Similarities and distinctions in the Nordic wine markets

Market Bulletin | Issue 248
29 Sep 2021
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The Nordic markets of Denmark, Finland, Norway, and Sweden are important markets for Australian wine exports, making up 5 per cent of the volume shipped in 2020-21. These markets can be remarkably similar in certain aspects and vastly different in others. Wine Australia’s newly released Nordics Market Update September 2021 analyses these markets as a group, and separately, to uncover the most recent trends for Australian wine exporters.

Four markets or one?

What makes the Nordic markets particularly interesting is their interconnectedness. Close in proximity and also in culture, these markets are often grouped together in order to make them easier to analyse. When it comes to the volume of alcohol sales in each country separately, the waters get very murky. Due to the nature of open borders in Europe, consumers in the Nordic countries will often take advantage of better tax rates in neighbouring countries to get cheaper liquor. For example, some Norwegians will buy their alcohol in Sweden, Swedes will go to Denmark, Danes to Germany, and Fins to Estonia or Latvia (see Figure 1). During the pandemic this practice did diminish some, but not as much as predicted, due to consumers simply buying more on fewer trips.

Figure 1: Direction of the majority of cross-border alcohol purchasing in Nordics

Source: IWSR, Google Maps

Another difficulty with analysing these markets separately is their tendency to import wine and then re-export it to their neighbours. In 2020, these four markets imported 595 million litres of wine (see Figure 2), with Denmark and Sweden being the largest importers. About 9 per cent of this was then re-exported to other markets. The most common route of re-export is Denmark to Sweden (nearly 16 million litres worth). In fact, Sweden re-exports the lowest share of the four countries, and also receives the most re-exports from the others.

Figure 2: Nordic imports and re-exports by destination, 2020

 

Source: Global Trade Atlas

Alcohol is heavily regulated through state-owned monopolies in three of these markets. Most alcohol in Sweden, Norway, and Finland is sold through monopoly outlets, except for some lower alcohol beverages, such as low-alcohol beer, which can be sold in supermarkets. A unifying trend in the past year is that with the decrease in cross-border trade, the monopolies have benefitted immensely from consumers switching to domestic outlets for alcohol. Wine sales grew by 11 per cent in volume during 2020, according to IWSR.  

Variety is the spice of life

However, although there are many commonalities between these four wine markets – there are also differences that are worth considering when looking for opportunities.

For instance, Denmark and Norway sell much more premium wine than Sweden and Finland. Norway has high taxes and high incomes, which drives its prices higher. Denmark, however, is not a monopoly market, and has relatively lower taxes. A strong independent wine shop scene and on-trade drive the premium wines sales in Denmark, and even though low priced wines at supermarkets are a large part of the market they also have an extensive offering of premium wines.

Figure 3: Volume by price segment in 2020 

Source: IWSR

As far as imports, Italy is number one in all but one market – Finland. Chile over indexes in Finland, where it is the number one source of wine, while it is fourth when the markets are combined (see Figure 4). In fact, Finland has a very different market profile to the others – for example, German wine is the fourth largest source of wine, while it doesn’t even fall in the top seven overall. This is helped by the fact that the number one white variety in Finland is Riesling, of which Germany is a large producer.

Figure 4: Wine sales by origin in 2020

Source: IWSR

The markets also vary widely in their imports of Australian wine by variety. Exports to Norway are heavily weighted towards Shiraz blends (and towards red wine in general). Finland is more weighted towards white wines, with Chardonnay being the most exported variety. Cabernet Sauvignon also has a much larger share of exports to Finland than the other markets. Denmark has the largest number of varieties being imported (84), but volume is heavily weighted towards the most popular varieties. Sweden, however, has a much more even distribution of volume between varieties shipped.

Figure 5: Variety label claims by volume share of Australian exports

Source: Wine Australia, 12 months ended June 2021

Whatever the differences between these markets – Wine Intelligence has rated all four markets in the top 20 of the most ‘attractive’ wine markets in the world in their latest Global Compass report, which analyses markets based on economic and wine market indicators. Three of the markets also rose considerably in the rankings this year – Norway (up 25 spots), Finland (up 14) and Sweden (up 11). Denmark dropped three spots but is still in the top 10.

More information and analysis on these markets can be found in the Nordics Market Update September 2021 report.


This content is restricted to wine exporters and levy-payers. Some reports are available for purchase to non-levy payers/exporters.

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This content is restricted to wine exporters and levy-payers. Some reports are available for purchase to non-levy payers/exporters.