The operations

The Board of Directors and the President of Systembolaget AB, corporate ID number 556059-9473, hereby present the annual accounts, including the Corporate Governance Report, for the 2016 financial year.

The Company’s mandate and objective

Systembolaget AB is a limited company that is wholly owned by the Swedish State and which has a monopoly on retail sales of strong beer, wine and spirituous drinks in Sweden. Alcohol is not like other products. It can cause harm to individuals, to their nearest and dearest, and to society at large. Which is why Systembolaget is not like other companies. We exist to limit the harmful effects of alcohol. Systembolaget’s mandate is to sell responsibly via its monopoly, to offer a high quality service, and to provide information on the risks associated with alcohol. It’s objective is to help improve public health by limiting the harmful effects of alcohol.

Systembolaget’s operations are primarily governed by the Swedish Alcohol Act, Systembolaget’s agreement with the State, and the State’s ownership policy. Systembolaget is responsible, on the basis of these steering documents, for ensuring that:

  • sales are made in a responsible way through clear selling rules and by not encouraging additional sales;
  • a high standard of service and expertise on how to make informed choices are provided in the context of the customer interaction;
  • a broad range of products is offered. Systembolaget shall be strictly brand- and competition-neutral and may not favour any one producer over another.

Systembolaget’s operations are based on a clearly defined social mandate and the purpose is hence not to maximise the company’s profits. Systembolaget shall, however, operate in a cost-conscious and commercially sound way. Limiting the availability of alcohol by controlling the number of retail outlets and opening hours and maintaining a generally restrictive approach is another important component of countering the harm caused by alcohol. Systembolaget sets opening hours and determines the number of retail outlets on the basis of Parliament’s opening hours guidelines.

As a State-owned company, Systembolaget has a responsibility to act as a role model in the field of sustainable enterprise.


Systembolaget’s operations are conducted via 438 retail outlets in Sweden, which were visited by 122.1 (120.5) million customers during the year. Two new stores were opened in 2016, one in eastern and one in northern central Sweden. Systembolaget’s Board of Directors also decided to strengthen the retail network by opening a further six stores and closing one down. The aim, by opening additional stores – the majority of which are planned for large urban areas – is to keep pace with the growth in population and growing urbanisation trends. There are also, in addition to the stores, 467 agents throughout Sweden from whom the customers can order goods for collection. Systembolaget also offers home delivery in a number of areas throughout Sweden on a trial basis.

The operations are conducted by Systembolaget AB and the wholly owned subsidiary companies, IQ-initiativet AB and AB K14 Näckströmsgatan. IQ-initiativet works to provide information in order to prevent and reduce alcohol-related harm. K14 Näckströmsgatan manages Systembolaget’s operating properties.

Systembolaget AB is wholly owned by the Swedish State and there are a total of 360,000 shares.


Significant events, 2016

Disseminating knowledge

Systembolaget’s social mandate includes the dissemination of knowledge of the harmful effects of alcohol. Systembolaget organised open seminars on the theme of alcohol and exercise, alcohol and cancer, how we are affected by other people’s drinking, and alcohol and stress, as part of this work – all based on the latest alcohol research.

Systembolaget also awarded an annual knowledge prize in connection with alcohol research for the first time. The prize is awarded to an alcohol researcher whose leading research has generated new knowledge in the field of alcohol. The prize winner is chosen by an independent committee, and was awarded, this year, to Professor Emeritus Mats Berglund.

Monitor survey

CAN (The Swedish Council for Information on Alcohol and Other Drugs) published its Monitor survey24 of alcohol consumption in Sweden in 2015 this past autumn. The report shows that alcohol consumption has, in principle, remained on a par with levels in 2014 at 9.2 (9.3) litres of pure alcohol per head of population aged 15 and above. In the longer term, however, alcohol consumption has declined, and between 2005 and 2015, the total alcohol consumption per capita aged 15 and above has fallen by 10.6 per cent. Systembolaget’s share of this consumption totalled 62.1 (61.9) per cent, in comparison with the percentage attributable to imports by travellers and restaurant sales, which totalled 13.4 (14.1) per cent and 10.7 (10.5) per cent, respectively.

Influence outside Sweden

Systembolaget’s social responsibility also extends beyond Sweden’s borders. The company is responsible for ensuring that human rights are respected throughout the supply chain, and for promoting a move towards better working conditions in the supply chain. Our work in this area has followed a clear strategy for the past nine years and is primarily based on an external Code of Conduct.

Just over 100 audits (third party audits, incident follow-ups, and in-house follow-ups) of the producers of Systembolaget’s products have been carried out during the year in order to ensure that the producers are complying with the requirements of the Code of Conduct. The deviations noted related to such areas as discrimination, wage issues, and working hours. Systembolaget was informed of poor working conditions during the year at some of our wine producers in South Africa, amongst others. We take all incidents extremely seriously and follow up on them. Systembolaget’s approach is to stay involved and help the producers in their improvement work. This is, however, conditional upon Systembolaget seeing clear results of this improvement work, and it was, unfortunately necessary for Systembolaget to de-list one producer and implement temporary sanctions against another during the year.

Systembolaget can also exert both social and environmental influence on the outside world through our customers’ range preferences. Our ethical and organic product ranges have both been expanded during the year and by the end of the year, our fixed range included 31 (29) ethical products and 374 (289) organic ones.

Legal issues

A report entitled Privat införsel av alkoholdrycker (Private imports of alcoholic drinks)12 was published in the summer of 2014. The Government Committee behind the report had been tasked with:

  • determining which types of measures were currently permitted and prohibited with regard to e-commerce  and home deliveries of alcoholic drinks; and
  • identifying which such measures should, with regard to Swedish alcohol policy and the obligations that derive from Sweden’s membership of the EU, be permitted and prohibited.

Finnish regulations in the area of distance selling of alcoholic drinks have been reviewed by the Court of Justice of the European Union as part of the so-called Alkotaxi case13. The Court issued its ruling on 12 November 2015, confirming that the member states are permitted to implement alcohol policy measures designed to protect public health, including the imposition of bans on distance selling of alcoholic drinks. In the autumn of 2016, the Swedish government presented a draft bill entitled “The regulation of distance selling of alcoholic drinks“25 in order to clarify the regulations in this area. The memorandum also stated that the Court of Justice of the European Union ruling in the Alkotaxi case had been taken into account. According to the Government’s proposal, the legislative changes are scheduled to come into force on 1 January 2018. Systembolaget’s position paper emphasised that Systembolaget supports the clarification of Swedish law in the manner proposed by the Government.

In April 2014, a media services supplier submitted an application for a re-examination to the Administrative Court in Stockholm, requesting that Systembolaget re-conduct a procurement process and apply the provisions of the Swedish Public Procurement Act (LOU). In a ruling dated 16 October 2014, the Administrative Court rejected the application for a re-examination, finding that Systembolaget is not obliged to conduct procurements in accordance with LOU. The ruling was appealed to the Administrative Court of Appeal in Stockholm which, in a ruling dated 19 February 2016, confirmed the ruling by the Administrative Court. The ruling was appealed in March 2016 to the Supreme Administrative Court, which did not grant a licence to review and the previous ruling by the Administrative Court of Appeal stating that Systembolaget was not subject to LOU has consequently gained legal force.

The same media services provider initiated a new case in the summer of 2016 with regard to whether Systembolaget is subject to the provisions of LOU. The Administrative Court rejected the provider’s suit. The provider appealed this ruling to the Administrative Court of Appeal, which, in February 2017, ruled as before, i.e. that Systembolaget is not obliged to conduct procurements in accordance with LOU.


Systembolaget received several awards during the year, which could be regarded as proof of the positive reception for the company’s strategy. Systembolaget has, amongst others, been named the Best Retail Company11 and Best Service Company in Sweden11 for the fourth year in succession. Systembolaget also came second in the survey of Sweden’s best companies21 and was the winner in two categories in the same survey – Service and Information/Communication22. Systembolaget, along with Sveriges Radio, were placed highest in the Confidence Barometer Survey23 – 70 per cent of people asked had fairly high or very high confidence in Systembolaget. At the end of the year, Systembolaget was also declared a category winner for its campaign film “Experten” (The Expert) in the 100-wattaren advertising competition27.

Significant events after the closing day

The following significant events have occurred after the closing day:

  • In December 2016, Parliament passed the State budget for 2017. The budget included a decision to raise the tax on alcohol by 4 per cent for wine and beer and by 1 per cent for spirits. The new alcohol tax came into force on 1 January 2017.
  • In December 2016, the Government decided to update the State’s ownership policy and guidelines for State-owned companies. The regulations have been updated with regard to, amongst other things, external reporting, corporate governance, and guidelines for remuneration and other terms of employment for senior executives. The guidelines came into force on 1 January 2017.
  • In January, Hans Jungland took over as Sales Director for Systembolaget, succeeding Mikael Wallteg, who retired.

Comments on the financial reports


Systembolaget’s sales in 2016 totalled SEK 28,469 million (27,645 m), corresponding to a year-on-year increase of 3 per cent. Sales of wine totalled SEK 14,873 million, corresponding to an increase of 2.7 per cent, while sales of strong beer increased by 4.0 per cent to SEK 6,874 million. Sales of spirituous drinks increased by 1.9 per cent and totalled SEK 5,651 million, while sales of cider and mixed drinks increased by 5.0 per cent to SEK 737 million. The increase in revenues exceeded the increase in sales by volume, due to a continued shift in purchasing patterns towards more expensive products.

Recalculated as pure alcohol, sales volumes totalled 47.0 million litres, corresponding to a year-on-year increase of 1.4 per cent. The increase in sales volumes is primarily attributable to the growth in Sweden’s population, that is, not to an increase in per capita consumption

Sales of organic products increased by 26.8 per cent to SEK 3,636 million and comprised 12.8 per cent of total sales in SEK million. There were a total of 374 (289) organic products in Systembolaget’s fixed range at the end of the year.

The number of ethically labelled products in Systembolaget’s fixed range increased to 31 (29). Sales totalled SEK 610 million, corresponding to an increase of 2.5 per cent.

Interest in the alcohol-free range continues to increase, with sales of alcohol-free products increasing by 16.2 per cent and totalling SEK 172 million (148 m). This is a trend that Systembolaget is keen to promote and we are now able to offer a total of 59 (53) alcohol-free items in our fixed range.

Drinks sales in 2016, million litres


Operating profit

Systembolaget posted an operating profit of SEK 217 million (179 m). The fall in the operating profit was due to a number of factors. Selling expenses, for example, increased to SEK 2,746 million (2,662 m) due, in part to the increase in the stores’ personnel costs as a result of increased sales, annual pay reviews, and the increase in the number of stores. The increase in the number of stores also affected premises-related costs, and selling costs increased due to planned maintenance work in store premises and upgrades to our business system. Depreciation has, however, decreased due to a lower investment rate after the programme of conversion to self-service stores was completed in 2013. Administration costs fell to SEK 634 million (652 m) due to non-recurrent costs in connection with the transition to new pension solutions being charged to pension costs in 2015. The pension costs of 2016 were also affected by changes to indexing as a result of a reduction in the price base amount. The operating margin excluding alcohol tax was 1.3 (1.1) per cent.

Net financial items and pre-tax profit

The pre-tax profit was SEK 368 million (256 m). Net financial items totalled SEK 47 million (-3 m), SEK 26 million (31 m) of which comprised interest income, while SEK 7 million (-32 m) comprised unrealised changes in value, and SEK -1 million (-2 m) comprised realised changes in value. Interest expenses totalled SEK -1 million (0). A dividend of SEK 16 million was received from Systembolaget’s subsidiary company, AB K14 Näckströmsgatan, in the second quarter of the year.

Cash flow

The cash flow from operating activities totalled SEK 306 million (480 m), with the year-on-year change primarily due to changes in working capital. The cash flow from investment activities totalled SEK -638 million (-117 m) and comprised net investments in financial assets of SEK -499 million (32 m) and net investments in tangible fixed assets of SEK -139 m (-149 m). The investments in tangible fixed assets primarily comprised the construction of new stores and renovation of existing ones. Systembolaget has elected to invest its surplus liquidity in interest-bearing instruments in 2016 to a greater extent than in 2015. The cash flow from financing activities totalled SEK -182 million (-251 m) and comprised a dividend of SEK 16 million from AB K14 Näckströmsgatan corresponding to the company’s net profit and the fact that Systembolaget paid a dividend of SEK -198 million (-251 m) to the owner.

Financial position

Shareholders’ equity on 31 December 2016 totalled SEK 1,612 million, corresponding to a year-on-year increase of SEK 91 million. The change comprised the net profit for the year less the dividend paid to the owner, which totalled SEK 198 million.

Summary of the subsidiary companies

IQ initiativet AB (IQ) works to help promote a smarter approach to alcohol that results in a reduction in the harmful effects of alcohol. IQ informs, inspires, challenges, and acts as a platform for good examples of alcohol-prevention measures. IQ is financed by Systembolaget with an annual budget of SEK 35 million (35 m). The pre-tax profit for the period was SEK 0.0 million (1.5 m).

AB K14 Näckströmsgatan manages Systembolaget’s operating properties. On 31 December, the pre-tax profit totalled SEK 54.6 million (42.4 m). The profit was affected by a sale at the end of the year of a property owned by AB K14 Näckströmsgatan which yielded a pre-tax profit of SEK 33.3 million. The profit last year was affected by the restoration of a tax allocation reserve of SEK 21.2. The net profit is otherwise primarily attributable to -intercompany rental revenue.

The owner’s goals and strategic key performance indicators

The Owner’s Directive, adopted by the Annual General Meeting held on 21 April 2016, specifies mandate goals and economic goals for Systembolaget’s operations. The key performance indicators for the mandate goals are the CSI, Alcohol Index and Alcohol consumption in Sweden, including the percentage of this volume acquired through Systembolaget. Systembolaget is also tasked with commissioning an external party to conduct control purchases in order to test that the sales staff check that purchasers are at least 20 years of age, which is the minimum age required by law for the purchase of alcohol. The key performance indicators for the economic goals are the Equity/assets ratio, Return on shareholders’ equity and Cost-effectiveness. Cost-effectiveness shall not show a negative trend over time and the goal will be quantified for the first time at the 2017 Annual General Meeting. The dividend should also, according to the Owner’s Directive and provided that this is in accordance with the dividend regulations of the Swedish Companies Act, total an amount corresponding to 80-100 per cent of the net profit for the year after tax, with due consideration for the equity/assets goal.

Systembolaget is, as a State-owned company, required by the Owner to act as a role model in the field of sustainable enterprise. This entails, amongst other things, setting strategic sustainability goals, the key performance indicators for which within Systembolaget are a reduced Climate Impact and the Alcohol Index. The sustainability work shall be reported in accordance with the GRI (Global Reporting Initiative).

The Owner’s goals (in accordance with the Owner’s Directive) and the Board of Directors’ sustainability goals for Systembolaget are strategic key performance indicators for the operations. Systembolaget has, introduced other strategic key performance indicators over and above those mandated by the Owner’s goals. Results are reported quarterly in a balanced scorecard in which key performance indicator monitoring forms part of the combined reporting. The strategic key performance indicators are determined annually by the Board of Directors.

Strategic key performance indicators1

Result, 2016

Result, 2015

Goal, 2016

Goal, 2017






Proof of age checks (%)





Reduced climate impact2

+6,918 tonnes CO2e

+2,081 tonnes CO2e

-3,000 tonnes CO2e

-7,000 tonnes CO2e

Alcohol index





Total alcohol consumption in Sweden3

Systembolaget’s share of consumption, volume4

OPI (%)





Performance culture




Total sick leave (%)5





Quality supplier index




Equity/assets ratio (%)





Return on shareholders’ equity6





Cost effectiveness8



1See glossary for definitions
2Reported as of 2015 in Systembolaget’s Responsibility Report, based on the starting value of 165,144 tonnes of CO2e after updating the previous starting value of 171,090 tonnes of CO2e (see also Climate impact).
3New goal in Owner’s Directive as of 2015. The results will be published by CAN (the Swedish Council for Information on Alcohol and Other Drugs) in 2016.
4The results will be published by CAN (the Swedish Council for Information on Alcohol and Other Drugs) in 2016. No goal set.
5Results refer to rolling 12-month periods with one month’s delay.
6Results refer to rolling 12-month periods.
7Based on estimated level of government bond interest rate.
8New goal in Owner’s Directive, as of 2015. 2015 is the base year.

The strategic key performance indicators indicate that the CSI (Customer Satisfaction Index) and Proof of age checks continue at high levels of 84 (84) and 96 (96) per cent, respectively. The areas in which the CSI has improved are primarily attitudes to our social responsibility and the stores. The Reduced climate impact key performance indicator has performed negatively over the past two years, largely due to the fact that this indicator tracks the increase in sales. The OPI (Opinion Index) key performance indicator has also achieved a high result and shows that 76 per cent (77%) of Sweden’s population want to retain Systembolaget and the monopoly. The OPI figure has, however, fallen by 0.5 per cent since 2015 due to a slight increase in the number of people who oppose or are neutral to the monopoly. Total sick leave rates, which have worsened since 2014, have stabilised during the year and totalled 5.0 per cent (5.1%). The focus during the year has been on analysing the causes of sick leave and increasing our knowledge of why people remain healthy. The return on shareholders’ equity totalled 17.5 per cent (11.6%), with the year-on-year change due primarily to an increase in net financial items and the effect of changes to the tax allocation reserve. See Our areas of responsibility to find out more about our key performance indicators.



Systembolaget’s Board of Directors has approved the adoption of a new strategic plan running from 2017 to 2020 during the year. One of our priority areas during this period will be continuing our efforts to impress our customers by means of, amongst other things, developing our digital customer interaction, developing our stores, product range, and the service we provide, and by increasing customer awareness of sustainability. Informed alcohol consumption and an enhanced understanding of the benefits of Systembolaget are all priority areas. Systembolaget shall also conduct resource-smart operations characterised by personal leadership. The strengths and commitment of all of our employees shall be utilised in achieving Systembolaget’s goals and vision.


Sales trends have been relatively stable in recent years, with an annual increase in revenues of around 2-4 per cent. This trend is expected to continue in 2017. Current development trends with regard to the breakdown of sales between different product groups are also expected to continue. This would entail a continued increase in volumes in the majority of product groups, although growth in the individual product groups is expected to vary:

  • Growth is expected to be strongest in the alcohol-free range and by ciders and mixed drinks.
  • Wine sales are expected to increase in line with population growth.
  • Sales of strong beer are expected to continue to increase, albeit at a slower rate than the very rapid one seen in recent years.
  • Sales of spirituous drinks are expected to remain, essentially, at the same volume levels as in 2016.

The trend towards more expensive products in all product groups is expected to continue for the next few years. Organically labelled products have experienced high growth rates in recent years and this growth is also expected to continue in the next few years.

Alcohol marketing

The marketing of alcoholic drinks and the exposure of children and young people to this marketing are continuing to increase. This is a worrying trend. The marketing of alcoholic ice cream (which is classified an alcoholic substance) has also been relatively widespread. The question of how alcoholic ice cream should be classified, and whether the regulations governing the marketing of alcoholic drinks also includes alcoholic ice cream, has been investigated by the relevant authorities. The Government has appointed a Committee26 which has been tasked with analysing the issues and submitting proposals on how alcoholic substances (including alcoholic ice cream) intended for consumption should be regulated. The Committee will also examine whether marketing can be restricted via digital media in particular.

Demographic and technological developments

There are a number of significant changes in the outside world that will affect expectations of Systembolaget’s future development. Urbanisation, demographic trends, our customers’ increased use of digital tools, and their increased interest in organic products, are clear examples of this changing world.

Demographics: Sweden’s large conurbation regions have been growing for a number of years now, largely due to the influx of people from areas elsewhere in Sweden to the big cities15. This growth looks like continuing and even if the growth is now primarily due to immigration and increases in birth rates16, it still means that some areas of Sweden are becoming increasingly sparsely populated28 14. This will pose a challenge for Systembolaget in terms of its ability to continue offering a high quality service, both in the big city areas and for those living in areas where distances to service centres are becoming increasingly long17.

According to the most recent figures, almost 1.7 million people in Sweden, corresponding to 17 per cent of the population, were born in another country. A further 6 per cent have parents who were born in other countries. The number of people born outside Sweden is expected to increase faster than ever before over the next few years and in 10 years’ time, there are expected to be almost 2.5 million people in Sweden who were born elsewhere29 31 50. This means new challenges for Systembolaget’s employer brand, for our efforts to explain the benefits of Systembolaget, and for the aspects of our work that involve dialogue and service.

Technology: one trend that will become increasingly clear in the next few years is that of Sweden’s ageing population. In November 2015, almost half of Systembolaget’s potential customers were aged 50 or above and just over one quarter were over 65 years of age. By 2020, a further couple of hundred thousand people will join the over 65s age group and over half a million will be over 80 years old30 31. This will probably give rise to new expectations of Systembolaget, for example in terms of the ways in which the stores are laid out and how information and other services are provided17.

The rapid increase in the use of smartphones and tablets creates new opportunities to reach out to people18. Today’s consumers can, for example, rapidly initiate a purchasing process, irrespective of location. More and more operators are consequently focusing on interacting with their customers via a combination of physical and digital interfaces and on making customers’ everyday lives easier through a variety of new tools20. This will successively give rise to new expectations in terms of Systembolaget’s interaction with its customers, and of our expertise and responsibility, irrespective of the channel chosen by the customer at that time for their interaction with Systembolaget.

Organic: we have seen a growing interest in food quality and in organic and locally produced food in recent years. Systembolaget, in common with other operators in the Swedish grocery retail trade, is now seeing successively increased expectations that we will offer a range that shows a model approach in the sustainability sphere. Swedes, along with Danes, currently buy more organic produce than people in any other country in the world.