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| June 12th 2007 |
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| Finlandīs northern lights |
by Mikko Montonen
The Finnish wine market once consisted of little other than Bordeaux. Today, most of what is consumed comes from Chile, Spain, Australia and South Africa. Diversity has long entered the wine glasses in Finnland, observes Mikko Montonen.
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 Like its Scandinavian neighbour Sweden, the wine retail market in Finland is still run by a government monopoly through which 90% of all wines pass. Restaurants, on the other hand, are free to purchase their wines as they choose, generally directly from importers. In addition to importers there are agents who communicate between the producers and the retail monopoly, but they appear to be a dying breed. Some worry that that may soon be said of importers as well. In this spring’s general election, the current government made noises that are very reminiscent of Prohibition. At the very least, they are planning to raise duties and taxes, which, along with those in Ireland, are already the highest in the European Union.
The wine boom in Finland began in the mid 1980s. Since then, sales have grown year-on-year, even during the depression of the early 1990s and when the introduction of the Euro caused average prices to rise. Over that period, sales of red wine have increased to the detriment of the off-dry white wines that were once so fashionable.
Due to Finland’s cool climate, the rich Chilean and Spanish reds are doing well. As elsewhere, consumers like their fruity, easy drinkability. In fact, the more readily accessible wines of the New World have contributed to lifting consumption from 5.5 litres per capita in 1990 to 12 litres today. In greater Helsinki, consumption is 35 litres, higher than that of some European wine-producing countries. Outside of Helsinki most wine sales occur in Lapland, purchased by tourists from Helsinki and abroad. Peak seasons there are the early spring for skiing and summer for the midnight sun, understandably both suitable settings for a fine bottle of red wine. For those wines sold in large volumes, advertising has become very important, and it really does make a difference, as does promotion. Spain was active in the late 1980s, with very positive results. Sometimes small efforts can make a difference: South Africa had a former ambassador who energetically promoted his country’s wines. He was the right man at the right time, and made a lasting impact.
Often, though, a lack of market knowledge can be expensive, as the Chileans learned several years ago when they organised an out-of-town location for their tasting on a Friday afternoon in summer, when most Finns are at their country houses. But doing nothing can be even worse, as the French discovered. After suffering, they learnt their lesson and are now active again. Germany, which used to be a major exporter to Finland, is now the most dormant of the European wineproducing countries.
The first road to market for many aspiring producers is the ViiniExpo, a wine fair held each March since 1993. As more and more importers hold their own mini-fairs, ViiniExpo has begun attracting a greater number of consumers, in addition to members of the wine trade. This year the fair welcomed about 8,000 visitors, of which about half were from the trade. Given the state control of the retail sector, |
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fine wines are more often seen in restaurants than in shops, where promotions remain popular. The best selection is probably found at Chez Dominique, a Michelin two-star establishment in Helsinki whose experienced sommelier, Pekka Koiranen, also manages the restaurant.
As merely garnering a listing at the monopoly does not guarantee sales, the influence of the press, be it Helsingin Sanomat or Juomanlaskija, on entry-level budget wines is especially strong. In the shops it is important to ensure that your wine is properly displayed. “As the wines are displayed alphabetically, Argentina and Australia rule,” sighs Paavo Korpikuusi of Altia, Finland’s largest importer, “because customers visit the shops amazingly quickly, grab a bottle and go. Our producers from the United States are not pleased, as they are at the end of the line”.
Nor are the staff always well-trained and motivated. A colleague remembers visiting the retail monopoly in the late 1980s and asking for a New Zealand Sauvignon Blanc. At that time, all sales were over the counter. He was at first told that they didn’t have it. When given the product number in their catalogue, they complained that it was in the cellar and would have to be fetched. Fortunately, situations like this are seldom today, but the type of knowledgeable, highly motivated salesman one would expect to find in London or Paris is a rarity. “Interestingly”, notes Korpikuusi, “the authorities now want the back label to explain in Finnish that wine contains sulphites. This means that they consider wine as a normal food product and not alcohol.” That restriction, however, has a downside. As Kim Moliis of VinDirekt notes, “This unfortunately gives Finnish bulk bottlers a boost over small European producers.”
“The monopoly makes it difficult to sell speciality wines,” he adds. “Restaurants want money to get listings, and the competition is very hard. When Altia is privatised, that will be the end of the retail monopoly.” Interestingly, there are rumours that Altia is to buy the Swedish government company Vin & Sprit, which produces Absolut Vodka.
Hartwa-Trade, owned by Scottish & Newcastle, has just released a sort of wine cooler that is sold in every outlet in Finland, including Lidl. This comes in a sweet white and a rosé version, with an alcohol content of only 4.7 %. A red will follow in the fall. Produced by Grands Chais de France and sold in two-litre bag-in-boxes, which represent a third of the market, the coolers are expected to be rolled out in the UK later this year. Launched with a €500,000 marketing campaign, expected sales for this year alone are one million litres, a major volume in a wine market estimate at only €430 million. Still, as the average consumer doesn’t know much about wine, brands and marketing are very important. J.P. Chenet’s bag-in-box Merlot has a very loyal following. “Brand is a statement |
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of quality,” says Tallqvist. “Now we are looking for a new Chilean producer, but trends have changed and will move on again. The Finns are very much into international trends and the average price is increasing.” According to market research, 48 % of Finnish women and 70 % of Finnish men are willing to buy the newly released bag-in-box.
“The number of bottles with screwcaps in the category below €10 has almost doubled over the past few years,” observes Paavo Korpikuusi of Altia. “We used to have wines returned as corky, but screwcaps have changed this. Very often, the packaging is innovative as well, which encourages consumption among the young. I can even imagine a day when wine will appear in cans”. For youngsters and even some middleaged Finns, wine belongs at the dinner table. For the previous generation it was and still is a celebratory drink. Finnish cuisine has taken its influences from Russia, Sweden and France. Although the combination is not always easy for wine, Riesling works beautifully. However, it is not the Germans, but the Australians and Austrians who are bringing it back to fashion.
For importers, there are two roads to market. The large importers with volume wines feed the monopoly. Altia, distiller of Koskenkorva and Finlandia Vodka, is almost alone in this category. The small importers, with higher quality producers, sell principally to restaurants. Tampereen Viinitukku and VinDirekt are traditionally the two best-known companies in this business, but the Swedish company Fondberg recently entered the fray and has begun to change the playing field. Over the ebullient mood in some quarters, there hangs a dark cloud. On the most recent visit to Finland of the Russian president Vladimir Putin, the Prime Minister, Matti Vanhanen, served soft drinks with lunch, not wine or vodka. Like George Bush, he is a teetotal. As long as his ruling party does not oblige the populace to share his convictions, the wine market in Finland will have a future as rosy as the midnight sun.
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