The centralisation of grocery trade has also stirred up concerns in Finland, with Kesko and S Group commanding a combined share of over 70 per cent of the market. (Credit: Irene Stachon – Lehtikuva)

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MIKKO HELANDER, the chief executive at Kesko and board member at the Confederation of Finnish Industries (EK), has vented his frustration with the deep-rooted monopolies and high tax rates in Finland.

“Finland is still the promised land of monopolies compared to many other European countries,” he writes in an article published on Tuesday by EK.

Helander expressed his exasperation especially with the state monopoly on the retail sales of alcohol and the monopoly in the private pharmaceutical retail sector, but added that reforms are necessary also in the energy and health care industries.

“All measures to tear down monopolies and promote competition are important. Free competition is the best means to facilitate improvements in labour productivity. Monopolies sustain inefficiencies,” he argued.

He did not, however, broach on a topic that was the subject of rife public debate a few years ago: the centralisation of the grocery trade in Finland. Kesko and the S Group are currently by far the largest operators in the industry, with market shares of over 30 per cent and 40 per cent, respectively.

The Finnish government amended the competition act in early 2015 to ensure companies with an over 30 per cent share of the national grocery retail market can be penalised for abusing their dominant market position.

Helander also lashed out at the high tax rates in Finland, estimating that they are a consequence of the bloated public sector and undermining the country’s competitiveness relative to competitors.

“We should approach this as a single entity,” he wrote.

“Municipalities and the state are collecting as much taxes as they possibly can, but the tax revenues are still not high enough and they have to run up more debt. The alarm bells should be ringing when tax rates are this high at the peak of the economic cycle. We have to have the courage to renovate the system more thoroughly,” pleaded Helander.

Aleksi Teivainen – HT
Source: Uusi Suomi