Dramstad and Juslin: Restricting foreign-based online alcohol retailers is better than allowing profit motives into alcohol sales

The proposal to allow online and producer sales of alcohol on Iceland risks clashing with EU-law and the Icelandic Minister of Justice should consider other options, write Kalle Dramstad and Emil Juslin, Brussels-based experts on EU alcohol policy.

Kalle Dramstad, Head of European Policy and Emil Juslin, European Liaison Officer at the Brussels office of the Swedish organisation IOGT-NTO show that recent court rulings in Sweden and Finland demonstrate that stopping foreign-based online alcohol retailers is possible and can ensure a level playing field whilst protecting the ATVR alcohol retail monopoly and public health.

“Reading the recent proposal for changes to the Icelandic alcohol law, we note that public health impacts assessments are incomplete and important alternative policy options are missing. Allowing private profit incentives into alcohol retail sales comes at a well-documented cost to the well-being of individuals, families and local communities. We hope the Icelandic Justice Minister will reconsider and reorient the proposal,” authors write.

Dramstad and Juslin list three main reasons for keeping the current system and for restricting foreign-based online alcohol retailers.

“First, one of the main arguments raised for allowing online and producer sales of alcohol is that foreign producers can sell their products through foreign private online retailers, putting local Icelandic businesses at a disadvantage. However, experiences from Sweden and Finland show that it is possible to restrict foreign based online alcohol retailers: In 2018, Finland had their ban on online sales of alcohol, including from other EU-countries, upheld by the Finnish High Court, after a supportive judgement in the European Court of Justice. Similarly, a Swedish court recently banned a foreign based private online alcohol company from targeting Swedish consumers. The principle is clear: the retail monopoly can and should apply online just as it does offline.”

“Second, we note that references are made to the growth of alcohol tourism. However, the proposal of a broad strokes privatisation of online retail alcohol sales is not a precondition for a successful tourism sector – quite the opposite. Even for alcohol tourists, a trip to the local monopoly store after a tasting visit is part of the unique cultural experience of visiting a Nordic country. On a more fundamental level lies a question of priority: should the comfort and ease of international tourists be put in front of the health and well-being of local populations and communities?”

“Third, the Finnish producer sales law is mentioned as a model to follow. It is worth noting that it has not been tried by the European Court of Justice and that the sale of most strong beers in Finland has already been privatised, unlike in Iceland and Sweden. In addition, online sales of alcohol are not possible in Finland, even for the privatised side of the beer market. Consequently, implementing such policies on Iceland is a gamble with the legal standing of the monopoly and the health of many Icelanders, not least vulnerable youth.”

“To summarise, the Nordic restriction of private profit motives in alcohol sales has been one of the most successful ideas in global alcohol policy. It is envied by many governments as an efficient and consumer friendly way to reduce alcohol related harm and the cost of alcohol to individuals, businesses and society as a whole. This model should be cherished and protected. For Iceland, this begins with replacing the proposals to allow online and producer sales of alcohol with a law banning foreign-based online alcohol retailers.”

Positions from Iceland

Managing Director of IOGT Iceland, NordAN board member from Iceland Aðalsteinn Gunnarsson:
Alcohol is one of the main obstacles to the sustainable development of mankind. It has a negative impact on all three pillars (environment, economy and society) and affects all aspects of society. Alcohol endangers human resources, undermines economic growth, weakens the infrastructure of society and is a burden on the health care system. I am therefore completely opposed to increased access to alcohol.”

Managing Director of the Information Center on Alcohol and Drug Prevention Arni Einarsson:
“This is another attempt to undermine a successful arrangement for the sale and distribution of alcohol in Iceland, which has resulted in lower alcohol consumption among Icelanders than in most of the countries with which we generally compare ourselves. There has been no support for repeated attempts within the Althingi in recent years to break down this arrangement and increase access to alcohol. Opposition to these experiments is based on the knowledge that increased access to alcohol leads to higher consumption and higher consumption to increased health and social problems.”