Why was the Alcohol Act reformed?
Earlier, Finland’s alcohol legislation consisted of the Alcohol Act from 1994 and 13 Decrees issued under the Act. The reform integrated the Act and the Decrees into a single Act as comprehensively as possible.
The reform was also part of the deregulation project of Juha Sipilä's Government. The earlier Alcohol Act contained some outdated and rigid regulations from the Alcohol Act of 1969 and the Spirits Act (Väkiviinalaki) of 1932.
What was the basis for the reform?
The aim of the reform was to find a balance between the reduction of public health harms caused by alcohol use and the needs of Finnish business and industries.
The main principle of the Act still is to prevent negative effects of alcohol. The basis of the reform included maintaining Alko's retail monopoly. The licencing system for manufacturing, selling and serving of alcoholic beverages has also been maintained.
Any unnecessary, obsolete or rigid regulations in the current legislation were removed, in particular regulations that burdened the restaurant sector. Provisions on alcohol serving hours and customer service in restaurants, for example, were softened.
How has the Government overseen preparation of the comprehensive reform of the Alcohol Act?
The political work on the comprehensive Alcohol Act reform began in February 2016 by Prime Minister Juha Sipilä’s Government, when Minister of Family Affairs and Social Services Juha Rehula presented his preliminary proposal to the ministerial working group on health and wellbeing. The preliminary proposal sought a balance between reducing the negative effects of alcohol and taking into account the needs of business and industries.
Next, the parliamentary groups of the government parties discussed the preliminary proposal, and key policies regarding the reform were outlined in further negotiations between the group representatives in May 2016.
In the beginning of November 2016, the ministerial working group on promotion of health and wellbeing discussed the draft government proposal for an Alcohol Act and other related Acts. The proposal was circulated for comment to all the relevant stakeholders from 22 November 2016 to 16 January 2017, and a summary of the comments was completed in March 2017.
The proposal was finalised in the Ministry of Social Affairs and Health. The government proposal on a new Alcohol Act was submitted to Parliament in September 2017. Parliament adopted the bill on 19 December 2017.
The President of the Republic approved the bill on 28 December 2017. The new Alcohol Act entered into force on 1 March 2018. Some of the amendments came into force already on 1 January 2018.
How was the reform prepared?
The reform was prepared by the Ministry of Social Affairs and Health in close cooperation with the National Supervisory Authority for Welfare and Health (Valvira) and the National Institute for Health and Welfare (THL). Expert assistance was provided by other ministries, particularly the Ministry of Justice, the Ministry of the Interior, the Ministry of Economic Affairs and Employment and the Ministry of Finance.
The Ministry of Social Affairs and Health also organised meetings with the administrative bodies, membership working groups and key persons in the Federation of the Brewing and Soft Drinks Industry, Finnish Microbreweries’ Association, Tilaviiniyrittäjät (fruit wine producers), Alcoholic Beverages Industries Association, Association of Finnish Alcoholic Beverage Suppliers, Majoitus- ja ravitsemispalvelut MaRa ry (hospitality management services), Finnish Grocery Trade Association (PTY), and Finnish Association for Substance Abuse Prevention (EHYT).
How were the impacts of the reform assessed?
The impact assessments covered, among other matters, economic impacts, health impacts and impacts on certain population groups, such as children and young people.
Allowing grocery stores, kiosks and petrol stations to sell stronger alcoholic beverages than before will generate the biggest economic and health impacts, according to estimates. It is likely that the beverage producers and sellers will reap most of the economic benefits. On the other hand, total alcohol consumption will increase when having stronger alcoholic beverages available in retail stores. It is likely that this will also increase the negative social, health and economic effects of alcohol.
The impacts of the new Alcohol Act on children were assessed in spring 2017. The central observations of the assessment were written under appropriate headings in the statement of reasons for the government proposal. The observations are to be found, for example, under items 2.1.2 Practice; alcohol-related harm by age group, alcohol-related harm to close persons, other people and society, and 4.3.1 Health impacts and social impacts; Impacts on different population groups.)
What will be the most significant changes to the retail sale of alcoholic beverages?
According to the new Act, the maximum strength of alcoholic beverages is 5.5% by volume of ethyl alcohol. The requirement for production by fermentation has been removed. This means that grocery stores, kiosks and petrol stations are able to sell stronger beers and ciders than earlier, as well as long drinks produced by adding distilled alcohol.
Independent breweries and microbreweries have the right to sell their own craft beers at the brewery. Microbreweries are allowed to produce up to 500,000 litres of alcoholic beverages. Craft beers cannot be produced by mixing beer with soft drinks, for example.
Where can I get more information, for example for my licence application?
The National Supervisory Authority for Welfare and Health (Valvira) and the Regional State Administrative Agency are in charge of the practical implementation of the Alcohol Act.
Valvira has published instructions regarding the Act and they will also supplement the instructions when necessary. The Regional State Administrative Agency will decide on applications for serving licences and retail trade licences.
You can always check first whether Valvira has published any instructions on how to interpret the Act. Then you can ask the Regional State Administrative Agency how you should proceed with your licence application.
What will happen to Alko’s monopoly status?
Alko Ltd. retained its retail monopoly. Alko is a government-owned limited liability company, which in Finland holds the exclusive right to sell alcoholic beverages containing more than 5.5% alcohol by volume with the exceptions of fruit wine, sahti and craft beers.
What does the reform mean for the sale of small-scale fruit wine, sahti and beer?
The producers of fruit wine and sahti retained their right to sell their products directly at the place of production. Fruit wine refers to alcoholic beverages produced from berries, fruit and other parts of plants (excluding grain products and grapes) by fermentation and containing no more than 13% by volume of ethyl alcohol.
The new Alcohol Act introduced the concept of craft beer that the producers can sell directly at the place of production. Microbrewery products, or craft beers, refers to alcoholic beverages produced primarily from malt by fermentation and containing no more than 12% by volume of ethyl alcohol. Craft beer also refers to gluten-free corn beers or similar and beers produced by adding other parts of plants or spices during fermentation. As previously defined, Sahti refers to traditional unfiltered and unpasteurised labour-intensive beers containing no more than 12% by volume of ethyl alcohol.
The upper limit for the production of fruit wine remained at 100,000 litres a year per producer. Microbreweries, on the other hand, may produce up to 500,000 litres a year. Another condition is that the producers are independent in relation with other producers of alcoholic beverages.
The restrictions to the production volumes and the requirement of independence are necessary to limit the extent of the exceptions to Alko’s retail monopoly. The exceptions are limited in nature, and they concern traditional and craft production. The aim is to ensure that the small-scale sales by Finnish producers do not discriminate against wine and beer producers in other EU Member States. This is based on a ruling by the EU Court of Justice (C-198/14 Visnapuu) which addressed, among other issues, the exceptions regarding the retail sale of fruit wine.
Is it possible to purchase alcohol for take-away at a restaurant?
Licensed premises, just like retail stores, can be granted a licence to sell alcoholic beverages to consumers for consumption off the premises. The sale of alcoholic beverages to customers is subject to normal retail sales norms. This means that only alcoholic beverages containing no more than 5.5% by volume of ethyl alcohol can be sold for off-premise consumption and only during the regular hours for retail sale of alcohol (from 9 to 21).
Are foreign online traders allowed to sell alcoholic beverages to Finnish consumers?
The regulations are ambiguous with regard to foreign online sale of alcoholic beverages (cross-border distance sales), and they have been interpreted by the European Court of Justice in the case C-198/2014 Visnapuu. The Court ruled that the ban in the former Finnish Alcohol Act concerning cross-border distance sales of alcoholic beverages complied with EU law under certain conditions. However, a national court of law must examine these conditions closer and issue its final ruling in the case. Helsinki Court of Appeal dealt with the case in spring 2017, but since the court’s ruling was appealed to the Supreme Court, the final, legally valid ruling in the case depends on the Supreme Court.
A working group of the Ministry of Social Affairs and Health is investigating the regulation of cross-border distance selling of alcoholic beverages, and they will draw up proposals for new provisions by 31 March 2018. In completing its task, the working group must take account of the conditions set by the Finnish Parliament. Parliament also requires that Alko will continue to have the exclusive right to retail trade in alcoholic beverages. At the same time, it must be ensured that Finnish traders are on a par with foreign sellers of alcoholic beverages.
Are consumers still able to buy alcoholic beverages from abroad?
The case law of the EU Court of Justice has even before stated that a Member State cannot prohibit consumers from importing alcoholic beverages for personal consumption. According to the EU Court of Justice, import for personal consumption is permitted if the person ordering the goods or a person unconnected to the seller transports the alcoholic beverages.
If Finnish consumers, who order alcoholic beverages from foreign online traders, want to comply with both the Alcohol Act and the Excise Taxation Act, they need to make sure that the foreign online trader does not transport alcoholic beverages to Finland and that either the seller or the buyer (the consumers themselves) pay the Finnish alcohol excise duties.
All other lines of action are in violation of the Alcohol Act or the Excise Taxation Act. It is impossible to give more precise information on the consequences for sellers and buyers until the Alcohol Act has been revised and made clearer or the Supreme Court has issued its ruling on the case mentioned above.
Several foreign online traders are advertising that the alcohol excise duties paid in France or Estonia, for example, are sufficient and that there is no need to pay the Finnish excise duties too. Are the online traders right?
No, they are not. Excise duties on alcoholic beverages, however, fall outside the scope of the Alcohol Act. According to the EU directive, only alcoholic beverages purchased for personal consumption and transported by the consumer are duty-free in this manner. Provisions on alcohol taxation are laid down in the Excise Taxation Act and the Act on Excise Duty on Alcohol and Alcoholic Beverages. These acts are the responsibility of the Ministry of Finance.
What is changed in passenger import of alcoholic beverages?
The regulations for import of alcoholic beverages for personal consumption from outside the EEA were amended as of 1 March 2018. According to the new Alcohol Act, passengers are required to spend at least 24 hours in the non-EEA country (such as Russia) to have the legal right to import alcoholic beverages. In the former Act this time limit was 20 hours.
May mobile stores sell alcohol?
The former Alcohol Act already included a provision concerning mobile stores operated by retail stores. The new Act also permits Alko to sell alcoholic beverages from its own mobile stores. The Act lays down that, in both cases, the mobile store route shall serve both permanent and seasonal residents as well as be approved by the license authority. This means that mobile stores are not allowed to sell alcoholic beverages on festivals and public events, for example, or make home deliveries.
What are the biggest changes to licenced serving of alcoholic beverages?
A single serving licence now covers all types of alcoholic beverages. The three types of serving licences (A, B and C) were abolished as of 1 March 2018. Restaurants and bars are also able to apply for a licence for retail sale of alcoholic beverages. They are able to sell alcoholic beverages on all days from 9 to 21 according to the same rules that apply to retail stores selling alcoholic beverages.
One designated adult manager must be present during each shift, according to the new Alcohol Act. There are no specific qualification requirements for the manager apart from a certificate (the so-called Alcohol Passport) confirming that the manager knows the alcohol licensing rules. Persons who are 16 years of age are allowed to serve alcohol under the supervision of the manager.
Restaurants are allowed to share serving areas. The system of temporary serving licences was replaced by a system with less administrative burden. The so-called catering permits allow restaurants and bars to serve alcoholic beverages in pre-approved business premises, venues and festivals after they have submitted notice of this to the relevant Regional State Administrative Agency.
The regular serving hours still end at 1.30am. However, serving alcohol can continue until 4.00am after notifying the Regional State Administrative Agency of the extension. Although the former licensing process was abolished, restaurants and bars have new obligations to maintain public order. Restaurants and bars are no longer obligated to close their doors after their serving hours have ended. However, they have to make sure that their customers consume their drinks within one hour of the end of serving. The authorities have the power to restrict or prohibit serving of alcohol to prevent public disturbances.
Is it possible to serve wine or strong alcoholic beverages at, for example, service stations or kiosks?
Yes, if their serving licence is valid, because one serving licence gives a right to sell all alcoholic beverages. The three types of serving licences (A, B and C) were abolished as of 1 March 2018.
Are restaurants and bars allowed to sell alcohol to consumers for consumption off the premises - when some wine is left in a bottle, for example?
No, they are not. Alko stores still have the exclusive right to retail trade in wines and strong alcoholic beverages. Restaurants and bars are able to sell alcoholic beverages in accordance with the same rules that apply to retail stores: customers can buy weaker alcoholic beverages in closed containers on all days from 9 to 21.
How were the requirements for personnel at licensed premises changed?
One designated adult manager must be present during each shift, according to the new Alcohol Act. There are no specific qualification requirements for the manager apart from a certificate (the so-called Alcohol Passport) confirming that the manager knows the alcohol licensing rules.
As a general rule, persons under the age of 18 are not allowed to sell or serve alcoholic beverages. However, persons aged 16-18 may sell or serve alcoholic beverages under direct supervision of the responsible manager.
What changes were made regarding alcohol serving areas?
Restaurants and bars are allowed to share serving areas. The system of temporary serving licences was replaced by a system with less administrative burden. The so-called catering permits allow restaurants and bars to serve alcoholic beverages in pre-approved business premises, venues and festivals after they have submitted notice of this to the relevant Regional State Administrative Agency. The serving areas will have to be enclosed or clearly marked out. Public grandstands can be accepted as serving areas if they are exclusively reserved for persons aged 18 or more.
Have Alko's opening hours been deregulated?
No, they have not. From Monday to Friday Alko stores are open from 9 am to 21 pm.
What does it mean that Alko is able to organise auctions?
Wine auctions refer to events where wines are sold to the highest bidder, as in a regular auction. Often the products auctioned off are high-priced vintage wines or other rarities. Unlike Finland, for example Sweden has even earlier allowed the organisation of wine auctions.
What changes have been made to the alcohol advertising regulations?
Restaurants are able to advertise Happy Hour discounts freely, for example on streets and in newspapers.
Producers of strong alcoholic beverages, wholesalers and restaurants and bars may present their products for example in online price listings.
Other advertising regulations relating to alcoholic beverages were not amended. Part of the advertising regulations were updated already in 2015.
Are consumers able to get rewards or bonuses for buying alcoholic beverages?
No, they are not. It is no longer possible to offer or pay customers rewards or bonuses for the purchase of alcoholic beverages. Already before the Alcohol Act, a similar ban was in place for the sale of tobacco products. This means in practice that customers cannot receive bonuses for buying alcoholic beverages. The provision also applies to alcoholic beverages purchased abroad or on board ferries: all purchases of alcoholic beverages are excluded from the bonus systems connected to Finnish retail stores' and companies' customer loyalty cards.
Were there any changes to the regulations concerning the making of home-made wine or beer?
According to the new Alcohol Act, private individuals can make beer and wine at home. However, distilling is still prohibited.
How were unnecessary norms removed from the Alcohol Act?
In the new Alcohol Act, norms have been removed and new opportunities for operations have been created especially for the restaurant sector. The consolidation of all regulations into one act means that it will be easier for all operators in the alcohol sector, and for the public too, to keep track of the relevant regulations.
Norms have been removed in many ways. Restaurants and bars, for example, can decide on opening hours at their own discretion. They are allowed to serve alcohol until 4.00am by notifying the authorities of the extension, and customers can enjoy their drinks until 5.00am. All restaurants and bars can serve all kinds of alcoholic beverages and even sell them for consumption off the licenced premises on the same conditions that apply to retail stores. Moreover, restrictions on serving sizes for alcoholic beverages were removed. Restaurants and bars are allowed to showcase their selection of strong alcoholic beverages on their websites, for example.
The special qualification requirements for responsible managers in restaurants were removed, which facilitates recruiting and shift scheduling especially in seasonal restaurants and restaurants catering for families and tourists.
What are the most significant impacts of the new Alcohol Act on businesses in the sector?
The consolidation of all regulations into one act benefits all businesses in the sector.
Greater selection of alcoholic beverages in retail stores and the right to sell stronger alcoholic beverages will increase sales especially in breweries and convenience stores. Domestic microbreweries producing craft beers will also benefit from their new retail sale rights. Producers of strong alcoholic beverage now have better opportunities to promote their products in the internet, for example.
Deregulation mostly affected the restaurant sector. Lower qualification requirements for responsible managers in restaurants facilitates recruiting and shift scheduling in restaurants.
Will neighbours be able to sleep during the night? Can anything be done if a restaurant’s customers keep the neighbours awake at night?
The act strengthens people’s right to exert influence over their neighbourhood. The extended opening hours of restaurants must not risk the neighbours’ health.
Where necessary, the licencing authorities have an obligation to request a statement from the municipality and the police regarding serving licence applications. Residents in the neighbouring buildings have to be notified of any applications concerning outdoors serving or licenced premises with a history of disturbances or excessive noise.
The licensing authorities have the right to impose restrictions on the serving licence to prevent excessive noise in the neighbourhood, for example. They can impose shorter serving hours or order restaurants to lower their noise level. Municipalities have a special right to decide on extended serving hours for example in central residential areas to promote the safety of residents. Municipal councils have the right to prohibit, at their own discretion, the serving of alcoholic beverages in all the restaurants and bars in a certain area after 2am or 3am, for example. They can also restrict the serving hours on weekdays so that the extended serving hours will apply only on weekends.