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Corruption in Sweden

It’s a short flight from Helsinki to Stockholm. You’ve barely shaken off the aftermath of the fiesta with the Finns before you have to do it all over again with the Swedes. There is little glamour in Export Sales. It’s more like being on an episode of Survivor for 4-6 months a year.

But Stockholm has a certain charm. Beautiful architecture, more vibrant and modern, and the people are much “cooler” than the Finns. There are the stereotypical guys with long blond hair, just like in ABBA, and the girls look like movie stars. Add to that their beautiful melodic language, a penchant for a glass of wine or two, and maybe a shot of vodka in an ice bar and well, there are worse places to visit than Sweden.

The market is the largest of the 3 Scandinavian countries, compared to Finland and Norway. Vodka is a staple. It’s no coincidence that “Absolute” is made in the country and yes, our dear Viking friends have a bit of a reputation for binge drinking.

The wine market has some peculiarities. One of them is that the consumption of bag-in-box is off the charts. It is an unusually high percentage of sales and this is partly because Swedes love to go off to the hundreds of little islands at the weekends and bag-in-box is more convenient to travel with. They also say that bag-in-box sales are high because people are very conscious of the environment.

Like in Finland and Norway the alcohol business is controlled by the government, through the company called the Systembolaget. So it is another Monopoly. Now, one of the key statutes of these state-run Monopolies is that they claim to be fair to all suppliers, totally impartial and independent. Everyone gets a fair crack at the business. And as part of this there are strict rules and regulations governing the behavior of the Buyers, both at the head-office and also at the store level. It is strictly prohibited for them to show favoritism to certain suppliers, and they are certainly not allowed to accept inducements like a free trip to visit a particular winery or concert tickets. Monetary bribes? Unthinkable.

That’s the theory. But the reality can be very different. When I was a sales rep in Ontario my agency spent all day piecing off store managers with golf games, long lunches, branded clothing, and even teddy bears for the kids. Bottles of wine were routinely deposited into the trunk of cars, and keys returned to the store manager. I dare not say right now what happened at the head office level, but some high profile Buyers have certainly been terminated over the years.

You see it is a false expectation to believe that a Buyer won’t show favoritism to a certain supplier, and it can be a very grey area around some of the inducements. Let me try and dream up an example… A major supplier puts on a lavish 3 day “education” conference in, shall we say, California. Key media and major restaurant Buyers are invited, and so are the Buyers for the Monopoly. It’s education after all, and so this should have a benefit to the Buyers ability to select the right products for his customers. But, in my mind, where it comes off the rails is when the winery hosting the conference only focuses on theirown wines (quite naturally) pays for the airline tickets, a nice hotel, hot air balloon rides and other lavish entertainment in their attempt to “buy” the Buyer. Mmmmmm.

Back to Sweden. Wikipedia says, and I presume it is true:

The corruption scandal first gained widespread media attention in the autumn of 2003, with Systembolaget issuing its first press release regarding the preliminary investigations on 7 November 2003.[8] On 11 February 2005, 77 managers of Systembolaget stores were charged with receiving bribes from suppliers, and one of the largest trials in modern Swedish history followed. 18 managers were found guilty on December 19, and then on February 23 another 15 managers were found guilty.[9][10]

How’s that for some juicy reading darling?!

My trips to Sweden were great, and my own Bordeaux company would never do more than take a Buyer for dinner, partly because we didn’t have the budgets for anything more, and also because my boss had some strong ethical feelings about bribery and inducements. It was not a noble way of doing business, and his was a noble family. I’m glad that this was the case as it made my life much easier.