Iceland Review; 12 June 2024; Ragnar Tómas
With the hypermarket chain Hagkaup planning to launch an online alcohol store, Health Minister Willum Þór Þórsson has expressed his concern about public health impacts. Willum has called for legal action to address the rising online alcohol sales, which he views as undermining government health objectives.
A legal grey area
Legal uncertainty has surrounded the operation of online alcohol retailers in Iceland. As noted in an In Focus article published by Iceland Review, for the past century, alcohol could only be purchased through the state liquor store, Vínbúðin.
In 2020, however, the online craft beer retailer Bjórland began selling craft beer directly to customers, exploiting a legislative loophole that allowed foreign-based retailers to sell alcohol to Icelandic customers (while domestic companies could not). By establishing a foreign-based company, Bjórland’s sales became legal. In 2021, Santewines SAS followed suit by selling wine online through a French-based company.
In response, ÁTVR – the State Alcohol and Tobacco Company of Iceland – initiated legal proceedings to halt this activity, but the case was dismissed by the district court without substantive consideration. In brief, the court concluded that ÁTVR’s demand for Bjórland to cease online alcohol sales was too flawed to be considered. The ruling noted that if the demand were accepted, Bjórland would be unable to operate its online store, which legally sells alcohol to Icelandic consumers for personal use.
The court also found that ÁTVR did not provide sufficient evidence of damages caused by other companies’ online alcohol sales, nor proved that such sales replaced purchases from ÁTVR rather than supplementing them. Consequently, the court ruled that ÁTVR has no legal interest in obtaining a judgement for damages.
Undermines public health objectives
As noted by RÚV, several more online retailers have since opened in recent years, and the Icelandic hypermarket chain Hagkaup has announced plans to launch its own online alcohol store in the coming weeks. Health Minister Willum Þór Þórsson has stated that this undermines the government’s public health objectives and must be addressed. He reiterated this stance during a parliamentary debate on the issue yesterday.
“We are at a certain crossroads, and we can indeed call it a public health threat when we see online sales increasing to this extent and when one of the nation’s largest retail chains has announced the opening of an online store,” Willum Þór stated.
As noted by RÚV, last week, Willum formally requested information from Finance Minister Sigurður Ingi Jóhannsson on whether the legality of these online retailers would be tested in court. Sigurður responded by sending a letter to the metropolitan police yesterday, highlighting that the activities of these online retailers might constitute legal violations.
The letter references a legal opinion commissioned by the ministry on the operations of these retailers and points out that the issue has not been substantively tested in court. It is necessary to specifically determine whether sales through online retailers constitute legitimate alcohol imports or if the registration of these companies abroad is merely nominal.
A house divided
Opinions on this issue have been divided within the government, RÚV notes. Ministers from the Independence Party have supported opening domestic online retail, and the Minister of Justice announced a bill to this effect last winter. However, the bill has not been presented to parliament, partly due to opposition from the Progressive Party and the Left-Green Movement.
Willum asserts that it is essential to test the matter in court: “Based on the legal framework we have established, and the public health policy we have all agreed upon in parliament, it is absolutely necessary to test the legality of online sales and decide the direction we want to take with the nation’s public health,” Willum Þór stated before parliament yesterday.