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From Grape to Glass
Corporate Social Responsibility
in the Wine Supply Chain
Report #67
This report has been published with the financial support of the Swedish Agency for International Development Assistance (Sida). Sida has not, however, contributed to its development nor
takes a position on the content of the report. The report has been authored by Swedwatch in
accordance with the methodology handbook of the organisation. The Africa Groups of Sweden
and Solidarity Sweden-Latin America, two of Swedwatch’s member organisations, endorse the
report and have participated in developing its recommendations. The report is available to
download at www.swedwatch.org.
Author: Peter Edoff
Cover photograph: Felipe Morales
Layout and graphics: Daniel Fagerström, Paperhits
Layout: Åse Bengtsson Helin
Translation: Anne Froude
Publisher: Viveka Risberg
First edition published (Swedish): December 2013
Second edition published (Enligsh): October 2014
ISBN 987-91-981365-4-8
Swedwatch is a religiously and politically independent organization that examines Swedish
­companies’ business operations abroad. The organization’s purpose is to reduce adverse social
and environmental impacts, encourage best practice, share knowledge and hold an open dialogue
with Swedish companies so that the business community pays greater attention to these issues.
Swedwatch has six member organizations: the Church of Sweden, Diakonia, the Swedish Society
for Nature Conservation, Fair Trade Center, Solidarity Sweden-Latin America and Africa Groups
o­f Sweden.
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Table of Contents
Executive summary......................................................................................................... 4
1. Introduction................................................................................................................. 6
2. Method..........................................................................................................................7
3. Background.................................................................................................................. 9
4. Final analysis............................................................................................................. 35
5. Recommendations..................................................................................................... 38
3
Executive summary
The supply chain of wine is complex and global. It includes countries with centuries-old traditions of winemaking in North America, South America, Europe,
Africa, Asia and Australia. South Africa, Chile and Argentina currently supply the
Swedish market with 30 percent of all the consumed wine. The wine industries in
these countries are of great importance to their local economies and employ a large
number of agricultural workers. South Africa, Chile and Argentina are able to successfully compete with more technologically advanced wine producing countries in
the EU, the United States and Australia, partly due to cheap labour. Wine imports
from these countries contribute to job creation and sector development, but they
also involve risks associated with social responsibility and environmental management throughout the supply chain.
This report analyses the wine industries in South Africa, Chile and Argentina. It
highlights issues concerning human rights and working conditions associated with
these industries. Agricultural workers face challenges such as low wage levels preventing employees to provide for their families, violations of freedom of association, inadequate safety procedures and substandard housing conditions.
The Swedish alcohol retailer, Systembolaget, has since 2007, increased their
efforts to incorporate sustainability and corporate social responsibility (CSR) into
their business. Close cooperation with the other Nordic alcohol monopolies has
led to a joint sustainability approach where the companies use a Code of Conduct
de­veloped by the organisation BSCI (Business Social Compliance Initiative). In
order to monitor compliance with the Code of Conduct and to ensure reasonable
social standards throughout the supply chain, Systembolaget conducts external
audits through a third-party auditor at the producer level.
The point of departure for this report is a case study of how Systembolaget and
four Swedish wine importing companies are working to ensure good working conditions along the supply chain. The study shows a genuine commitment from Systembolaget. After introducing the Code of Conduct in January 2012, Systembolaget
has spent most of 2013 concentrating on following up on the compliance of the
Code. Systembolaget has chosen to not audit the importing companies, but rather,
directly monitor the implementation of the Code of Conduct at the producers. The
company prioritises auditing producers with the highest volume of total wine sales
thus smaller producers have not yet been audited. Furthermore, only production
facilities have been audited, not vineyards, where many of the most serious violations exist.
The four Swedish wine importing companies examined in this report show varying commitment to CSR. Three of the importers have integrated sustainability into
their businesses to a certain extent. Swedwatch was however unable to determine
to what extent the fourth company, Oenoforos, works with sustainability issues.
The company declined to participate in Swedwatch’s study and does not publish
any information about its sustainability efforts on their website.
4
Swedwatch’s field studies in South Africa and Chile show that the biggest challenge
faced by agricultural workers in the wine industry are low wages that are insufficient to cover basic needs such as food, housing, education and health care. The
study also shows that the workers’ right to organise is violated. Swedwatch found
that three out of four employers discriminate against trade union employees or
frown upon trade union activism. In Chile, workers ability to organise is limited.
Only company-based unions may participate in collective bargaining. Discrimination against unionised workers is common.
Hazardous pesticides that have been banned by the EU for years are still used
extensively in both South Africa and Chile. In South Africa, it becomes clear during
interviews that employees face serious health risks due to inadequate protective
equipment when handling these chemicals.
All stakeholders must contribute to solving the problems that exist within the
supply chain of global wine production. The Swedish state, Systembolaget and all
importing companies should work for a sustainable production of wine that protects both people and the environment.
Systembolaget’s initial strategy, to conduct risk assessments of countries and prioritise sustainability initiatives based on these assessments, is valid. The company
has communicated their corporate responsibility approach both to its importing
companies and producers, as well as to non-governmental organisations and trade
unions. Despite these efforts, there are some weaknesses in Systembolaget’s current sustainability approach. Systembolaget should review its strategy and analyse
if external audits can be combined with other methods such as integration with
purchasing practices, enhanced risk assessment, increased collaboration with local
trade unions and organisations, and capacity building at producer levels.
Systembolaget has been transparent and cooperative throughout the process of
writing this report. Great qualities for any company that wishes to address issues
in the supply chain and work to reduce negative impacts on human rights and the
environment.
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Wine is a global merchandise. In this report, Swedwatch follows four wines from vineyards
in Chile and South Africa, via importers in Sweden, to the shelves at Systembolaget.
PHOTOGRAPHY: Lisa Edoff
1. Introduction
Red with meat, white with fish and sparkling for special occasions. Systembolaget’s
wine sales have increased by more than 5% per year on average since 1995.1 Tips,
recommendations and wine reviews are heard on radio and seen on TV. Customised
trips go to the wine regions of countries in southern Europe. New additions to Systembolaget’s range are advertised on TV and in the papers.
Several hundred wine importers are tussling over Swedish consumers. In 2012 a new
record was broken when 189 million litres of wine were consumed in the country.2
This is approx. 24 litres of wine per person and year.3
1
See: Public Health Agency, Alkoholstatistik 2010, 2012 and Systembolaget, Försäljning
av vin exklusive starkvin t.o.m. kvartal 4 2011, 2012, retrieved 14 Nov 2013 from www.
systembolaget. se/OmSystembolaget/Forsaljningsstatistik/.
2Systembolaget, Försäljning av vin exklusive starkvin t.o.m. kvartal 4 2012, 2013.
3 The Centre for Social Research on Alcohol and Drugs (SoRAD) publishes reports on alcohol
consumption commissioned by the government. Statistics are calculated per inhabitant aged 15
and over. In 2012 there were approx. 7.95 million Swedes aged 15 and over.
6
Much of the wine sold in Sweden comes from countries where the wine industry is
dependent on cheap labour. Almost three of every ten bottles of wine sold in Systembolaget stores come from South Africa, Chile or Argentina. There have been reports
from the wine industry in these countries of many years of violations of human rights
and poor working conditions. Agricultural workers have little opportunity to lift
themselves out of poverty.4
Swedwatch has monitored Systembolaget’s efforts to assure a proper social standard
throughout its supply chain. The purpose of this report is to highlight the strengths
and weaknesses of these activities and thereby contribute to the long-term improvement of conditions for agricultural workers in these countries. 5
The report focuses on social issues, often related to pay, working hours and freedom
of association, but also highlights the problem of substandard accommodation and
the use of chemical biocides.
2. Method
Swedwatch conducted research for this report between May and November 2013.
One important element of methods used has been interviewing Systembolaget,
three Swedish importers, Chilean and South African wine producers and employees
within the wine industry in these two countries. Swedwatch has also gained access to
reports and research regarding South Africa, Chile and Argentina, interviewed representatives of NGOs, trade unions, industry organisations, authorities and experts
within the academic world. Within the companies monitored Swedwatch has, in the
first instance, interviewed representatives from purchasing and CSR departments,
legal departments and senior management. Swedwatch uses a transparent method
and is careful to ensure that the companies concerned have the opportunity to
express their views.
In addition to examining Systembolaget’s purchasing process and sustainability
activities, Swedwatch has chosen to follow four wines – from the cultivation of grapes
in Chile and South Africa via the importers in Sweden to the shelves in Systembolaget
stores. In order to obtain a clear picture of the wine industry in general, the selection of producers was based on the following criteria: some of their wines should be
included in the Systembolaget fixed range of products, both large and small producers should be represented and at least two of the producers should have some form of
fairtrade labelling and/or environmental certification.
4
See: Greenberg, Stephen, Women workers in wine and deciduous fruit global value chains,
2003, Human Rights Watch, Ripe with abuse – Human Rights Conditions in South Africa’s
Fruit and Wine Industries, 2011 and Caro, Pamela, ”Caso de Chile” in Empleo y Condiciones
de trabajo de mujeres temporeras agrícolas, 2012.
Swedwatch is aware that unsatisfactory conditions are also found in countries which have
better labour laws and social safety nets. But since Systembolaget initially focused on countries
where they consider the risk of violation of human rights and labour law to be greatest,
Swedwatch has applied a similar limit in this report.
5
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The four wine producers are Concha y Toro and Miguel Torres in Chile and Robertson Winery and Koopmanskloof in South Africa.
Two field studies have been conducted, one in the vicinity of the Central Valley wine
region in Chile and the other in the Stellenbosch and Langeberg municipalities in the
Western Cape Province, South Africa. With the help of local researchers, Swedwatch
has conducted interviews with members of senior management at the four producers
and with 52 direct and indirect employees.
At two of the four wine producers, Concha y Toro in Chile and Robertson Winery
in South Africa, Swedwatch’s researchers have established contact with, and interviewed, workers without the knowledge of the employers. In these cases, the workers
interviewed have thus not been selected by the companies themselves. In the other
two, however, Miguel Torres in Chile and Koopmanskloof in South Africa, contact
with the employees was made via the companies. This was because the unions or
local labour organisations had no contact with the employees, and the workers live
and work in the vineyards whose land is private property to which uninvited visitors
have limited access. This weakens the results of the interviews and Swedwatch has
consequently taken a decision not to draw too far-reaching conclusions based on this
interview material. The names of all the agricultural workers have been changed. A
detailed description of the methods used in the field studies is given in the annex.
Wine production in Argentina is also presented briefly in the report, but without a
field study.
The Swedish importers PrimeWine Sweden, Concha y Toro Sweden and Miguel
Torres Sweden have agreed to be interviewed by Swedwatch. Sweden’s single largest
wine importer Oenoforos, which is also monitored in this report, declined to be interviewed by Swedwatch. The reason given was that they do not wish to publicly discuss
their business relationship with their only customer, Systembolaget, nor to give other
importers competitive advantages by describing their sustainability work in detail.
Systembolaget and the importers monitored have examined this report prior to publication. Swedwatch has given the companies the opportunity to submit written comments which are published on the Swedwatch website along with the report.
The structure of the report is as follows: after the introduction and method, the Swedish alcohol market and Systembolaget’s position as a wine retailer are described (Section 3). The four importers monitored are also described here. Section 4 consists of
case studies of the wine industries in South Africa, Chile and Argentina. Section 5
consists of conclusions, analysis and recommendations.
Karin Hakelius, university lecturer in industrial management at the Swedish University of Agricultural Sciences has acted as the expert reader and has expressed opinions which Swedwatch has taken into account.
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Producer
/ Importer
28%
VAT
20%
Systembolaget’s fixed
supplement charge 3 %
Customs fee 3%
3. Background
Alcohol Tax 40%
Systembolaget’s
percental supplement
charge 6 %
The wine industry is an important part of agriculture in South Africa, Chile and
Argentina. Largely as a result of its cheap labour, these countries compete successfully on the global market with countries such as Italy, France, Spain and the US,
despite the fact that the wine industries in the latter group of countries are more
mechanised, and in some case subsidised.6 Chile, Argentina and South Africa together
account for almost 30% of wine sales in Sweden.
Other countries 12%
South africa 18%
USA 7%
Chile 7%
Spain 10%
Argentina 3%
Australia 10%
Italy 23%
France 10%
Systembolaget wine sales by country. Source: Systembolaget, Försäljning av vin exklusive starkvin
under kvartal 2 2013, 2013.
For Systembolaget, importing wine from Chile, Argentina and South Africa implies a
greater risk of social and environmental problems in the supply chain compared with
purchasing wines from the EU, the US or Australia. This is partly because low income
countries use a larger proportion of manual labour, and partly because problems
of general poverty are greater. In order to deal with issues that arise in relation to
un­acceptable working conditions and weak environmental inputs, since 2012 Systembolaget has worked on a code of conduct with which all suppliers of alcoholic beverages to Systembolaget, and their suppliers/producers, must comply.7
3.1 Systembolaget
The Swedish alcohol market is different from that of many other European countries,
since Systembolaget has a monopoly on the retail sales of alcoholic beverages that contain more than 3.5 volume per cent of alcohol. In contrast, the import of alcohol is not
regulated by a monopolist since the import monopoly of the state-owned Vin & Sprit
was abolished when Sweden entered the EU in 1995. Since then the market has been
open to private importers wishing to produce or import wine, beer and spirits to Sweden
6
See: Ewert & Du Toit, “A Deepening Divide in the Countryside: Restructuring and Rural
Livelihoods in the South African Wine Industry”, 2005, s.318, European Commission, The
Common Agricultural Policy – A partnership between Europe and Farmers, 2012 och USDA,
The U.S. Produce Industry and Labor – Facing the Future in a Global Economy, 2010.
7Systembolaget, Allmänna Villkor, retrieved 21 Nov 2013 from www.systembolaget.se/
Allmanna- villkor/.
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for onward supply to Systembolaget or the restaurant business. Under the Alcohol
Act, Systembolaget is not allowed to conduct its own import business, since dealing
directly with producers as a monopoly would create enormous competitive advantages over other suppliers of alcoholic beverages.8 The fact that Systembolaget is not
allowed to import alcoholic beverages means that it always acts through importers
when stocking products which are not produced in Sweden. Consequently, Systembolaget does not have direct agreements with producers of, for example, wine from
Chile, Argentina or South Africa.
3.1.1 The supply chain
Systembolaget currently has around 900 registered suppliers of beverages, although
the majority of these sell no, or few, products to Systembolaget. The 22 largest wine
importers account for a total of 80% of total sales.9
IMPORTER
IMPORTER
IMPORTER
IMPORTER
PRODUCER
PRODUCER
PRODUCER
PRODUCER
GRAPE GROWER
GRAPE GROWER
GRAPE GROWER
GRAPE GROWER
Systembolaget’s wine supply chain takes a variety of forms. Some companies are both importers
and producers and maintain a presence in Sweden. It is, however, more common that the wine
producer operates in the same country as the grape grower.
Göran Klintberg, acting Head of CSR at Systembolaget, says that the greatest challenge for Systembolaget’s sustainability activities is the supply chain. Systembolaget’s supply chain is complex, and varies according to the origin of the product, the
8
9
Competition Act (2008:579). Chap. 2, Paragraph 7
Rogeman, Lena, Head of CSR Environment, Systembolaget, telephone interview, 15 August
2013.
10
range it belongs to (fixed, temporary or available on order) and the volumes in which
the product is sold. The importers, that is to say Systembolaget’s suppliers, either
have direct contact with the producer, or an agent handles the contact between the
importer and the producer.10
The average importer works on a regular basis with five to ten producers and on a
temporary basis with roughly the same number. However, the supply chain often
extends further. If the harvest is poor one year, the producers may buy grapes from
other growers to cover their needs. Large wine producers may buy as much as 40% of
their grapes from sub-suppliers.11 In certain cases grapes, grape juice or wine can also
be bought on a spot market, i.e. a market place where goods are bought and sold as
avialable.
MIGUEL
TORRES
SWEDEN
CONCHA Y
TORRO
SWEDEN
PRIMEWINE
OENOFOROS
MIGUEL
TORRES
CHILE
CONCHA Y
TORRO
ROBERTSON
WINERY
KOOPMANSKLOOF
SOUTH
AFRICA
CHILE
OWNS 6
VINEYARDS
OWNS 50
VINEYARDS
OWNS 30
VINEYARDS
OWNS 6
VINEYARDS
The diagram above shows how the importers and producers monitored fit into the Systembolaget
supply chain.
In order to cut out the middleman and reduce costs, some companies are both producers and importers. In addition to their supply business, Oenoforos and Prime­
Wine also produce their own brands. Oenoforos, for example, controls large portions
10Ibid.
11 There are also producers who buy all their grapes and do not grow any themselves.
11
of the supply chain by importing wine in bulk to its subsidiary Nordic Sea Winery’s
bottling plant in Simrishamn. Concha y Toro Sweden, which is owned by Chilean
Concha y Toro, and Miguel Torres Sweden, which is owned by the Spanish Miguel
Torres, have cut out the middleman by establishing Swedish import companies which
supply products to Systembolaget.
3.1.2 The purchasing process
Importers can see the products required by Systembolaget for their fixed range 12-18
months in advance. Approx. 300 new products are launched every year. System­
bolaget receives approximately 10,000 tenders for these. Under their agreement with
the state, Systembolaget’s product range must be such that there is no favouring of
domestic products. The selection is based on an assessment of product quality, specific risks of harm from the product, customer demand and other business considerations. In order to fulfil state requirements, the range Systembolaget offers in its stores
reflects customer demand, that is to say, wines which sell well remain in the range
while wines which sell poorly are replaced. One example of this is organic wines,
which advanced during the 2000s, but which fell in popularity in 2012 .12 System­
bolaget may, however, exercise some control over the range offered through its tendering process by specifying certain types of wine. In addition to Systembolaget’s
fixed range there is an even larger range available on order.13 With several hundred
Swedish beverage suppliers and thousands of wine producers around the world, Systembolaget’s purchasing process is complicated and comprehensive.
The final selection, when the importers and producers who will make the list are
chosen, is made through a blind tasting. This is to ensure that the quality of the wine
is the ultimate determinant.14
At the Finnish alcohol monopoly Alko, the selection process is different. In addition
to the quality of the product, they are also able to take into account other aspects
which add value for the consumer, including the producer’s environmental and social
responsibility, since the products are not always selected through blind tasting.15
In order to have a tender accepted by Systembolaget the Swedish importer must
name its producers and sub-suppliers. This is to enable Systembolaget to assure the
quality of the wine and establish its origin. However, not all Systembolaget’s products
are purchased via tender. Importers of wines in the available on order range, that is
to say, wines which are not sold in Systembolaget’s stores but which can be ordered,
are not required to declare the producer’s sub-suppliers, consequently Systembolaget
does not currently have a complete picture of all its significant sub-suppliers.16
12 See: Röttorp, Anders, “Ekoviner förlorar mark i Sweden”, 24 November 2012 and Röttorp,
Anders, “Italien ökar och ekologiskt vin minskar”, 13 April 2013.
13 Klintberg, Göran, acting Head of CSR, Systembolaget, interview, 19 June 2013.
14 Klintberg, Göran, acting Head of CSR, Systembolaget, interview, 19 June 2013.
15Alko, Listing procedure and retail sale of alcoholic beverages, 2013
16 Klintberg, Göran, acting Head of CSR, Systembolaget, interview, 19 June 2013.
12
3.1.3 Opinions divided on price-reduction measures
In order to keep prices down, Systembolaget has established a transparent pricing
model which importers also use when tendering. The price tendered includes alcohol tax, costs for packaging, labelling and delivery. There are no price negotiations
between the parties; the price tendered is Systembolaget’s purchasing price. The
price to customer is set by Systembolaget adding a fixed mark-up and a percentage
mark-up. In addition, VAT is added. The fixed mark-up varies between the beer, wine
and spirits categories and according to the type of packaging, while the percentage
mark-up is the same for all categories. Göran Klintberg says that Systembolaget takes
responsibility for not pressing prices since they do not pit importers against each
other to gain the lowest levels possible. Instead, Systembolaget states the preconditions for what a product is to cost:
“We tell them the price band we want the price to customer to be in, then the importer
tenders the price they want to sell at to Systembolaget,” says Göran Klintberg.17
However, Peter Lidvall, Country Manager at wine importer Concha y Toro Sweden,
believes that this nonetheless leads to pressure on prices:
“There is, consciously or subconsciously, a price reduction because importers often
undervalue their products when they submit their tenders in an effort to increase
their chances of achieving a listing. The price that applies is the one Systembolaget
defines in its tender invitations. We have no chance of influencing that.”18
Martin Horwitz, Head of CSR at import company PrimeWine, says that the responsibility and risk they assume as importers for Systembolaget means price setting is a
sensitive issue.
“If you put the price too high, there is a risk the wine will not sell well and then it will
be removed from the range. If that happens it is entirely up to the importer to deal
with the remaining stocks which has sometimes meant having to pour it away since
it’s hard to find other sales channels,” says Martin Horwitz.19
The South African wine producers Swedwatch interviewed stressed, for their part,
that global competition is extremely tough and their margins are very small. They
claim, however, that the Swedish market is relatively favourable since they are not
exposed to the same price reduction negotiations from importers there as on other
markets which do not have a monopoly.
In order to obtain an overview of how the price of wine sold in Sweden is broken
down, the components of a bag-in-box wine sold for SEK 160 at Systembolaget are
as follows: an enormous 63%, or SEK 101, is direct revenue to the Swedish state in
the form of alcohol tax, VAT and excise duties. 9%, or SEK 14, is the Systembolaget
margin. This leaves 28% per cent, SEK 45, to cover all the costs of the importer and,
above all, the producer.
17Ibid.
18 Lidvall, Peter, Country Manager, Sweden, Concha y Toro Sweden, interview, 10 September 2013.
19 Horwitz, Martin Head of CSR, PrimeWine, interview, 29 August 2013.
13
The Swedish importers do not want to say how much their margins are. In all possibility, importers’ margins vary considerably depending on their sales volumes and the
price category their products belong to. In a study from 2012, importers’ margins on
bag-in-box wines were estimated at 3% to 7%, including costs such as transport and
storage.20 The same study shows that agricultural workers’ pay accounts for a very
small part of the sales price, somewhere between 3% and 5%.21 For a bag-in-box wine
in the SEK 160 category this means that employees receive SEK 5 – SEK 8 per box.
Producer
/ Importer
28%
VAT
20%
Systembolaget’s fixed
supplement charge 3 %
Customs fee 3%
Alcohol Tax 40%
Systembolaget’s
percental supplement
charge 6 %
The price distribution for a boxed wine costing 160 SEK.
Source: Systembolaget’s cost calculation 2012/2013.
Such a large part of the price in the example above consists of tax revenues is because
alcohol tax is based on volume. Consequently the portion that constitutes tax is
greater for a cheaper bag-in-box wine than for a more expensive bottle. To compare,
Other countries 12%
a bag-in-box wine for SEK 260 comprises 47% alcohol
tax, VAT
South africa
18% and excise duties.
There is thus greater scope to pay the agricultural workers a better wage.
USA 7%
Chile 7% the cheaper wines:
Martin Horwitz at PrimeWine has, however, doubts regarding
Spain 10%
Argentina 3%
“Many people claim that fairtrade labelled and organic products are too expensive,
which is not true. Conventionally-produced products are too cheap, because they
don’t leave anyAustralia
margin for
costs.”22
10%the social and environmental
Italy 23%
Ulf Sjödin, Group Manager
at Systembolaget says, however, that more expensive
France 10%
wines do not automatically mean better working and living conditions for agricultural
workers. There are, for example, cheap wines which are fairtrade and there are cases
of poor working conditions for the producers of expensive wines. There is, however,
a limit for how cheap Systembolaget will go. The company does not, for example,
include bag-in-box wines under SEK 169 in its tender invitations. Despite this, the
fixed range does include bag-in-box wines under this sum. Ulf Sjödin gives two example of why: “It’s partly because the importer is entitled to change the price of their
products after they’ve been launched. This means the price of a wine is sometimes
20 Greenberg, Stephen, et. al., Gendered value chain analysis of wine – from farm worker in
South Africa to consumer in Sweden, 2012, p.30 and p.37.
21Ibid.
22 Horwitz, Martin, Head of CSR, PrimeWine, interview, 29 August 2013.
14
reduced. There are also some products that come into Systembolaget’s range via the
available on order range.”23
Consequently consumer demand that has led to these products being included in the
Systembolaget fixed range.
3.2 The state as owner
Systembolaget is wholly owned by the state. The Government is instructed by Parliament to actively govern state-owned enterprises so that “specially-determined social
duties are well managed”. In the case of Systembolaget, this means primarily limiting
access to alcohol and thereby diminishing the harmful effects of alcohol on public
health. The directives for state-owned enterprises are described in the state’s Ownership Policy.24
The Ownership Policy requires state-owned enterprises to follow international directives such as the UN Global Compact, the UN’s Guiding Principles for Business and
Human Rights, and the OECD directives for multi-national corporations. The Ownership Policy dictates that enterprises shall act in a transparent manner in issues
concerning risks and opportunities, engage in active dialogue and collaboration with
stakeholders and relevant organisations, integrate sustainability issues into their
business strategy and determine sustainability targets.25
According to Pia Fagerström, First Secretary at the Ministry of Health and Social
Affairs, the state introduced stricter requirements concerning sustainable enterprise
in the early 2000s. In 2007, the Government established guidelines for external
reporting, including requirements for state-owned enterprises to publish a sustainability report according to the GRI International Guidelines for Sustainability Reporting. The guidelines for external reporting and sustainable enterprise were then incorporated into the state Ownership Policy.26
In 2012, the Ministry of Finance stipulated that the boards of directors of state-owned
enterprises must define and determine specific sustainability targets. General targets
for state-owned enterprises have not been set because each enterprise has its own
specific business opportunities and risks associated with sustainability.27 Systembolaget’s sustainability target will be determined by its Board in November 2013, explains
Lena Rogeman at Systembolaget. The targets will focus primarily on Systembolaget’s
mission to limit the harmful effects of alcohol, but also on the responsibility of suppliers and on climate change.28
23 Sjödin, Ulf, Group Manager, Systembolaget, e-mail, 22 October 2013.
24 Swedish Government Offices, Statens ägarpolicy och riktlinjer för företag med statligt
ägande, 2012.
25Ibid.
26 Fagerström, Pia, First Secretary, Ministry of Health and Social Affairs, e-mail, 14 October 2013.
27 Swedish Government Offices, Hållbart företagande, retrieved 4 Oct 2013 from
www.regeringen.se/ sb/d/17698.
28 Rogeman, Lena, Head of CSR Environment, Systembolaget, e-mail, 24 September 2013.
15
Agricultural workers cutting grapevines on one of Koopmanskloof’s vineyards in preparation of
the coming season. PHOTOGRAPHY: Steve Kretzmann
Pia Fagerström believes that the owners are, in general, satisfied with Systembolaget’s sustainability activities. Systembolaget is often held up as a good example of
how an enterprise is to work with these issues.29
3.3 Systembolaget sustainability activities
Since 2008, the focus of Systembolaget sustainability activities has been to operate
the business in line with the principles outlined in the UN Global Compact.30 In the
same year, the first contacts were made with the alcohol monopolies in Norway and
Finland to initiate a common sustainability effort. This collaboration has resulted in
all three enterprises adopting the same code of conduct and coordinating their monitoring of producers. Furthermore, Systembolaget and Alko in Finland use the same
monitoring system.
29 Fagerström, Pia, First Secretary, Ministry of Health and Social Affairs, e-mail, 14 October 2013.
30 Global Compact is a UN initiative encouraging enterprises to introduce policies related to
sustainability and social responsibility.
16
In 2009, together with its Nordic partners, Systembolaget employed the Swedish
company Ethos International to perform an initial risk analysis. This risk analysis mapped the countries from which Systembolaget purchases goods, taking as its
starting point the ten principles of the Global Compact. Particular focus was placed
on countries with large sales volumes. The challenges faced by producers and subsuppliers were linked to risks in production, to the environment and the situation
of employees. This last area included, among other things, workers’ pay, their union
rights, working environment and health. The analysis provided Systembolaget with
a risk pyramid, in which countries demonstrating the greatest risk of violation of
human rights, environmental risks and problems of corruption were placed highest
up. South Africa, Chile and Mexico were at the top, Argentina somewhat lower down.
The US, Italy and Australia were also included in the pyramid, since these countries
have problems with illegal labour and agricultural workers without work permits.31
The Nordic monopolies will, in the future, be able to use a web-based risk tool in
which the risk areas in countries will be updated on a regular basis. This risk analysis
tool has been developed by Alko and KPMG and is expected to be ready for use in
2014.32
Having built a platform for its sustainability work, in 2009 Systembolaget invited its
beverage suppliers to regular meetings for dialogue and briefing in which they were
informed of the changes they were expected to implement as part of sustainability
efforts.33
According to Göran Klintberg, acting Head of CSR at Systembolaget, early focus was
on practical measures such as how beverage suppliers could most easily integrate sustainability into their operations and how monitoring should be structured. A number
of meetings were also held with beverage suppliers and industry organisations at
which plans to introduce a system of monitoring as conducted by Systembolaget were
well-received. In 2012, terms of purchase were introduced under which beverage suppliers must comply with the Systembolaget code of conduct.
Systembolaget’s Head of CSR bears overall responsibility for these activities. In addition, there is one person with CSR responsibility in each department. Together, they
constitute the CSR Committee which meets every two months and whose goal is to
integrate sustainability into every area of the business plan.34
3.3.1 The Business Social Compliance Inititiative
The BSCI is a European, business-run association of more than 1,000 members who
share a common code of conduct, audit system and audit tool.35 The goal of the organ-
31 Johansson, Nina, Head of CSR, Systembolaget, telephone interview, 10 October 2013.
32 Klintberg, Göran, acting Head of CSR, Systembolaget, interview, 19 June 2013.
33Ibid.
34Ibid.
35BSCI, About BSCI, retrieved 21 August 2013 from www.bsci-intl.org/about-bsci.
17
isation is to steadily improve labour conditions at the workplaces that form elements
of members’ operations.36 37
In 2011, the Nordic alcohol monopolies in Sweden, Norway, Finland, Iceland and
the Faroe Islands agreed to adopt the BSCI code of conduct. The code of conduct
was introduced into Systembolaget’s operations on 1 January 2012. The code calls
for social and environmental responsibility in both the company affiliated and in its
supply chain. Consequently, it is expected that employees at the end of the chain of
production will be informed of their rights and of how the code will assure an acceptable social standard for them.38
Systembolaget’s decision to join the BSCI has been criticised by the organisations
behind the Ethical Wine Trade Campaign (Rättvis Vinhandel). They feel that the code
of conduct lacks important aspects including, for example, demands for a living wage.
The Ethical Wine Trade Campaign further highlights the problem that third-party
audits may find it difficult to build trust among employees.39
The BSCI’s code of conduct is based on a number of international frameworks, conventions and laws. In addition to the UN Universal Declaration of Human Rights, the UN
Convention on the Rights of the Child and the UN Convention on the Elimination of
all Forms of Discrimination against Women, it includes the UN Global Compact which
encompasses principles concerning human rights, labour law, environmental sustainability and corruption aimed at enterprises. It also includes the ILO conventions on
human rights at work and the OECD Guidelines for Multinational Enterprises.40
In 2011, the UN Council for Human Rights adopted the UN Guiding Principles for
Business and Human Rights. The guiding principles, which take their point of departure in the UN Protect, Respect and Remedy framework, are aimed at all states and
all enterprises and refer to the protection of internationally-recognised human rights.
As the BSCI code of conduct was drawn up in 2009, it does not include the principles
in the international agreements on which the code is based but they are expected
to be included in the BSCI revised code of conduct which will be presented in 2014.
There are expectations on the part of civil society that the new code will include wording on a living wage, for which Systembolaget has expressed support.
36BSCI, Our companies’ commitment, retrieved 12 October 2013 from www.bsci-intl.org/ourwork/our- companies-commitment/our-companies-commitment.
37 Swedwatch has described the criticism directed at BSCI in previous reports (see: Swedwatch, A
lost revolution?, 2012 and Swedwatch, Fruktade kemikalier på Costa Ricas plantager, 2013).
The criticism has focused primarily on the fact that the organisation is company-driven with
no representation from trade unions or stakeholders in its executive. The organisation has
responded to this criticism and trade unions and stakeholders are now represented in the BSCI
Stakeholder Council. They are, however, still not represented in the organisation’s Steering
Committee. BSCI has also been criticised for having poor transparency since the results of
audits are not made public, which in turn prevents civil society from exerting any influence.
38BSCI, Code of Conduct, 2009.
39 The Ethical Wine Trade Campaign, 2012 Vinets bittra eftersmak – lantarbetares villkor och
Systembolaget ansvar, (The Bitter Taste of Wine – Agricultural Workers’ Conditions and
Systembolaget Responsibility).
40 BSCI, 2009.
18
FACTS
International frameworks and conventions that regulate
human rights in working life
ILO core conventions
•• Conventions number 100 and 111 on equal treatment and discrimination
•• Conventions number 87 and 98 on the right to freedom of association and collective
bargaining
•• Conventions number 138 and 182 on the minimum age for employment and the ban
on child labour
•• Conventions number 29 and 105 on forced labour
UN Universal Declaration of Human Rights
•• Article 22 on social security and economic, social and cultural rights
•• Article 23 on the right to employment, equal treatment at work and freedom of
association
•• Article 27 on the right to the community’s cultural life
UN Convention on the Rights of the Child
•• Aims to give all children, irrespective of background, the right to be treated with
respect and to be given a voice
UN Convention on the Elimination of all Forms of Discrimination Against Women
•• Is based on the principle of equality between men and women which is to be
enshrined in national constitutions or other statutes by governments ratifying the
convention.
OECD Guidelines for Multinational Enterprises
•• Contains non-mandatory principles and standards for how businesses can be operated responsibly and in line with applicable legislation and internationally-recognised standards.
UN Framework and Guiding Principles on Business and Human Rights
•• Is based on three core principles which state that: 1) states have a responsibility to
protect and implement human rights, 2) enterprises must comply with all applicable
laws and respect human rights, 3) in cases where such rights and responsibilities are
not respected, the individual shall have the right have their case heard and remedied
in an appropriate manner.
Sources: UN, ILO, OECD.
19
The code of conduct is written into Systembolaget’s terms of purchase in its entirety.
The terms of purchase state that Systembolaget’s contract partners will introduce a
policy for social responsibility, that the management system will assure compliance
with the code and also establish and comply with an anti-corruption policy. They
also state that the company will ensure that the code is implemented in a correct
manner by the company and that the management, on a regular basis, monitors the
company’s assumption of responsibility. Even though Systembolaget has informed
the importers of the code of conduct at supplier meetings and similar events, it is first
and foremost through the terms of purchase, which are the same for all beverage suppliers, that the code of conduct is communicated.41
The terms of purchase also include decisions regarding the measures to be taken in
the event of non-compliance. As a last resort, Systembolaget has the right to terminate a contract if the supplier or producer of beverages breaches the code of conduct
and does not remedy any failures identified. This has, however, not been necessary to
date.42
3.3.2 Code followed up through audit
Systembolaget’s foremost tool for monitoring compliance with the code of conduct is
a third-party audit of the producers. If the auditor discovers deviations from requirements, the producer will fail the audit. An action plan will then be drawn up jointly
by the auditor and the producer which will clarify the measures the producer must
implement before a new audit takes place within a 12-month period. The company
performing Systembolaget’s third party audit is the American company UL Responsible Sourcing.43
Systembolaget was on site when half of the audits in South Africa were performed in
the spring of 2013 with the aim of obtaining a picture of how they are performed. The
company representatives are of the opinion that their presence is a way of minimising
the risk of corruption.
Through its membership of the BSCI, Systembolaget is committed to, 2013-2014,
performing audits of producers who collectively account for two thirds of purchasing
value from countries defined as risk countries, a target they will achieve, according to
Göran Klintberg.44 The list of countries defined as risk countries is based both on the
original risk analysis performed in 2009 and on the BSCI list. As it stands today, the
audits only cover producer production facilities. Consequently labour conditions in
the vineyards growing the grapes for production are not inspected.
Since Systembolaget introduced its code of conduct in 2012, a total of fifteen audits
have been performed. Three took place in 2012, of which one failed the company con-
41 Lindblad, Johan, corporate lawyer, Systembolaget, interview, 6 September 2013.
42 Klintberg, Göran, acting Head of CSR, Systembolaget, interview, 19 June 2013.
43 UL Responsible Sourcing, Auditing, retrieved 16 September 2013 from www.ul.com/global/
eng/pages/solutions/services/auditing/.
44 Klintberg, Göran, acting Head of CSR, Systembolaget, interview, 19 June 2013.
20
FACTS
The audit: a disputed tool
In recent decades the audit has become an increasingly common tool for companies
striving to deal with unsatisfactory social and labour conditions within their supply
chains. Audits can be a necessary first step in long-term sustainability efforts, however
despite the fact that hundreds of thousands of social audits are performed every year, it
is difficult to prove that they lead to continued improvement.
Many companies feel that social audits lead to nothing more than a fruitless cat-andmouse game which absorbs large amounts of resources without producing any real
results, something to which Swedwatch has drawn attention in a number of reports.
An increasing number of companies who have worked with social audits for a long
period of time have therefore decided either to abandon the audit model or to at least
combine it with other methods, such as better integration with purchasing or capacityraising measures for producers.
Sources: Shift, From Audit to Innovation: Advancing Human Rights in Global Supply
Chains, 2013, Swedwatch, Billig, snabb och lydig, 2004 och Swedwatch, Från noll koll till
full kontroll, 2012.
cerned.45 Twelve audits were performed in the spring of 2013, nine in South Africa
and three in Chile. All twelve producers failed and will be working with the programme of measures drawn up after the audits until the spring of 2014. The problems
revealed concerned working hours, pay and health and safety at the workplace.
“The audits have provided good answers and indicate that this tool is working satisfactorily,” says Göran Klintberg.46
Systembolaget has limited opportunities to reward producers who achieve a good
audit result. This is because under EU regulations, Systembolaget must act in a nondiscriminatory manner towards its suppliers. In addition, the final selection is made
through blind tasting to ensure best quality.
A new commitment to the BSCI will come into effect in 2015 when, in addition to
planned audits, Systembolaget intends to revisit the producers who were audited
2012-2014. This time both the wine producers’ own and independent grape growers,
that is to say their sub-suppliers, will be inspected.
According to Göran Klintberg, Systembolaget’s ambition for the future is to increase
the number of advance notice audits and the audits performed when the enterprise
has been made aware of unsatisfactory conditions at their producers. The number of
audits may be a matter of cost, since Systembolaget initially agreed to pay for
45 Two audits were what are known as flying visits when Systembolaget acted after the being
made aware of unsatisfactory conditions. No unsatisfactory conditions could be confirmed on
site so the producers were approved. The third audit was a sample audit. The producer failed
for, among other things, having exceeded the maximum amount of overtime allowed. Source:
Systembolaget, Ansvarsredovisning 2012, 2013, part 2, p.68.
46 Klintberg, Göran, acting Head of CSR, Systembolaget, e-mail, 3 October 2013.
21
social audits performed. The producer audits also imply a cost for the importers,
since they must pay for any re-audits in the event that problems are discovered.47
3.3.3 Audits expensive for producers
In the countries where retailers of alcohol operate under free competition, monitoring responsibility is different. Companies such as Tesco, Waitrose and Wallmart
insist that the producer pay for a re-audit. This can result in large producers being
forced to spend considerable sums of money on audit costs, something which could
be avoided if companies from different countries could agree on a common audit
system. Producers interviewed by Swedwatch in both Chile and South Africa raised
the question of audit costs. They all see the benefits of an audit, but believe that too
many audits can do more harm than good.
When Swedwatch asked Swedish importers of wine from Chile and South Africa
about audits, two of three said they were concerned about “audit fatigue”. This occurs
when the producer has undergone a number of audits within a short period of time
and where a further audit would not bring any significant benefits. Instead, both producers and importers would like to see increased coordination of monitoring systems
used by industry organisations and companies. Systembolaget, Alko and the Norwegian Vinmonopolet have coordinated audits of common producers in order to reduce
the number of audits and minimise cost. Systembolaget is not currently performing
any audits of their importers to check that they are complying with the code of conduct.
3.3.4 Self assessment
Another monitoring tool is the BSCI Self Assessment for Industrial Production
Questionnaire, a questionnaire which the producers themselves complete in order
to estimate how well their business complies with the guidelines and requirements
laid down in the code of conduct. Since only a few producers in the initial stage are
audited on site through third-party audits according to Göran Klintberg, the selfassessment questionnaire is a way for Systembolaget to gain acceptance for code of
conduct requirements with all their producers.48
The questionnaire asks how the producer communicates the BSCI code of conduct to
its employees, whether the code is translated into the language spoken by the workers
and how often information meetings take place between the employer and employees
at which the requirements of the code and national legislation are described.49
There is, however, a risk that the self-assessment will become a paper tiger unless an
audit is also performed.50 When an enterprise such as Systembolaget purchases wines
from several hundred producers and does not perform audits at each one of them,
many of these may be regarded as approved simply after completing the self-assessment questionnaire. It is difficult to know whether self assessments are effective when
47 Klintberg, Göran, acting Head of CSR, Systembolaget, interview, 19 June 2013.
48Ibid.
49BSCI, Self assessment for industrial production, internal document.
50UNCTAD, Corporate Social Responsibility in Global Value Chains, 2012.
22
Thousands of agricultural workers gathered near De Doorns during the farm workers’ strike in
2012/2013. Photograph: Steve Kretzmann
results are not reported. The general view, both within the academic world and the
NGO sector, is that there are both risks and opportunities associated with self assessment as a tool.51
Fatigue problems can also be found in the use of self-assessment questionnaires.
Producers with a large customer base may be forced to complete self-assessment
questionnaires for a number of companies.52 This may result in the producer feeling
overwhelmed, as witnessed by several of the producers interviewed by Swedwatch.
Göran Klintberg agrees that self assessment may appear too arbitrary but claims the
tool has a reasonable level of accuracy. In order to allow importers themselves to
check how the work is progressing, the self-assessment protocol is made available
to the Swedish importer with whom the producer is collaborating. Membership of
the BSCI provides the opportunity to upload the self-assessment protocols onto the
BSCI database. This makes them available to all BSCI members around the world. In
theory, this should reduce the number of self assessments a producer must undertake, but this is currently not general practice.
Systembolaget intends to apply a similar approach to follow up how Swedish importers assess that their work is progressing. A self-assessment questionnaire has been
developed in 2013 in order to measure importers’ sustainability activities and provide
51
Lerpold, Lin, senior lecturer, Stockholm School of Economics, Stockholm University, e-mail,
13 September 2013 and Nordbrand, Sara, sustainability analyst, Church of Sweden, telephone
interview, 16 September 2013.
52 UNCTAD, 2012.
23
a picture of their implementation process.53 Systembolaget may in the future also use
score cards which the importer will update on a regular basis. This will make it possible to rank importers according to how well they meet the requirements for sustainability, launch accessibility, delivery tracking and packaging complaints. The score
cards are currently used within the dialogue with importers only and not as an assessment tool.
3.3.5 Sustainability activities integrated into purchasing
In Systembolaget’s purchasing department, every purchaser is responsible for their
own specific purchasing area. They have undergone practical training in social
responsibility in the supply chain, focused on risks. Continuous competitive intelligence is performed by each purchaser by means of close, often daily, contact with
importers and producers. The purchasers also make several visits a year to their
purchasing areas, both to visit the producers whose products they already sell, and to
meet producers who have products which might be suitable for the Swedish market.
The employee responsible for CSR issues in the purchasing department handles the
contacts with Systembolaget’s Head of CSR. This employee is also a member of the
CSR Committee.
To date, the tools capable of steering Systembolaget purchasing towards importers
and producers who have a greater CSR commitment have not been fully integrated
into the Systembolaget purchasing processes. The BSCI database, which contains
detailed information regarding producers whose wines are sold at Systembolaget, is
not used in day-to-day business. Neither are the Alko risk analysis tool or score card
for importers ready for use, however Göran Klintberg says that Systembolaget has
realised the potential of introducing this information to the purchasers.54
3.3.6 Training and communication
In Chile and South Africa, Systembolaget has good contacts with the industry organisations, Wines of Chile and Wines of South Africa, whose local initiatives within the
area of sustainability are actively encouraged by Systembolaget. Through the Ethical
Wine Trade Campaign, Systembolaget has on several occasions met representatives
from local trade unions and agricultural workers in South Africa. Improved dialogue
with these organisations is something the company is looking into, explains Göran
Klintberg.55 Systembolaget is also trying to establish closer relations with trade
unions in Argentina, Chile and South Africa through the Swedish Municipal Workers’
Union and the global union federation IUL.56
In 2012 and 2013, Systembolaget visited Chile and South Africa to provide producers
with training and information regarding their sustainability activities and to conduct
roundtable discussions with union, and other, representatives. The BSCI has also
53 Klintberg, Göran, acting Head of CSR, Systembolaget, e-mail, 2 October 2013.
54 Klintberg, Göran, acting Head of CSR, Systembolaget, interview, 19 June 2013.
55Ibid
56 IUL/IUF International Union of Food, Agricultural, Hotel, Restaurant, Catering, Tobacco and
Allied Workers’ Association
24
held information meetings and training for producers. At these, the code of conduct
was presented to companies and other stakeholders in the industry.
The employees will in turn, in accordance with the BSCI system, be informed by
their employers by means of the code of conduct being posted at the workplace in the
language spoken by the employees, and through information meetings and training.
Something that Systembolaget, importers and the BSCI do not supervise. Since the
BSCI does not have the code translated into Afrikaans, or into any other local South
African language, the responsibility for communicating the requirements stated in
the code to employees lies with the producers.
3.4 Environmental activities
Along with its activities on social responsibility and human rights, Systembolaget has
also developed a long-term environmental plan. It was adopted in 2011 and covers
the period up to 2020.57
“Our sustainability activities in the last two years have also involved working conditions and social issues but will now also have agreater emphasis on the environment,”
says Lena Rogeman, Head of CSR environmental issues.58
In 2011, Systembolaget completed a survey in order to define its impact on the environment.
“The result showed that Systembolaget exerts a major impact on the climate and
on biological diversity, and also that there was a lack of clear leadership in its environmental activities. The biggest impact the enterprise has is through the products
sold in its stores, that is to say from cultivation, production, packaging materials and
transport,” states Lena Rogeman.59
FACTS
Organic, fairtrade and environmentally-labelled wines
(of 9,472 wines in the Systembolaget range)
•• Organic wines: 574 (91 in fixed range, 3 in temporary range, 480 in available
on order range)
•• Fairtrade labelled wines: 43 (26 in fixed range, 17 in available on order range)
•• Organic and fairtrade labelled wines: 16 (9 in fixed range, 7 in available
on order range)
•• Environmentally-labelled wines: 6 (3 i in fixed range, 3 in available on order range)
Source: Systembolaget
57 Systembolaget, Responsibility Report 2012, Part 1, p.5.
58 Rogeman, Lena, Head of CSR Environment, Systembolaget, telephone interview, 2 July 2013.
59Ibid.
25
Stipulating general environmental requirements is a problem since conditions can
vary considerably depending on the geographical location concerned, explains Lena
Rogeman. In contrast, it is easier for Systembolaget to impose conditions when the
problem is closer to its own organisation. For this reason, priority was given to the
following focus areas: demand for organic products, packaging, transport, production
and cultivation (in declining order).
The environmental stipulations laid out in the BSCI code regarding the way in
which the grapes are grown and the wine produced are relatively straightforward.
Systembolaget is aware that chemicals pose a major problem in general but has not
conducted any in-depth analysis of the use of chemicals in risk countries. At the
same time, the company assures the quality of its wines through random testing and
ensures that traces of any other products found in the wines do not exceed permitted levels in the country of production or EU regulations on limits regarding specific
chemicals in imported food commodities.
Replacing production of conventional products with organic imposes demands on
the entire production process. The process will take several years. Göran Klintberg
explains that the number of wine producers switching to organic production is controlled almost exclusively by demand from consumers.
In addition to environmental activities through BSCI, Systembolaget also participates
in two further initiatives. One is examining how to increase environmental activities within the supply chain in collaboration with the other Nordic monopolies. The
other is participating in a new project with the Foreign Trade Association (FTA) on
the development of the Business Environmental Performance Initiative (BEPI), the
equivalent to the BSCI within the environmental field. This is in order to be able to
reinforce environmental issues in the supply chain in a similar way to social issues,
explains Lena Rogeman.60
3.5 Organic, fairtrade and environmentally-labelled
products
The Systembolaget goal is to increase its range of organic and fairtrade products
every year. Regarding organic products, the goal is that these should constitute 10%
of sales volume by 2020. However, despite this and the frequent discussions on
environmental issues regarding organic food products in the media in recent years,
Systembolaget’s sales of organic wines fell slightly in 2012. Lena Rogeman believes
that one reason may be that their activities have not been sufficiently backed up by
communications, which is necessary for the customer to be able to make a conscious
choice. Regarding fairtrade products, Systembolaget does not have such clear goals
since fairtrade labelling does not occur in countries such as France, Italy or Australia
so it is more difficult to set up sales targets for these.61
60 Rogeman, Lena, Head of CSR Environment, Systembolaget, telephone interview, 2 July 2013.
61 Fairtrade labelling is only found in developing countries or in countries with large differences
in income distribution.
26
In 2003 Systembolaget introduced shelf labelling of organic items. The shelf labelling
of fairtrade and environmentally-labelled products was not introduced until 2012.
These products are labelled using different colour codes on the shelves on which they
stand in order to make the customer aware that the product is included in the various
sustainability ranges. Systembolaget is not, however, able to indicate on the shelf the
type of certification the product has due to a combination of customer benefit, financial feasibility and legal issues. This information is shown on the packaging only.
The level of commitment to organic, fairtrade and environmentally-labelled wines
among producers and importers varies, explains Lena Rogeman:
“Some have understood the importance of certification but in other cases an incentive
is necessary as they don’t see that it’s directly linked to increased sales.”
3.5.1 Fairtrade labelling
Fairtrade labelling aims to promote products which have been produced in circumstances that improve workers’ conditions through the payment of a reasonable wage,
respect for their right to organise and ban on child labour.62
Fairtrade is product labelling of items which aims to improve the working and living
conditions of growers and employees in developing countries.63 Certification is by
Fairtrade International (FLO) which performs independent inspections to assure criteria related to improved financial conditions, investment in local communities, prevention of child labour and discrimination, and the promotion of environmentallyfriendly and organic products.64
Fair for Life – the Swiss-based Institute For Marketecology (IMO) – performs inspections, certifies and checks organic, environmentally-friendly and socially fair products
with a focus on transparency between the buyer and the seller. The IMO Fair for Life
certification demands, in addition to fundamental social and environmental stipulations, fair working conditions throughout the chain of production.65
3.5.2 Organic labelling
The EU leaf – the EU’s organic products carry the EU leaf logo. In order to be able to
use this EU label, the product must be produced (at least 95%) from organic ingredients and the production process must fulfil EU requirements. The EU and member
62 Swedish Consumer Agency, Etisk och rättvis handel, retrieved 10 October 2012 from www.
konsumentverket.se/ vara-omraden/hallbar-konsumtion/etiska-varor1/verktyg-for-etiskkonsumtion/.
63 Fairtrade International, Standards, retrieved 6 September 2013 from www.fairtrade.net/
standards.html.
64 Fairtrade International, What is fairtrade, retrieved 31 October 2013-10-31 from www.
fairtrade.net/what-is- fairtrade.html.
65 Fair for Life, About For Life and Fair for Life, retrieved 6 September 2013 from www.
fairforlife.org/ pmws/indexDOM.php?client_id=fa irforlife&page_id=about&lang_iso639=en.
27
states organic logotypes are used to complement labelling and increase the visibility
of organic food and beverages.66
KRAV – KRAV is a non-profit association whose environmental labelling is found on
food from all over the world. In several respects KRAV has higher standards for its
certification than other organisations. This includes, for example, stricter demands
regarding protection of the environment, or that the product’s packaging materials
must be environmentally adapted.67
Demeter – Demeter is an international network of control organisations promoting biodynamic cultivation and its products. Demeter certification encompasses a
resource preservation ecocycle approach in which plant cultivation and animal husbandry balance each other to create, as far as is possible, a self-sufficient organism.
For this reason, biodynamic certified products are also organic.68
Ecocert – the French-based Ecocert is an international network which has, since its
inception in 1991, specialised in organic agricultural methods and products. Wines
certified by Ecocert are produced from organically grown grapes free from biocides
and can be found in Systembolaget’s product range.69
3.5.3 Climate labelling
CarbonNeutral – the CarbonNeutral Company certification guarantees carbonneutral products, that is to say that the use of carbon dioxide in production has been
compensated for when the product is sold. 70
Carbon Neutral Product –the Carbon Reduction Institute’s NoCO2 programme also
guarantees that certified products are carbon-neutral.71
3.6 Swedish importers
Systembolaget has around 900 registered beverage vendors of varying sizes. Some
have product ranges consisting of wines, beers, spirits and liqueurs, while others specialise in one of the beverage categories. The Swedish importers Swedwatch reviews
in this report represent well-known manufacturers marketing brands popular with
Swedish consumers. Importers are reported in order of size.
66 European Commission, Du kan lite på EU:s ekomärkning, retrieved 6 September 2013 from
ec.europa.eu/news/agriculture/120704_sv.htm. EU Organic Logo – A Mark of Trust
67Krav, Krav-märkningen, retrieved 6 September 2013 from www.krav.se/krav-markningen.
68Demeter, Odlingsmetoden, retrieved 6 September 2013 from www.demeter.nu/index.
php?id=4.
69Ecocert, Our approach, retrieved 31 October 2013 from www.ecocert.com/en/our-approach.
70 The Carbon Neutral Company, CarbonNeutral certifications, retrieved 31 October 2013 from
www.carbonneutral.com/our-services/carbon-neutral/.
71 Carbon Reduction Institute, Carbon Neutral certification, retrieved 31 October 2013 from
www.noco2.com.au/certify
28
COMPANY
OENOFOROS
PRIME WINE
SWEDEN
CONCHA Y
TORO SWEDEN
MIGUEL TORRES
SVERIGE
Start year
1994
2002
2009
1998
Product range
Wine, spirits,
liqueurs
Wine, spirits,
liqueurs
Wine
Wine
No. of producer
countries/producers
11/27
14/40-50
3/5
9/15
Sales at System­
bolaget 2012
(thousand litres)
20 500
17 700
4 200
780
Turnover 2012
(MSEK)
Excl. alcohol tax
935
399
163
62
No. of employees
36
15
9
7
Member of BSCI
No
Yes
No
No
Source: Swedwatch interviews with each company and www.allabolag.se.
3.6.1 Oenoforos
Oenoforos is Sweden’s largest single importer of wines sold at Systembolaget and
turned over MSEK 935 in 2012.72 According to the company website there are over
174 items in its catalogue, the vast majority of wine is produced by about 25 producers from eleven different countries. Of these, less than 10% are from South Africa,
Chile or Argentina.73 However, two of Systembolaget’s bestsellers come from this
company’s portfolio. Sweden’s most popular red wine, Umbala, and its counterpart
among white wines, Zumbali, are both produced in South Africa and are consumed
frequently by Systembolaget consumers. Nearly ten million litres was consumed in
2012 which meant that Oenoforos, due only to these two wines, accounted for 5% of
all wine sales.74
Oenoforos has chosen not to allow an interview with Swedwatch concerning its sustainability activities. Nor is there any information on the company’s website or other
public information in the form of an annual or sustainability report on how Oenoforos works with CSR issues.
Consequently, the Swedwatch analysis of the extent to which Oenoforos takes responsibility for communicating Systembolaget’s code of conduct down its supply chains
has been carried out based on the responses received from the Oenoforos producer
Koopmanskloof in South Africa.
72 All companies – Oenoforos AB, retrieved 31 Oct 2013 from www.allabolag.se/5564939188/
Oenoforos_AB.
73Oenoforos, Product range, retrieved 12 Nov 2013-11-12 from www.oenoforos.se/Sortiment.aspx.
74 See: Systembolaget, Systembolagets försäljning per de 50 största leverantörerna 2012, 2013
och Systembolaget, Systembolagets försäljning per de 50 största märkena 2012, 2013.
29
3.6.2 PrimeWine Sweden
Along with the beverage importers Mondo Wine, BGS Wine Import and Multibev,
PrimeWine Sweden is included in the PrimeWine Group. PrimeWine is Sweden’s
second largest wine importer in terms of total sales, both SEK and volume, in Systembolaget stores. The company has grown rapidly over the course of the last decade and
has established a series of blockbuster brands, including popular bag-in-box wines.
Almost half of company turnover comes from the sale of wines from South Africa,
Chile and Argentina.75
The PrimeWine Group took the decision to introduce corporate social responsibility and sustainability into all company operations in 2010 and today, CSR forms an
integral part of the Group’s business development according to Martin Horwitz, CSR
Manager at the PrimeWine Group. Sustainability initiatives are well established in all
company management teams and all departments work, in one way or another, with
company CSR undertakings.76
As a direct consequence of Systembolaget including its code of conduct in its purchasing conditions, in May 2012 the PrimeWine Group became a member of BSCI. The
group of companies and its subsidiaries are the only BSCI members among Sweden’s
alcohol importers.
The CSR Manager, Martin Horwitz, is responsible for the monitoring of the code
along with the product managers. Their main tool is social audits carried out by third
party auditors. The company has chosen, as has Systembolaget, to focus first on the
producers responsible for the greatest proportion of the wines sold each year. The
eight largest producers PrimeWine collaborates with account for about 89% of total
company sales volume from risk countries. By summer 2014, it is hoped to have conducted audits on six of these eight producers.
Martin Horwitz thinks that communications on the changes that the code of conduct
has meant for Systembolaget, Swedish importers and wine producers has worked well
from Systembolaget’s side. He also believes that PrimeWines’ membership of BSCI
has helped the company to understand what will be required to achieve Systembolaget objectives for its sustainability efforts. The code’s requirements have first been
communicated to the company’s producers by providing them with the BSCI information package, producers have then signed the code of conduct, filled in self-assessment form and, in some cases, even booked an audit. The fact that the requirements
of the code of conduct should also be communicated to the workers is included in the
BSCI information package, however this is carried out by the producers themselves
and is nothing PrimeWine is involved in.
Overall, Martin Horwitz feels that most producers were positive to Systembolaget’s
introduction of its code. Even if some had some criticism, most understood the benefits and value of it. Many think it is good that they have chosen an internationallyrecognized code that will hopefully lead to less “audit fatigue”.
75 Horwitz, Martin, CSR Manager, PrimeWine, e-mail, 1 Oct 2013.
76 Horwitz, Martin, CSR Manager, PrimeWine, interview, 29 August 2013.
30
Martin Horwitz says that much of the company’s work with supplier responsibility
concerns working with existing producers rather than establishing new ones. In their
ongoing collaboration, the purchasing department carries out continuous risk analyses of environmental and social conditions. This means, among other measures, analysing the BSCI self-assessment form which producers fill in. The purchasing department also makes several visits a year on site in risk countries. primarily the producers
they already collaborate with are visited, but also new potential business partners.
PrimeWine gains knowledge of any poor conditions at a producer company either
through direct contact with the producer, through local unions or from reports
from organizations such as Human Rights Watch or Fairtrade International. In the
summer of 2013 the CSAAWU union sent a warning letter to one of PrimeWine’s
producers, Robertson Winery, where the union argued that farm workers at the company’s farms had been dismissed on unfair grounds. The reporting of discrepancies
resulted in an audit by WIETA to determine if there was evidence to support the complaints.77 The results of the audit and the legal process that followed are described in
Section 4 which includes field studies in South Africa.
When asked whether PrimeWine always knows where its wines come from, Martin
Horwitz responded that they do as far as possible. But he also admits that it is more
difficult to check the wine produced from grapes sourced from outside growers that
the producer has not maintained a long term relationship with.
“We will never be able to have total control of all the wine produced,” says Martin
Horwitz.
The proportion of organic and ethical wines from South Africa, Chile and Argentina
now form 9% and 4% of total sales. PrimeWine admits that this is still a minor part,
but the company’s ambition is for this share to grow.
3.6.3 Concha y Toro Sweden
The Concha y Toro Sweden Import company was founded in 2009 to manage the
import and distribution of Chilean Concha y Toro wines in Sweden. In addition to
Concha y Toro’s own wines, it also imports products from producers owned by its
parent company. These include Viña Maipo in Chile, Trivento in Argentina and the
American Bonterra and Fetzer brands. Almost all brands, representing approximately
90% of all wine Concha y Toro Sweden sells in Sweden, are owned by the parent
company in Chile. Chile and Argentina account for 93% of the wines imported, the
remaining 7% is imported from the USA. Among the company’s top sellers are Viña
Maipo and Casillero del Diablo.
Peter Lidvall, Country Manager Sweden at Concha y Toro Sweden, says the company
began working with sustainability issues seriously when the parent company purchased the American company Fetzer in January 2012. Since Fetzer wine producers
were Krav Certified, Concha y Toro Sweden had to undergo the required certification
for import and introduction of Krav labelled products. Concha y Toro Sweden has
77 WIETA (Wine Industry Ethical Trade Association) is a business sector initiative aimed at
improving working conditions for South African agricultural workers.
31
a designated environmental manager, but Peter Lidvall is also involved in the company’s sustainability activities.78
Peter Lidvall believes that the company has a good relationship with Systembolaget
and the dialogue concerning CSR issues has been satisfactory, although these issues
are not discussed regularly. Daily contact with the parent company Concha y Toro in
Chile relates exclusively to sales. Peter Lidvall is convinced that the producer audits
will lead to improvements. Consequently he feels that it is acceptable that importers
will be responsible for the costs incurred for any repeat audits.
Peter Lidvall is also concerned about the risk that winemakers may suffer from “audit
fatigue”. Since Concha y Toro Chile collaborates with several other big retailers who
have their own monitoring systems, the company is audited relatively frequently.
When Systembolaget audited three of Concha y Toro’s plants in spring 2013, it was
the fifth audit in a period of one year. As a result Peter Lidvall would appreciate more
coordinated activities.79
Concha y Toro was, through its importer Concha y Toro Sweden, informed that an
audit would be carried out at the facility more than two months in advance. Despite
this, Concha y Toro of Chile failed the audit. During the audit several problems were
identified, the most serious concerning overtime, which the company is compelled
to solve before the re-audit in autumn 2013 according to Peter Lidvall. He argues,
however, that the vast majority of problems were relatively easy to fix, and that he has
high hopes of being approved at the re-audit.80
Concha y Toro in Chile has its own code of conduct, is certified according to the
industry organization Wines of Chile’s Code of Conduct and sells wine to other major
global retailers who have their own codes.81 Despite this, Systembolaget has recieved
good response from Concha y Toros regarding the Systembolaget sustainability
efforts. However, even if the company’s management has attended meetings organized by Systembolaget, it is doubtful whether the information was disseminated down
the chain to all the employers in the organisation. It cannot be assumed that all the
employees around the vineyards of Chile are aware of the BSCI code.82
Concha y Toro of Sweden uses audits only for monitoring. The company has not seen
the self-assessment reports that Systembolaget requires producers to fill in. Peter
Lidvall also tells us that Cocha y Toro Chile has a complaints mechanism through
which employees can express their grievances, however, the parent company in Chile
not said about how it is used or if the system has led to any changes.83
78 Lidvall, Peter, Country Manager Sweden, Concha y Toro Sweden AB, interview, 10 Sept 2013.
79Ibid.
80Ibid.
81 Wines of Chile is an industry organisation that represents Chilean wine producers and
promotes the export of Chilean wine. Wine of Chile is described in more detail in the four field
studies of Chilean wine production.
82Ibid.
83Ibid.
32
Organic and fair trade wines are a tiny part of Concha y Toro Sweden’s sales, 5% and
1% respectively. The company is aiming to increase its sales of these wines and Peter
Lidvall welcomes the fact that the Systembolaget has increased the number of tender
invitations concerning wines in these categories.
“In the end it is the consumer who decides even if Systembolaget could be better at
informing their consumers about their ecological and ethical lines. There must be a
change of attitude among consumers today as too few of them care about environmental and ethical issues,” says Peter Lidvall.84
3.6.4 Miguel Torres Sverige
The Spanish company Miguel Torres has established the import company Miguel Torres
Sweden to deal with the import and distribution of the company’s wines in Sweden. The
company mainly imports wines from the parent company’s own production in Spain
and Chile, but it also cooperates with producers in seven other countries including Italy,
France, Australia and Portugal. Chilean wines are responsible for about 13% of total
sales. Wines from Argentina and South Africa together account for less than 1%.85
Karin Bergenfur, Brand Manager and newly appointed CSR Manager, says that it
became clear that no-one was taking care of CSR issues when Miguel Torres Sweden
recently restructured. She admits to having only recently started to look at how to
include sustainability issues in their operations.
“We need to clarify our intentions and formalise our CSR commitment and work on
follow-up in our operations,” says Karin Bergenfur.86
The aim is to act as an independent importer and examine both its own brands and
the wines that they buy in.
But even if Miguel Torres Sweden have not worked actively with CSR issues in the
past, social responsibility has long been a central element of Miguel Torres’ international operations states Karin Bergenfur. Much of their operations worldwide are
controlled by the parent company in Spain. Including scrutiny of their own production, which covers winemaking in Chile. But since it is Miguel Torres Sweden supplying to Systembolaget, they now need to begin to assume greater responsibility for
conditions at their producers in Argentina and South Africa she says. None of Miguel
Torres Sweden’s producers in Chile, Argentina or South Africa was the subject of Systembolaget audits in 2013, but Karin Bergenfur says that an audit in Chile is scheduled for 2014. Meanwhile, they will evaluate the tools necessary to follow up compliance with code of conduct requirements.
That importers may be also audited Karin Bergenfur regards as a matter of course.
But she is unsure if Systembolaget has chosen the most efficient methods.
84Ibid.
85 Bergenfur, Karin, CSR manager, Miguel Torres Sverige, interview, 11 Oct 2013.
86Ibid
33
“Scorecards could be an interesting measuring tool, creating incentives for importers
to drive sustainability programmes forward, if it led to more listings.87 There are risks
that self-evaluation becomes arbitrary, and who checks it? We could accept an independent review of importers’ sustainability efforts instead,” she states.88
Miguel Torres Sweden has noted that Systembolaget is attempting to steer the supply
towards more ecological and ethical wines. Today the company’s range includes 3%
organic wines and around 5% ethical, numbers they hope will increase in the future,
primarily by switching their own production to organic among the listings they
already have. They are also actively looking for new producers with a special focus on
ecological and ethical wines.89
Karin Bergenfur feels, however, that in the present situation it appears that the Systembolaget is expanding its range of ecological and ethical wines well above the level
of consumer demand. Then you must be very clear as to why consumers should buy
these instead of conventional wines.
A selection of responses that the importers have given to key questions in Swedwatch
interviews is given in the following matrix:
COMPANY
OENOFOROS AB
PRIME WINE
SWEDEN AB
CONCHA Y TORO MIGUEL TORRES
SWEDEN AB
SVERIGE AB
What percentage of
total sales comes from
the risk countries:
South Africa, Chile and
Argentina?
Argentina: 3%
Chile: 21%
South Africa:
24%
Argentina: 5%
Chile: 88%
Is there a risk analysis
regarding environmental/social conditions?
Yes, via commer- Yes, via commer- Yes
cial intelligence cial intelligence
and on site visits
and the BSCI
SAQ
Argentina: <1%
Chile: 13%
South Africa:
<1%
Yes it is a key
issue
Yes
Yes, it is a
precondition for
cooperation.
Do you require that
producers provide full
information on their
sub-suppliers?
Yes
Yes
Yes
Do you currently
consider that you have
full/good control as
concerns producer
compliance with the
code of conduct?
Yes for the larger In Chile yes but
producers. No
not in Argentina
for the smaller.
Is sustainability an
important factor when
looking for new cooperating partners?
No
answers
87 A listing means winning a tender procedure.
88Ibid
89Ibid.
34
In Chile yes but
not overall
4. Final analysis
Swedwatch has, in its case study, showed that employees in the wine industry in
South Africa, Chile and Argentina are working in an industry associated with low
wages, union discrimination and precarious employment conditions. Systembolaget
has also identified this as a priority risk in their sustainability activities, which is the
first step in their efforts to ensure that the company does not contribute to human
rights violations and may actually contribute to solutions.
Since 2008, Systembolaget has increased its efforts within the company and in its
supply chain and, since 2012, also reached out into production in the risk countries
i.e. South Africa, Chile and Argentina. Swedwatch believes it is a wise decision to initially prioritise sustainability in these countries based on the risk analysis carried out
in 2009. In addition, Systembolaget has undertaken communication activities among
importers, producers, industry organizations and trade unions.
The weak points in Systembolaget’s sustainability efforts as identified by Swedwatch
in their review, are primarily the following:
• Systembolaget has elected not to perform more thorough and continuous risk
assessments and take more specific measures based on these. This is something
that is recommended by the UN Guiding Principles on Business and Human
Rights and which would mean that Systembolaget could implement more targeted
interventions in different regions. For example, Systembolaget by conducting
regional analyses in South Africa, would find out via EIT, Wieta, the agricultural
unions and international companies such as Tesco, the situation on the farms they
buy from as concerns basic human rights in the workplace.
• Systembolaget has not given priority to following up Swedish importers’ introduction of their code. The company has certainly communicated requirements and
introduced them into their purchase agreements, but has not yet followed up with
formal verification. The Swedwatch examination reveals a varied level of commitment by importers, where some place great emphasis on sustainability while
others do not even wish to communicate their activities. Consequently outsiders
cannot know if importers take Systembolaget’s code of conduct seriously or if it
ends up in a desk drawer. With the right measures, Systembolaget would be able
to encourage the importers themselves to focus more on sustainability, providing much greater multiplier effects than if Systembolaget itself were to check the
entire supply chain.
• Systembolaget has announced that they will begin to require self-assessments
from importers as well. This measure should be accelerated and ambitions
expanded. For example, Systembolaget should request various forms of documentation to prove that importers have communicated code contents to their supply
chains, including out to workers in grape cultivation, and to ensure that there are
proper channels for employees to file complaints.
35
Vineyard in Curicó. PHOTOGRAPHY: Lisa Karlsson
• Systembolaget has not conducted follow-ups where the risk is greatest. The pro-
ducers that have been audited are the producers of the absolute largest proportion
of wine sold in Systembolaget stores so that Systembolaget can cover as much of
their total sales as possible. However, only production plants have been examined,
not the vineyards where the grapes are cultivated. Consequently Systembolaget
has not reached out to the areas where the problems are potentially the greatest.
• Systembolaget should look at how the purchasing process can be guided towards
sustainable suppliers. The selection of wines that eventually reaches Systembolaget store shelves occurs through blind tasting. Thus, Systembolaget is not currently able to take special account of parameters such as good working conditions,
living wage and other added values for the consumer. Systembolaget should therefore examine whether, as is done in Finland, it is possible to include some type of
ethical element into the final choice of a product. Also information to consumers
about both the problems that occur in the supply chain and that there are alternatives such as organic and fair trade goods could be improved.
Although the Systembolaget does not actively request cheap wines, these can enter
the fixed range of products via the wined for order range. There are two problems
with these wines; there is not the same transparency in the supply chain because Systembolaget does not require complete information about the sub-suppliers of wines
in this product range and secondly a smaller part of the final price goes to the farm
workers. Only about SEK 40 (of which SEK 4-6 is calculated to be wages for agricul
36
tural workers) of a bag-in-box wine sold for SEK 160 in Systembolaget stores goes
back to the producer and its employees. The remaining SEK 120 stays in Sweden,
mainly in the form of taxes. If Systembolaget could inform their customers more
often about the conditions different wines are produced under, customers would be
able to make more active choices. In this way, agricultural workers’ opportunities to
earn a living wage would increase.
In summary, Systembolaget should review its strategy and analyse whether audits
can be combined with other methods, in addition to better integration with purchasing also capacity building measures for producers. Union discrimination is hard to
curb through audits and methods other than social audits are apparently necessary to
increase respect for this fundamental right. For example it is noteworthy that Miguel
Torres in Chile obviously acted in an anti-union manner when employees wanted to
start one, even though the producer is certified through Fair for Life and has undergone audits by Wines of Chile.
In light of this, Systembolaget should look into the opportunities of building up or
participating in local complaint mechanisms that enable continuous feedback from
local unions and NGOs, and contribute to increased dialogue between workers and
employers. This measure is also based on the UN Guiding Principles on Business
and Human Rights which advocates that those potentially affected by the violation of
their human rights should be entitled to restitution.
Systembolaget has shown a genuine interest in discussion with local organizations
and the unions, thanks to the Ethical Wine Trade Campaign that brought together
local stakeholders and Systembolaget, but it is obvious that there is undeveloped
potential in enhanced dialogue with the workers. None of the companies interviewed,
not Systembolaget nor importers nor producers, really even knows if the code has
been communicated locally to the workers – but merely assume that this is the case.
Employee training regarding labour issues and human rights is one of the primary
tools businesses should use in their work with supplier responsibility.
Another area which obviously requires more effort is the use of chemical biocides
in the wine industry. Organic cultivation prohibits the use of synthetic biocides.
Although FairTrade and Fair for Life certification do limit the use of biocides in the
wine industry. However, the publications available on the use of biocides in BSCI,
Wieta and Wines of Chile codes are too weak as they allows chemicals approved by
national legislation. In South Africa, Chile and Argentina’s this means that biocides
such as paraquat, which is banned in the EU, is perfectly legal. It is therefore encouraging that Systembolaget wishes put focus on this aspect in their sustainability efforts
going forward.
According to Systembolaget, their information on living wage cannot be more than
recommendations. Systembolaget and importers should be advocating a wage higher
than the statutory minimum wage, and working to ensure that countries increase
their minimum wages to living wages. In South Africa’s case it is obvious that the government knows that the minimum wage is currently too low. Consequently it is very
important that Systembolaget and other major players clearly signal the South African actors that raising the minimum wage to a living wage rate is the only right thing
37
to do. The Swedish government should also emphasise this message in talks with the
each country’s government.
During this study, Systembolaget has been admirably transparent and positive to the
process. This is a very good precondition for constructive work going forward because
Systembolaget, as state-owned company, must take full responsibility for reducing its
negative impact on human rights and the environment and maximising its ability to
contribute to improvement.
5.Recommendations
Systembolaget should:
• Study whether there are ways of integrating sustainability aspects into the pur-
chasing process so that producers and importers who meet sustainability requirements are rewarded.
• Expand monitoring activities to inlude methods other than audits, methods such
as extended contact with local trade unions, NGOs and employees, developing
complaints mechanisms and capacity building for producers.
• Ensure that the code is translated and available at all producers and their
­suppliers.
• Eventually encompass their entire supply chain with auditing; from importers to
vineyards.
• Together with other global players, review opportunities to coordinate audits.
Continue to follow Wieta and WoC’s initiative and possibly coordinate monitoring.
Move tender invitations towards wines certified by them.
• Establish a clear schedule for the company is to carry out monitoring in Europe,
Central and North America and Australia.
• Enhance its efforts to inform its customers about its fair trade and the organic
product range, for example through better in-store marketing.
Importers should:
• Work more actively to implement the requirements of the code of conduct down in
their supply chains, including by ensuring that it is translated and available from
all producers and their suppliers.
• Increase transparency in supply chains for external stakeholders in order to facilitate review.
38
The Swedish state should:
• Actively guide Systembolaget’s future sustainability initiatives into line with the
above conclusions and recommendations.
• Maintain dialogue with the South African, Chilean and Argentine governments on
wages, human rights and union organisation.
39
40