Sharp rise in Alko profits – and dividends paid to the state

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Line up in front of an Alko store in the Kallio district of Helsinki before May 1, 2020.

Image: Susanne Salin / Yle

Public alcohol retailer Alko has been very busy last year. Due to coronavirus restrictions on travel and bars, Alko’s position as a liquor salesman has improved significantly, which has been reflected in his earnings.

Turnover improved to 1.3 billion euros compared to 1.1 billion euros the previous year, with a significant improvement in operating profit. It went from around 40 million euros in 2019 to almost 65 million euros last year.

“In keeping with our mission, we do not seek to sell as much alcohol as possible or maximize our bottom line. However, profitable operations are important,” said the CEO. Leena Laitinen said Thursday.

Last year’s profit greatly exceeded 2017 operating profit, the last year before an alcohol reform took effect in early 2018. The reform removed Alko’s exclusive right to sell certain products, leading to a drastic drop in sales volumes.

The rise in profits last year will also boost dividends paid by the company to its owner, the state. While the annual dividend has held steady at 30 million euros in recent years, the board of directors of the company plans to increase the dividend to 60 million euros this year, the highest ever paid to the funds of the state.

Alko’s beverage sales reached nearly 93 million liters last year, up from 82 million liters the year before.

Boom in rosé wine sales

According to the company, sales increased in almost all product groups. The largest increase in liter sales was seen in rosé wines (up 40 percent), followed by white and red wines (up 15 to 17 percent). Sales of premixed drinks, beers and ciders, which fell as a result of the alcohol reform, went into positive territory. Only sales of liqueurs and other low-alcohol spirits declined in 2020.

Despite the strong growth, liter sales were still somewhat below the peak of 2017. However, higher sales and net profits indicate that the company is selling more expensive and profitable products than before.

Alko has long been the leader in alcohol buying, but it lost its status to grocery stores in 2008, and since then the gap has steadily widened. Alko’s market share is now 37%, compared to 45% for other stores. Personal imports, for example from ferry trips to Estonia or Sweden, were also a big part, but that almost evaporated last year due to Covid restrictions.

A day earlier, the Institute for Health and Welfare (THL) reported that alcohol consumption in Finland fell 5% in 2020 year-on-year, the most statistical drop strong since 2012. This was mainly due to a decrease in passenger imports from abroad. , It said.

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