Corruption affair challenges Swedish retail monopoly

Sven-Olov Carlsson

Towards the end of 2003 a main topic of the news bulletins was the growing bribery scandal in Systembolaget. Some eighty employees, most of them shop managers of the Swedish alcohol retail monopoly, are suspected of taking bribes.

Luxury trips to Monte Carlo, Madrid and Munich, mopeds, beautiful watches and video cameras from glossy catalogues are just some of the items that the head buyers of Systembolaget could choose as a ”bonus” for introducing the products of various alcohol suppliers to the range of goods on sale or giving them a conspicuous position in displays. Points given for sales could sometimes be exchanged for commodities or cash.

The bribery scandal which was revealed and made public at the end of the year, has astonished the Swedish media. Thirty-five of Systembolaget’s shop managers are under suspicion of serious bribery. Ten have been dismissed, although there has not yet been conviction in the courts. According to the national unit against corruption, more than one hundred people in all are suspected of taking bribes. Three suppliers of wine and spirits are included in the police investigation, one of which is under suspicion of offering bribes. The Managing Director of Systembolaget, Anitra Steen, is determined to sort out the mess which has been going on for more than ten years – although it probably escalated after suppliers other than state owned Vin & Sprit (Wine and Spirits) were allowed into the Swedish market. In an emotional letter to her employees she wrote: ”When you cut an abscess, it spills over.”

It was hoped that an internal investigation would finish its report before the end of 2003, which seemed rather optimistic. There are 1,200 employees to be investigated in the company’s own scrutiny of the bribery affair, and it is now expected that it will be finished in early 2004.

A question raised, especially by political opponents of the Social Democratic Government, is whether Anitra Steen will be able to remain in office after a scandal as big as this. Ms Steen is not only the Managing Director of Systembolaget but also the wife of the Swedish Prime Minister, Göran Persson.

So far the Board of Systembolaget has not lost its confidence in their managing director. Furthermore, a majority of the MPs in the Parliament’s Trade and Industry Committee were satisfied with the information they got during a meeting with the Minister of Trade and Industry, Leif Pagrotsky, and the Chairman of the Board of Systembolaget, Olof Johansson.

Be that as it may, whilst confidence in the company has suffered, the affair does not seem to have given the European Commission the means of delivering a deathblow to the Swedish retail monopoly.

“As far as I understand, this is a case of suspected corruption, and thus it is a matter for Swedish authorities, and not for the Commission,” says Jonathan Todd, spokesman for the Commissioner responsible for the inner market, Frits Bolkestein.

Sven-Olov Carlsson is President of IOGT-NTO.