The prices of alcoholic beverages in the Nordic countries

Apart from Denmark, all the Nordic countries have state-owned monopolies which handle all of the off-premise retail sales of wine and spirits. In some of the countries, the state monopoly also distributes strong and medium-strong beer. This paper discusses how the prices of beer, wine and spirits are set in the Nordic countries and compares the setting of prices in each. The paper shows that there are great differences both between the prices of alcoholic beverages in the Nordic countries and between the price-fixing mechanisms. The main part of the price differential is due to differences in taxation, but substantial discrepancies still exist when we look at prices exclusive of alcohol taxes. The reason for this is to be found in differences in profits and in the efficiency of producing and distributing alcoholic beverages. According to our data, it seems that some of the state monopolies are more effective than firms in the Danish market.