There are some misunderstandings about how prices are set at Alko, but prices are actually defined by a fairly straightforward formula: market costs + alcohol tax + Alko’s profit margin multiplier + bottle deposit for recycling fees + VAT = product price.
Type of beverage | Factor |
Vodkas, clear spirits (gin, etc.)> = 15% vol | 1.56 |
Other spirits (cognac, whiskey, rum, etc.)> = 15% | 1.50 |
Strong wines (Vermouth, sherry, etc.) | 1.54 |
Red wine | 1.54 |
white wine | 1.54 |
Rose | 1.54 |
Sparkling wines | 1.54 |
Other mild wines | 1.54 |
Cider | 1.54 |
Long drinks | 1.81 |
Beer | 1.67 |
Non-alcoholic (mixers, beers, wines, etc.) | 1.54 |
Typically, the Helsinki Metropolitan Area has a much higher price than in a smaller city, but Alko keeps the prices in Helsinki the same as in the smallest city in Lapland, so you can be sure that you will not lose better trade elsewhere.
“Combined prices have a couple of reasons. Firstly, the Alcohol Act states that the monopoly must make decisions on the listing of products and also on pricing, and that prices must be objective, transparent and equal in geographical areas. There is a company-based reason for this too. We are a centrally operating retail chain and we want to serve our customers evenly throughout Finland, and we have an online store, so we have to keep prices constant. ” Jussi Tan, Alko Oy ‘s selection and product development manager, explained why it makes sense for Alko to keep prices the same throughout Finland. “Finnish customers are looking for good value for money.”
When asked which products met that value for money, Tan warned that Alko could not recommend individual products “in order to maintain neutrality.” But he explained which price ranges might be a good indication of a good deal.
“The alcohol tax is the same regardless of the price of the product,” Tan explained, “it’s based on the amount of alcohol in the product. So a € 100 wine bottle has the same tax as a € 20 wine bottle. But the pricing factor dictates ”
There are also no tariffs on products imported from the European Union, so they can be competitively priced even compared to retailers in their country of origin. “There are examples of very high quality wines,” Tan said, “hundreds or thousands of euros – where they are up to fifty percent cheaper than they would be outside Finland.”
The monopoly also gives Alko leverage to buy products from the market, but paying the lowest price for a product is not Alko’s ultimate goal. Rather, Alko has a responsibility to ensure that their products secure a healthy supply chain. Tan describes how Alko acquires a new product from their product range. “When we’re looking for a new product, we publish a list of specifications like red wine, country of origin, region, maybe grape or variety, and certain characteristics like taste profile and whether it’s organic or not. Similarly, we list the price point we’re looking for, say 14 euros.”
Alko always researches prices to make sure the price is right. “It’s noteworthy that we’re not trying to strive for the lowest possible price,” Tan said, “because one of our main responsibilities is to ensure fair and reasonable compensation for agricultural workers and all people in the supply chain.”
With this in mind, consumers can be confident that their purchases are both ethical and competitive. “As a reseller, we have our own costs that we cover by our margin,” Tan said, “but of course the nationwide retail chain will effectively cover our overhead costs.”
Converted into euros, all taxes added, prices at the Swedish and Pennsylvania wine monopolies and from Estonia’s Viinaranta look pretty similar to Alko’s prices, at least as long as you treat yourself to a nice bottle of champagne to celebrate the end of 2020. Here are some champagne price comparisons for New Year’s toast:
Champagne | Alko (Finland) | Systembolaget (Sweden) | Fine wine and good spirits (Pennsylvania) | From the beach (Estonia) |
Veuve Clicquot Brut(750 ml) | 51.50 | 52.65 | 51.02 | 52.79 |
Bollinger Special Cuvée Brut (750 ml) | 59.80 | 58.05 | 57.63 | N / A |
Taittinger Brut Reserve(750 ml) | 49.99 | 51.07 | 52.83 | 46.79 |
Perrier-Jouët Brut (750 ml) | 49.99 | 53.98 | 51.87 | 47.99 |
Moët et Chandon Brut (750 ml) | 49.91 | 50.99 | 45.70 | 44.39 |
Tristan Reid
Helsinki Times
Source: The Nordic Page