Embarrased to be a Swede again
In today's Financial Times, the Swedish state monopoly on alcoholic beverages, Systembolaget, took out a full-page ad. Systembolaget is celebrating its 50th anniversary with an open letter to the EU comission. The ad reeks of Swedish chauvinism, which is most probably no coincidence, since it seems to be directed mainly towards the Swedish establishment.
The monopoly on alcohol is becoming increasingly irrelevant. The main thrust of the argument in the ad is that high prices are good since they curb consumption. It seems true, although high prices due to high taxes also decrease consumption of other goods and make consumers worse off. However, it is perfectly possible to have high taxes without having a monopoly - tobacco seems to be doing just fine being sold over the counter in most stores.
A bit of honesty from Systembolaget's CEO Anitra Steen (who just happens to be married to the Swedish premier) is in order. The reason that she protects the monopoly is that it brings in not only taxes, but hefty profits to the owner, i.e. the state. Curbing consumption has nothing to do with it, a system of licensing would do just as well. And then we could expect all the other benefits of a real market, such as better service, better availability, more product differentiation etc. Also, we wouldn't have to spend tax money persecuting Systembolaget shop managers for accepting bribes, like we're doing right now.
But why be honest, when the money keeps pouring in?
The monopoly on alcohol is becoming increasingly irrelevant. The main thrust of the argument in the ad is that high prices are good since they curb consumption. It seems true, although high prices due to high taxes also decrease consumption of other goods and make consumers worse off. However, it is perfectly possible to have high taxes without having a monopoly - tobacco seems to be doing just fine being sold over the counter in most stores.
A bit of honesty from Systembolaget's CEO Anitra Steen (who just happens to be married to the Swedish premier) is in order. The reason that she protects the monopoly is that it brings in not only taxes, but hefty profits to the owner, i.e. the state. Curbing consumption has nothing to do with it, a system of licensing would do just as well. And then we could expect all the other benefits of a real market, such as better service, better availability, more product differentiation etc. Also, we wouldn't have to spend tax money persecuting Systembolaget shop managers for accepting bribes, like we're doing right now.
But why be honest, when the money keeps pouring in?
posted by Hugin at 20:20
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