Aug. 4, 2022

The Wine Monopoly w/ Trond Erling Pettersen, Vinmonopolet

The Wine Monopoly w/ Trond Erling Pettersen, Vinmonopolet

Vinmonopolet the retail wine monopoly of Norway is tasked with reducing overconsumption of alcohol while enabling a growing food and beverage culture in Norway.

Celebrating its 100th year in 2022, Vinmonopolet, the retail wine monopoly of Norway, is tasked with reducing overconsumption of alcohol while enabling a growing food and beverage culture in Norway. With over 32,000 selections, covering 95% of the population, and educating customers with podcasts and other programs, Trond Erling Pettersen, category manager, describes how the monopoly serves all segments of its customers and operates in a fair, transparent manner.  

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Detailed Show Notes: 

Vinmonopolet = “wine monopoly”

  • ~95% of the population lives w/in 30 min drive of a retail store
  • 340 shops
  • >32,000 different products, >20,000 wines
  • Basic range - ~1,000 wines, always on display in stores
  • Ordering range - importers can stock anything, can be ordered from monopoly website or app, and have wines delivered or available for pickup
  • Stores can select ~25% of shelf space from the ordering range
  • 2021 - 118M liters of alcohol sold, 96M liters of wine (10.6M 9L cases) worth KR27B (~$2.7B) - taxes and profits go back to the government

Monopoly’s purpose

  • Established due to overdrinking at the turn of the 20th century - it was a source of poverty, hunger, and social issues
  • Founded in 1922 - 100th birthday in Nov 2022
  • 1919 - ban on spirits
  • 1922 - created monopoly to have the responsible sale of alcohol

Restaurants and bars

  • Buy directly from importers and producers, do not go through monopoly
  • Some trends start in restaurants, then customers go to the monopoly to buy
  • Restaurants have higher-end wines and often cellar wines

Wine sourcing

  • >600 importers supply monopoly, needs to go through a supplier, no direct purchasing allowed
  • Ordering range - free access to market, suppliers that list whatever they want
  • Special selection - high-end, allocated wines purchased for monopoly
  • Basic range: 
  • It starts by looking at sales figures, trends, customer demands, and holes in the range
  • Conduct research by meeting with producers and importers
  • Develop a tender plan (tenders 2x/year) to outline what to purchase for the next year with very detailed specifications (e.g., max price, packaging, region, etc.)
  • Get samples and conduct a blind tasting panel which is scored
  • Launched in stores with guaranteed placement for one year
  • Wines then compete based on sales volume
  • An extensive and fair process

Pricing - uses a standard formula

  • Average wine - ~50% taxes, ~10-15% monopoly margin, ~35-40% supplier share
  • Monopoly provides calculators for suppliers to set pricing
  • Pricing transparency on the website

Secondary market

  • Started auctions ~10 years ago for people to trade wines
  • Monopoly has people that value and inspect wines
  • Set % fee for monopoly margin (lower than US auction houses)
  • Partnered with an auction house

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