General market information
Finnland is a severeign state in Northern Europe. Finland's population is 5.5 million (2016), and the majority of the population is concentrated in the southern region.
- Capital- Helsinki
- GDP - $251.481 billion
- Currency- Euro (€)
In Finland, there is an alcohol monopoly.
What is an Alcohol monopoly:
An alcohol monopoly is a government monopoly on manufacturing and/or retailing of some or all alcoholic beverages, such as beer, wine and spirits. It can be used as an alternative for total prohibition. They exist in all Nordic countries except mainland Denmark (only on the Faroe Islands), and in all provinces and territories in Canada except Alberta.
How does the monopoly work in Finland?
In Finland, the state owned monopoly is called ALKO, which was founded in 1932. Alko is tasked with the retail sale of beverages containing more than 4.7 % alcohol by volume.
The only exception is local produced beverages that can be sold, by the farmer, but only with alcohol content maximum 13% alc. vol. Since Finland is a part of the Euro zone, Alko purchases and sells all products in euros.
Alko is an independent company owned by the Finnish state and administered and controlled by the Ministry of Social Affairs and Health.
ALKO has distribution network of over 350 stores and over 60 pick up points which cover the whole of Finland. Via the webshop, the range of more than 5,000 products is accessible to all Finns, with just a few clicks.
Age limit- In order to purchase and consume alcohol with an alcohol strength of 22 % alc. Vol. or lower, the age limit should be a minimum of 18 years. Apparently, in order to purchase and consume an alcohol beverage with an alcohol strength of above 22% alc. Vol, the age limit should be a minimum of 20 years.
Marketing of Beverages with an alcohol content of 22% or more is not permitted. Moreover the marketing of alcoholic beverages with a less volume have many regulations and restrictions.
Domestic Alcohol Policy - Finland
- By limiting the alcohol distribution and its availability, the domestic policies try to control the level of consumption.
- In 1995 Finland became a part of the European Union and due to this, more liberal policies conducted which resulted in an increasing consumption of alcohol beverages.
- The Finnish citizens are leading in the Nordic countries on the basis of per capita consumption.
- In terms of market trend you see the same trends as in Norway and Sweden, where wine increase its market share while stronger beverages lose market share.
- Beer keeps steady on its market share with not many changes.
Tender Process Finland
What is a Tender?
Tender usually refers to the process whereby the government invites bids for large projects that must be submitted within a finite deadline.
Therefore, tendering is a process of making an offer, bid or proposal or expressing interest in response to an invitation or a request for tender.
Future tender offers are usually widely advertised to offer opportunities to a number of suppliers, encourage competition and provide a greater pool of offers to select from.
Same happens in case of alcohol monopoly. The monopoly releases tenders which have a specific tender number. These tenders include all the information of the product and the requirement.
- Product specification,
- Price point,
- Quantity demanded
To understand what are the components of tender, follow the link (Link to read about Tender).
The tender process consists of 8 stages:
- Understanding the requirement
- Finding the interested partners (producers)
- Gathering information
- Handing over of information
- Written proposal
- Sample Request
- Declaration of Results & Feedback
You as consultant play an important role in the first 4 steps of the process.
Understanding the requirement:
- In this first step, you will receive the information about the tender.
- The tender is in form of pdf.
- To understand the tender better, visit the link.
- After reading the provided information on the website as well as the information we provide. You will understand your role and what Alko is looking for.
- You will get suggestions from us which you can use to gather information (The suggestions will include information which is needed to find the suitable producers).
- You will get our company information and the details which can be shared with the producers.
Finding the interested partners:
- Start off your research by creating a list of potential suppliers to approach (help can be provided if you are slow in the start)
- Approach first on telephone in order to get details of the person to speak to in supplier organisation.
- Approach on email or phone to correct contact person in the organisation and present the given opportunity.
- The supplier can meet the particular call of tender presented. All aspects examples: Vintage, Price point, And all other aspect presented about the tender
- That the supplier is not currently working with a contact in our market and is keen to establish a contact with a new importer.
- That the supplier understand that the request is for a call of tender for distribution via Monopoly distributor. Also explain that it is a certain process to start and sell, more information will be provided to you.
Handing over the information
The information you collected as a consultant has to be handed over to us. Our team will process the information and follow the further steps of the tender process. When you hand over the contact to us you should have the attachment filled out for each supplier contact which must be confirmed by supplier with a signature.
The information you share has to be in the given format as per the links above.
Step 5-9 page
The following page consists of the steps which will be performed after the information has been submitted. It is essential for you to know these steps. It not only helps in understanding the whole process of Alko but also will help you as a consultant to get informed about the tender process.
For example- When you establish a contact with a new supplier and the supplier asks you some questions to get some knowledge of the tender process. You can answer the questions as well as forward the pdf files to them.
It is crucial to provide the supplier the right information and make them understand the tender process. The tender process in these markets is not common and people are not very familiar with them.
The supplier must be informed that the process starts with a written proposal and involves the further steps. The purchase can only be made If the product wins the tender in the blind tasting.
On terms of the tender process, the written proposal is the first stage of the tender process. In order to apply for the tender, the offered product must match the requirements as mentioned in the tender. After this fulfillment the producer can apply for the tender through an importer.
The deadline for the written proposal is mentioned in the tender.
Make sure that what you intend to propose corresponds to what Alko is asking for. All the criteria are important although some criteria could be discussed, for instance, the price point. The producer can always ask questions regarding it.
The following information must be kept in mind:
- All the compulsory information must be filled.
- Authorization form must be filled and signed.
- A copy of the organic certificate must be provided for organic products.
- The product must be described and additional awards must be mentioned on the form.
- A photograph of the bottle.
- Please keep in mind that the reference number of the tender appears in the email.
- The paperwork and the instructions to fill the form will be sent in by the importer. The paperwork does not take too long. After the form is received the purchase team checks the form and provides follow ups or feedback on the missing information.
- It is very important that all the information required is filled. Once all the information is filled in, the written proposal can be submitted to Alko.
After the written proposal form and the other documents have been submitted. Alko goes through the information and informs the importer whether they will like to continue the process and taste the product. In that case, samples are needed by Alko for a tasting.
The importer sends the information to the supplier about:
- The number of bottles needed for the tasting.
- Deadline date.
If something is wrong with the samples, the supplier is notified by the importer.
An email is send to confirm the receiving of package. The importer submits the samples to the monopoly.
For wine, the following information is important:
- The wine must be stabilized and filtered. It should be a finished product.
- A wine that is not finished will have less chances of performing well in a blind tasting.
- The wine must be the same in both taste and on sensory analysis as the wine that will be launched in the later phase.
- It must be the same vintage as offered.
The samples are sent to Alko as soon as the samples are received by the importer. The process is cancelled if the samples are unable to reach on time. Alko does not accept the samples after the deadline.
About the tasting:
- The tasting is done by the tasting panel at the headquarters.
- Tasting is held blind.
- Tasting panel consists of the buyer and 2 other tasters.
- The tasting process is in form of pre tasting and the final round.
- The description of the characteristics should be considered very important as the tasting procedure is not only on the basis of quality but also depends to what extend the tasting profile sheet meets the requirements.
*Alko always provides the characteristics (tasting profile) for each tender. The information can be found on the tender. The described characteristics (tasting profile) of each product must be matching the demand.
Declaration of Result and Feedback:
After the tasting, the result is sent by Alko to the importer. Other information which is provided to the supplier would be:
- The number of participants for each tender.
- Who won the tender.
- The score of the product as well as the instructions to understand the score.
In this stage, if the product is selected, the supplier is notified and further information about the contract, date of launch etc is shared.
If a supplier is not able to win the tender, a feedback is provided by the importer. This is helpful for future tenders and gives knowledge to the producer about the market and the tender process.