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

2. 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.

3. 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

4. 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.

5. 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

6. 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.

7. 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

8. 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

9. European freetrade 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

10. The example Thailand The negotiation process for EU-ASEAN FTA (Region-to-Region) came to a frozenstagefewyearsago. Then EU changedits position to pursue FTA for each ASEAN contry (Region-toGovernment), includingEU-Thailandone. 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 havehigherincome and taste; preferringinternatinalbrandesbeveragesthandomestic The implicit message from EU is ’No alcohol – no negotiation

11. TOPICS • Basic Background Data • The Nordic Solution • Last years

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14. TOTAL: • Population: 19.8 million • Consumption per capita*): 7.7 • Sales volume: 626 million liters • Turnover USD 7bn • Skriv tekst her… *) 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 • Skriv tekst her… *) Registered and unregistered consumption of pure alcohol, 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 % • Age limit: 18 years • Consumption per capita*): 7.0 liters • Sales volume**): 1,846,000 liters • Turnover: USD 23,000,000 • Skriv tekst her… *) Registered and unregistered consumption of pure alcohol, including tax free, own brewing and smuggling. *) Including beer < 4.75 alc %

17. NORWAY: • Population: 4,830,000 • Name: Vinmonopolet • Opinion support: 56 % • Customer satisfaction: 88 % • Age limit: 18 / 20 years < 22 alc % > • Consumption per capita*): 7.8 liters • Sales volume: 73,830,000 liters • Turnover: USD 1,828,500,000 • Skriv tekst her… *) Registered and unregistered consumption of pure alcohol, including tax free, own brewing and smuggling.

18. SWEDEN: • Population: 9,256,000 • Name: Systembolaget • Opinion support: 64 % • Customer satisfaction: 77 % • Age limit: 20 years • Consumption per capita*): 7.1 liters • Sales volume**): 417,267,000 liters • Turnover: USD 3,236,100,000 • Skriv tekst her… *) Registered and unregistered consumption of pure alcohol, including tax free, own brewing and smuggling. *) Including beer < 4.75 alc %

19. FINLAND: • Population: 5,326,000 • Name: Alko • Opinion support: 72 % • Customer satisfaction: 85 % • Age limit:18/20 years < 22 alc % > • Consumption per capita*): 8.5 liters • Sales volume: 112,225,695 liters • Turnover USD 1,632,700,000 • Skriv tekst her… *) Registered and unregistered consumption of pure alcohol, including tax free, own brewing and smuggling.

20. Registered alcohol consumption in Europe, Canada and the USMeasured in liters of pure alcohol consumed per capita in a given year, according to the most recent data from the WHO (source: Wikipedia)

21. EU / EEA • 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

22. TOPICS • Basic Background Data • The Nordic Solution • Last years

23. The Nordic SolutionStrong focus on restrictions • 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.

24. The Nordic Solution… and customer service Fierce internal competition Store of the year Balanced scorecard Mystery shoppers Strict productivity goals Limiting harm while providing outstanding service Outstanding customer service Service Standards. Meeting customer need based on expert advise. Education of staff Modern shop-concept Tidy self-service stores Modern and responsible image Nice ambiance Broad product range Depth and breatdh All wine regions represented Profitable Product quality Corporate Social Responsibility Absence of profit motive. Ethical Trade (Nordic cooperation) Environment. Mulitichannel retailing Integratedmultichannelconcept Easy to shop Easyyonavigate

25. Our stores … ATVR, Iceland Systembolaget, Sweden Alko, Finland Vinmonopolet, Norway Rúsdrekkasøla Landsins, The FOE

26. The Nordic SolutionWhy do we succeed when being monopolies? • 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

27. Customer satisfaction

28. The Nordic SolutionWhy do we succeed when being monopolies? • 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

30. Examples on campaigns • Finland: http://www.lastenseurassa.fi/index2_sv.html • Norway: http://www.viktigbeskjed.no/http://www.alderskontroll.no/ • Sweden: http://www.systembolagetkampanj.se/forskarrapport/

31. The Nordic SolutionWhy do we succeed when being monopolies? • 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

32. Opinion Support for the Monopoly Arrangement

33. TOPICS • Basic Background Data • The Nordic Solution • Last years

34. Distance Sales • 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