Responsible procurement, the Nordic way

Alko takes responsibility for the human and labour rights as well as the environmental issues of alcohol-producing countries via the products it acquires for sale. The Decree on the Operation of the Alcohol Company as well as Alko’s monopoly status regulate its procurement activity.

1. Why has Alko started to promote sustainable procurement?

Alko is indirectly responsible for the working conditions and employment terms of the workers of the companies from whom it buys products.

Particularly in many risk countries, labour legislation and its monitoring do not always reach the level of international agreements, and employees’ safety and security are inadequate.

Our goal is to ensure that suppliers comply at least with national legislation or international labour agreements, whichever ensures a better position for employees. Recognised social responsibility risks of the delivery chain include neglect of working hours legislation, inadequate occupational health and safety, and use of child or forced labour.

Alko is aware of the fact that agriculture, to which viniculture belongs, is more challenging than usual due to seasonal labour, among other things, and for this reason there is good cause to pay particular attention to responsible procurement.

2. How has Alko started to promote sustainable procurement?

  • In responsible procurement, Alko has adhered since 2012 to a responsible procurement programme based on the principles of the UN Global Compact.
  • In 2012 Alko received assurances from its suppliers that their products are produced ethically. All of the products in Alko’s general selection and, based on sales figures, the most active sale-to-order selection products purchased by customers are covered by assurances in terms of compliance with ethical operating practices. Suppliers must give assurances for all new products.
  • Alko audits the products of risk countries. This is done on Alko’s behalf by external auditors recruited by BSCI.

The first audit arranged by BSCI on Alko’s behalf was conducted in Chile in March 2012, when two independent auditors visited one large wine-producing facility as well as vineyards.

The audit found that the situation relating to labour and human rights at the production facility and vineyards was good, and that environmental issues were also on a good level. As aspects requiring corrective measures were highlighted in the audit, these aspects were audited again in spring 2013.

  • Audits will continue. By the end of 2014, 60–70 per cent of Alko‘s wines originating in risk countries will be audited.

3. What does auditing mean in Alko’s responsible procurement?

In the audits, the conditions of workers at wine production facilities are inspected. The audits are being launched in risk countries, the first being Chile, Argentina and South Africa.

Sweden’s state-run alcohol monopoly Systembolaget also conducts audits, and we have coordinated audits so that we do not audit the same products and production facilities. Audited products are registered in the BSCI system. Via the system, we also obtain information about audits of other alcohol producers.
Alko and the other Nordic alcohol monopolies make field trips to producing countries. On these trips, Nordic countries’ demands for responsible procurement are explaine to local labour market authorities, professional organisations and companies that conduct audits.

4. Do the audits only cover wines?

All goods suppliers must give an assurance that their products are produced ethically. A product’s country of origin or product group is not decisive. In other words, the assurance on ethical products covers spirits, wines, beers and other products.

5. When did Alko actually begin to build a responsible supply chain?

The actual work began in 2008.

At that time, Alko joined forces with the other Nordic alcohol monopolies to determine how best to promote responsible procurement.

In addition to Alko, these monopolies are Sweden’s Systembolaget, Norway’s Vinmonopolet and the monopolies of Iceland and the Faroe Islands. Alko cooperates in other areas with these monopolies, and promoting responsible procurement was a natural part of this cooperation.

Part of the reason for the cooperation was the fact that the total quantities of wine purchased by the alcohol monopolies are significant.

In joint negotiations, all of the monopolies decided to require their suppliers in future to comply with the Global Compact initiative, in which companies are requested to adopt, support and implement in their own sphere of influence fundamental values relating to human rights and employment principles as well as to the environment and anti-corruption activity.

The cooperation of Alko and the other Nordic alcohol monopolies continues.

6. What is meant by a certified product?

Such products are certified as being organically produced (the product has an organic certificate) or they are ethically produced (the product has a certificate authenticating its ethical production).

The certificate is identified by a symbol.

In Alko’s selections, there are currently two ethically certified product groups: Fair Trade (Reilu Kauppa) and Fair for Life. On the shelf edge labelling, the products have both a blue ethical trade symbol and either a Fair Trade or a Fair for Life symbol.

Fair Trade and Fair for Life products have a generally accepted audit system, but Alko does not commission audits for these products.

7. What products are available at Alko’s Helsinki Arkadia (Flagship) shop?

The shop has all of Alko’s organically certified as well as Fair Trade and Fair for Life products.