights daily.

The country boasts an excellent road network and two international highways, as well as a huge network of lakes, waterways, canals and sea lanes.

Surface shipping to and from the Nordic region is by car-ferry and container ships, with the frequent daily ferry services between Helsinki and Tallinn. Despite the country’s northern location and long winter, its harbours are open all year round.

Links and industry contacts

Wine–related resources

Alko Group – www.alko.fi

Government, business and trade resources for Finland

Finnish Government – www.valtioneuvosto.fi/etusivu/en.jsp
Finnish Customs – www.tulli.fi/en/index.jsp?language=en
Invest in Finland – www.investinfinland.fi