Finnish Grocery Trade 2019 Contents
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FINNISH GROCERY TRADE 2019 CONTENTS Regulation should support competition ................................................ 3 The competitive strength of the food supply chain can be improved through cooperation .................................................. 4 Grocery trade is an important part of society ................................... 5 Foodservice wholesale trade in Finland ................................................ 6 Statistics ............................................................................................................... 7 The Finnish Grocery Trade Association .............................................14 Member Companies ......................................................................................15 TEXTS Finnish Grocery Trade Association Translation: Delingua Oy PHOTOS P. 3 SOK, p. 9 Nielsen, other photos FGTA and image banks LAYOUT Tiina Aaltonen, gra & grappo PRINTING Erweko Oy 2019 2 www.pty.fi REGULATION should support competition In 2018, the economy and employment was a long-waited beginning. The rationalisa- in Finland showed a positive trend and tion of regulation should be continued, and we consumer confidence remained strong. The should move towards self- and co-regulation. year was favourable also for the daily con- sumer goods trade as the value of sales grew THE RENEWALS AND REFORMS CAN BE by 3.4% in comparison to 2017. Meanwhile, the REALISED IN A RESPONSIBLE MANNER volume trend of the daily consumer goods market stayed at +0.3%. Like elsewhere in Eu- The daily consumer goods trade has proven to ARTTU LAINE rope, the increase in sales was largely based act responsibly also in the changing regulato- President of the on the rising prices. In Finland, the increased ry environment. Commerce has taken action Finnish Grocery alcohol and tobacco taxes contributed to the to promote the objectives of circular economy, Trade Association trend as well. including collection of packaging, reducing The economic performance is expected to food waste and use of plastic bags, and sav- weaken in the future. Furthermore, political ing energy. The deregulation of opening hours uncertainties in the global economy will inev- has improved the service of consumers and in- itably have an impact on the EU and Finland. creased jobs. As Rinne’s government is beginning its term, Commerce has been a responsible operator the global economy is unlikely to give them during the reform of the alcohol legislation. a tailwind. Therefore, it is important for the The consumption of alcohol has not shown government’s decisions on taxation and regu- any significant increase and strong beers have lation to strengthen the domestic market and not substituted medium strength beers as the the purchasing power of the consumers. consumer favourite. Instead, the shops have been able to add interesting specialty beers GOOD REGULATION DOES NOT WEAKEN in their selection. The sales of non-alcoholic ”The grocery COMPETITIVE STRENGTH beers is also up. The daily consumer goods trade is making significant investments in trade is a Growth of domestic demand increases tax the enforcement of legal age limits. In ad- responsible revenues, promotes creation of new jobs and dition to the consumer campaigns, shops improves the opportunities of enterprises to organise constant training for the employ- operator.” invest in Finland. The daily consumer goods ees and the Finnish Grocery Trade Associa- trade and Foodservice wholesale trade are im- tion’s age limit certificate was renewed in 2018. portant taxpayers and investors that employ The positive experiences indicate that the dozens of thousands of people and promote reform of the alcohol policy can continue. Al- keeping all of Finland inhabited. ready during this government’s term of office, Good regulation does not weaken our we need an impartial report on up-to-date competitive strength or cause unnecessary means of making alcohol policy and justifica- damage to the economy and businesses. How- tion of Alko’s monopoly. Action also needs to ever, it should be noted that the regulation of be taken to reform the distribution of phar- the Finnish retail sector has been one of the maceuticals as the Ministry of Social Affairs strictest in the OECD countries. Overly strict and Health stated in their new report. Also in regulation hinders both competition and the the pharmaceutical operations, the legislation development of the domestic market. The de- should be based on the patients’ and society’s regulation that was started a few years ago interests, and enable genuine competition. www.pty.fi 3 THE COMPETITIVE STRENGTH of the food supply chain can be improved through cooperation How to improve the competitive that is based on facts and shared by the whole strength of the domestic food supply chain. Only in this way, the improvement mea- chain and profitability of primary production? sures can be targeted correctly and efficiently. Along with international competition, weath- The profitability of primary production er conditions and sanctions on Russia, the cli- cannot be improved by increasing regulation mate change raises more and more challenges of the food supply chain. Instead, the soluti- to the food industry, so lively debate is sure to on lies in the improved competitive strength continue also in the future. of the whole food supply chain, product deve- KARI LUOTO Finland has tried to address the challenges lopment, production methods enabled by new Managing Director by producing various reports, increasing re- technologies, and significant increase in food of the Finnish gulation and establishing a new role of Food exports. Grocery Trade Association Market Ombudsman. The operators of the The government can do its part by reasses- chain have also increased self-regulation by es- sing taxation: In Finland, 45% of food prices tablishing the Board of Trading Practices. The consist of taxes and food VAT (14%) is almost Board is comprised of independent experts triple when compared to the average of EU15 and it monitors the implementation of good countries. trading practices in Finland. The Board “The regulation has already begun its work briskly and REAL SOLUTIONS ARE BUSINESS-ORIENTED of the food proven that the system works. Shared determination to make changes was The new Finnish Food Market Act also called for in the report by Reijo Karhinen in supply chain entered into force at the beginning of February 2019. The report includes important should not 2019. Finland wanted to pass the law remarks on the root causes of low profitability even though the EU was preparing in primary production and big changes need- be increased a similar directive at the same time. ed in the sector, in particular. Karhinen gave further”. Transposing that directive into natio- suggestions, such as making results- oriented nal legislation will be something that financial management the basis of agricultural the new government has to do already early on. entrepreneurship and putting an end to “farm- The government should be careful not to ing for subsidies”. be blinded by the speed when creating new re- He also demands for a significant increase in gulation. The national regulation on the food food exports. Karhinen asked the grocery trade supply chain should not be increased further to show genuine companionship and increase and the requirements of the European direc- data openness and visibility of domestic pro- tive should not be exceeded. In addition, it is duce in shops. important that the Board of Trading Practices Although the report remained on a fairly and new Food Market Ombudsman find a general level, its starting position was correct: well-functioning cooperation model. Real solutions are business-oriented. Commer- ce is happy to take part in building cooperati- THE SITUATIONAL PICTURE SHOULD BE on and competitive food supply chain. In ad- BASED ON FACTS dition to domestic markets, companies in the There are many real challenges in our food sup- commerce sector are actively searching new ply chain that need to be addressed. Instead of international markets for Finnish products – confrontations, we need a situational picture in Europe, Russia as well as in Asia. 4 www.pty.fi THE DUTIES OF GROCERY TRADE Creating the extensive selections to meet consumer demand. Maintaining the trade service network across the entire country. Developing food supply chain efficiency and productivity. Looking afterfood safety. Monitoring the sale of age-restricted products. Ensuring food supply and distribution in Finland. Ensuring free competition and availability of several purchasing channels. Securing employment. Taking environmental aspects into consideration in all operations. GROCERY TRADE is an important part of society The grocery trade operations are vi- Without sufficient cost-efficiency, prices would tal in order for society to work and the escalate, selections would shrink, and customers every day life of consumers to continue smooth- would have a poorer service and reduced acces- ly. Trade plays a significant role as a founda- sibility. tion block of society, ensuring services and the The structure of the Finnish grocery trade habit ability of the entire country and providing has also been changed by the migration to employment opportunities. growth centres, the increased use of cars as Companies in the retail sector are actively well as a more extensive selection of goods and working, for instance, towards reducing food underlying IT development that has made the waste as well as improving