The cornerstone of unity

81 STATE ALCOHOL MONOPOLY
Finland established a state alcohol monopoly in 1932, after prohibition (1919-1932) ended, when it was rejected 
in a referendum in 1931. The state alcohol monopoly has not only been a Finnish innovation; similar monopolies 
can be found in other Nordic countries except Denmark, in a number of states in the USA, and in some 
provinces of Canada. What is peculiar to Finland is what happened before and after the establishment of such a 
monopoly.
The idea behind a state alcohol monopoly is the belief that alcohol-related harm can be effectively regulated 
by controlling the availability of alcoholic beverages. In many countries, in different times, a state monopoly has 
been an effective means of regulating the aggregate consumption, and thereby decreasing alcohol-related public 
health problems as well as disturbances in social relations and public order. There is a vast amount of research 
literature to support this view, although not without variation in interpreting the results. Such a variation is a 
normal phenomenon in all scientific research. In addition to control of availability, price regulation through special 
taxes is another effective means of reducing alcohol-related problems. Other arguments in favour of the 
monopoly included, the elimination of private profit from the manufacture and sale of a potentially detrimental 
commodity, and the hidden arguments of monopoly as an effective tax-collecting tool and as a means to 
respond to some industrial policy problems played a role in the early stages.
Prior to 
the opening of monopoly shops on 5 April 1932 at 10 o’clock (note the countdown 5 4 3 2 1 0), 
Finland enjoyed years of prohibition. The Prohibition Act was approved by Finland’s first modern democratic 
Parliament in 1907 (innovation no. 1), but due to various delays in the Imperial Russian administration, to which 
Finland was bound as a Grand Duchy in the Russian Empire, it was not enforced until 1919, after Finland had 
gained her independence. The experience of prohibition was mixed. Negative aspects included an increase in 
smuggling and organised crime, together with a rise in crime in general, but on the plus side there were some, 
although not too many, improvements in general health and social life. One reason for the lack of dramatic 
improvements may be that alcohol consumption wa at a low level in Finland already before prohibition was 
introduced.
After the establishment of the monopoly the availability of alcohol was restricted, especially in the 
countryside where there were no monopoly stores. The exceptional conditions produced by the Second World 
War led to a special system to control individual consumers’ purchases. This, like some other monopoly 
activities, was based on the belief that control is a good way to prevent problems. After more than 10 years of 
client control the system was abandoned after studies showed that its effects were neglible. The next major 
innovation within the monopoly system was the alcohol reform of 1969, which included the creation of a new 
outlet for been, which could be now purchased from grocery stores and cafés, and the granting of permissions 
for monopoly stores to open up in the countryside. The reform resulted in a gigantic increase in alcohol 

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consumption and alcohol-related harm in the 1970s, an event that surprised all the planners of reform who had 
expected that better availability of beer would lead to reduced consumption of stronger beverages and more 
moderate drinking patterns. The experience of the early 1970s showed that the control of availability of 
alcoholic beverages has a strong impact on the prevention of alcohol-related harm. It was however politically 
impossible to return to a more restrictive control system.
Today the state Alcohol Monopoly is still working although Finland joined the EU in 1995, gaining official 
acceptance in Brussels on the basis that its aim is to protect public health. There has been continuous pressure 
by alcohol industries towards further liberalisation of the system, e.g. allowing wine to be sold in grocery stores, 
but no big changes have been implemented so far.
The alcohol issue was back on the public agenda again with the alcohol taxation reform of 2004, in which 
Finland found it necessary tower alcohol taxes due to the neighboring Estonia joining the EU and also because 
EU rules required a more liberal policy on tourist importation of alcohol. Alcohol consumption and alcohol-related 
harm consequently leaped upwards, causing much concern among the general public and politicians. As a 
consequence, the tax reduction was cancelled by a stepwise procedure of consecutive tax increases.
In 2017, the Parliament is discussing the Government’s proposal for a new Alcohol Act. It would extend the 
sales of strong beer and some other beverages from the Monopoly to grocery stores. There is some dispute 
about the effects of the reform on alcohol-consumption and alcohol-related harm, most experts believing in a rise 
in consumption and harm. The government emphasizes mostly economic benefits for alcohol industries, 
employment and taxation.
The importance of the alcohol issue in Finnish politics is revealed by the fact that there have been only two 
referendums in the country since it became independent in 1917. The first one was in 1931 on prohibition, and 
the second one on EU membership in 1994. The monopoly system has faced many new challenges in the 
globalisation process, but has survived, even though Finland has been an EU member country over two 
decades.
Jussi Simpura, Research professor (emeritus), visiting researcher,
National Institute for Health and Welfare