State-owned alcohol retailer Alko was busy last year. Due to coronavirus restrictions on travel and bars, Alko's position as an alcohol vendor was significantly improved, which was reflected in its revenues.
Net sales improved to 1.3 billion euros from 1.1 billion euros in the previous year, with a significant improvement in operating profit. It climbed from around 40 million euros in 2019 to nearly 65 million euros last year.
"In line with our mission, we do not seek to sell as much alcohol as possible or maximise our financial results. However, cost-effective operations are important," CEO Leena Laitinen said on Thursday.
Last year's profit significantly exceeded the operating profit for 2017, the last year before an alcohol reform came into force at the beginning of 2018. The reform took away Alko's exclusive right to sell some products, resulting in a drastic drop in sale volumes.
Last year's rise in earnings will also boost dividends paid by the company to its owner, the state. While the annual dividend has stood still at 30 million euros in recent years, the company's board plans to increase the dividend to 60 million euros this year, the highest ever paid into state coffers.
Alko's beverage sales rose to nearly 93 million litres last year, compared to 82 million the previous year.
Boom in rosé wine sales
According to the company, sales were up in nearly all product groups. The biggest increase in litre sales was in rosé wines(up by 40 percent), followed by white and red wines (up 15-17 percent). Sales of pre-mixed drinks, beers and ciders, which fell as a result of the alcohol reform, rose into positive territory. Only sales of liqueurs and other lower-alcohol spirits decreased in 2020.
Despite the strong growth, litre sales were still somewhat behind the 2017 peak. However higher net sales and profits indicate that the company is selling pricier – and more profitable – products than before.
Alko was long the leading place to buy alcohol, but it lost its status to grocery stores in 2008, and since then the gap has gradually widened. Alko's market share is now 37 percent, compared to 45 percent for other stores. Personal imports, for instance from ferry trips to Estonia or Sweden, have also accounted for a large share, but that nearly evaporated last year due to Covid restrictions.
A day earlier, the Institute for Health and Welfare (THL) reported that alcohol consumption in Finland fell by five percent in 2020 year-on-year, the steepest statistical decline since 2012. This was mainly due to a decrease in passenger imports from abroad, it said.
