Tuesday, April 15, 2008

Monopoly

Ive been off for a couple of weeks while I visited my folks in Oslo (my old man works for the Foreign Office). Had a great time just chillin and visiting a few museums. We didnt eat out much because its very expensive in Oslo and I would hazard a guess to say in the rest of Norway as well. Sales tax equates to about 25% (compared to 17.5% in the UK) so thats surely a part of it. Whilst on a trip to the local supermarket with my mum, we passed the Vinmonopolet which is the state off-license. Like the rest of the Scandanavian countries Norway operates a state controlled liquor monopoly. Folks can buy beer from the supermarkets but anything stronger must be bought through the Vinmonopolet. So me being me, we had a quick shuftie around. I must say that the selection was quite poor compared to what is on offer here in the UK. The range was heavily favoured to Europe, with a supermarket selection of Aussie and American wines (ie huge conglomerated brands - Hardys, Gallo, Lindemans, etc etc). The prices seemed quite steep, on a par with what I charge in the restaurant, so thats a reasonably steep price for a retail outlet. When you consider that being a monopoly they should have quite some purchase power I kind of found it really strange. I wonder if there is a reason the booze is so expensive, perhaps anyone from Norway might be able to answer.

3 comments:

Mark V Marino said...

Seems there is not fairness in monopoly

grazza said...

I think that that is a pretty fair comment. While there can be some advantages to a monopoly supply - bulk purchasing = bigger discounts, the fact that you have no competition to encourage fair pricing effectively means that you can then charge whatever you like. I know that in Canada for example, the individual states operate a monopoly and one of the largest purchasers of wine in the world is said to be the LCBO (Liquor Control Board of Ontario (correct me if Im wrong anyone))I havent read many complaints about their pricing, although there are some grumbles about their selections.
I cannot profess to be knowledgable about economics, but I know that it is sometimes quite difficult to take an objective view about a different market when I come from a very open market with lots of competition. I dont know any norwegians to ask their opinions of this and whether they feel they get a raw deal.

Peter May - The Pinotage Club said...

In the same way that the UK loads tax onto wine to discourage 'binge' drinking, cost plays a part in Scandinavia in keeping the populace from the evils of drink.

The most discouraging thing of all about monopolies (& I worked in Sweden with the dreadful Systembolaget and experienced Ontarios' LCBO) is that once you've seenthe range, you've seen teh range for theentire country.

Not like here. If you can't find what you want in Tesco, try Sainsbury, then try the little shop and the specialist wine shop. And every town you go to you look in the local wine store to see what wines they've got.