General market information
To start working with the producers it is very important to know the market you are working for. A deep understanding of the market situation helps you to set goals to your work and also helps in the research.
Sweden is a Scandinavian country in northern Europe. Sweden is the third largest country in the European Union is terms of Area.
- Population- 10,1 Million (2,3 Million have a Foreign background)
- Capital- Stockholm
- GDP- $542 million
- Climate- Temperate
Alcoholic beverage Market - In Sweden, 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 Sweden?
In Sweden, Systembolaget is the monopoly for wine distribution to 8 million Swedish end-consumers. Today Systembolaget is one of the world’s biggest retailers with over 400 stores and approximately another 500 distribution locations via partner stores covering all Sweden. Systembolaget’s range of selections consists of approximately 3000 different products all carefully selected via a strict purchasing process.
- In Sweden, the legal age of drinking is 18 yrs. However, to buy alcohol from Systembolaget store, a person has to be 20.
- The marketing of alcoholic beverages above 15% vol is not permitted.
- Sweden follows domestic alcohol policy. The aim of the domestic alcohol policy is to restrict the reasons of alcohol consumption. By working with higher taxation, restricted availability and informative PR, the government tries to achieve its goal. Sweden tries to maintain this policy upto 100 %.
To work with the monopoly means to have a great opportunity and great responsibility.
- It is a very great opportunity to be a licensed supplier as an import agent.
- It also means big opportunities for producer partners, but also big responsibilities. To work with Systembolaget, the producers and the importer have to follow Systembolaget’s rules and do the best to match their tenders to succeed to get into their ordinary ranges.
- Therefore it is crucial that the importer and the producer work hand in hand to achieve.
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 the monopoly 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.
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 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 Systembolaget 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.
- A copy of the organic certificate may be provided for organic products (mentioned in the tender if it has to be provided).
- The product must be described and additional awards must be mentioned on the form.
- A photograph of the label (optional).
- 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 Systembolaget.
After the written proposal has been submitted. Systembolaget 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 Systembolaget 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 Systembolaget.
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 Systembolaget as soon as the samples are received by the importer. The process is cancelled if the samples are unable to reach on time. Systembolaget 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.
*Systembolaget 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 Systembolaget 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.
How to read a tender
- Name of tender - Given on the top left side of the tender, a common name of the product demanded.
- Tender Reference - This is a code which is usually a number, used for all work related to the tender
- Monopoly - Which monopoly distributor it is, is it for Systembolaget, Alko or Vinmonopolet.
- Assortment - The type of contract and the time period of the contract.
- Distribution - The number of stores, the product will be launched.
- Deadline written offer - The last date for the submission of written offer, to read about written offer, click here (Link to step 5-7 page)
- Launch Date - The date on which the product will be launched in the market and will be available to buy.
- Characteristics - A summary of the style of the product. This includes the overall profile of the product and explains what the monopoly is looking for. The products which can be submitted for the tender must match this section.
- Product Requirements - The section below consists of all information of the product.
- Country of origin - What country the product should be from. If the data given is more than one country it means the product can be from any one of the countries.
- Type of product - What type of product the monopoly is looking for.
- Region(classification)* - Mostly applicable for wines. There are two standard methods of classifying wines - by region (eg."Bordeaux"), and by appellation (An appellation is a legally defined and protected geographical indication used to identify where the grapes for a wine were grown). In established areas (basically in Europe), wines are strictly defined by where they are grown.
- Grapes* - The grape varieties which should be in the product (wine). It could be 1 variety or more. A percentage is provided in case of more than 1. If this sub-section is missing then any grape variety is acceptable for the product.
- Vintage* - The vintage ( A vintage wine is one made from grapes that were all, or primarily, grown and harvested in a single specified year) which is demanded.
- Ex- cellar price - The net price what the importer can pay. It is per unit and not per case. The importer does not ask for any commissions on top of this price.
- Minimum volume - It is the minimum volume which the producer must be able to provide in case of winning the tender.
- Type of container - The type of container which is demanded. For wine- It could be glass bottle or Bag-in-Box. For beer it could be a bottle or a can. (Bag-in-Box: A bag-in-box or BiB is a type of container for the storage and transportation of liquids. It consists of a strong bladder (or plastic bag), usually made of several layers of metallised film or other plastics, seated inside a corrugated fiberboard box).
- Container size - The volume of the container per unit.
- Ageing* - The required ageing for a wine.
- Other requirements - Other criteria which the product has to meet. Very useful information is given in this part of the tender as each requirement has to be met or else some optional information may be advantageous for winning the tender.
*Please note: only available for wine products.