GENERAL AGREEMENT ON a2s^6 5

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1 RESTRICTED GENERAL AGREEMENT ON a2s^6 5 TARIFFS AND TRADE Limited Distribution Original: English STATE-TRADING ENTERPRISES Notifications Pursuant to Article XVII;4(a) FINLAND I. Enumeration of State-trading enterprises Enterprise (a) Alcohol Company Products Wine Spirit Alcoholic liquors Substances containing more than 2.25 weight percentage of ethyl alcohol (b) State Granary Grains II. III. Reason and purpose for introducing and maintaining State-trading enterprises Description of the functioning of the State-trading enterprises (a) Alcohol Company On 2 February 1932 the Finnish Diet promulgated a law on alcoholic beverages in which the foundation of Oy. Alkoholiliike Ab. was laid down. The majority of the shares of the company are State-owned. The company has the sole right to import wines, spirits and alcoholic liquors, i.e. substances containing more than 2.25 weight percentage of ethyl alcohol, and to manage the production of alcoholic beverages in Finland. It may, however, transfer production rights by contract to private enterprises for a fixed time. The company itself has the sales monopoly. Moreover, it should be mentioned that the Alkoholiliike follows a policy that aims at both the removal of illegal sales and reduction of consumption in general as much as possible (Alcohol Law, paragraph 5)«The import and export of alcoholic beverages are the exclusive right of the Alkoholiliike. However, private persons and companies to which the Alkoholiliike has granted the right to manufacture alcoholic beverages are allowed to export their products. For such an export, the authorization of the Board of Directors of the Alkoholiliike is required separately in each case.

2 Page 2 The export is determined by the amount of products available and by foreign demand. Import is determined by the national needs. Export prices are fixed on the basis of the production costs and the prices on the world market. Import prices are fixed by adding to the self-cost price costs, calculated on a normal basis, the gain to be obtained by the monopoly. The prices of imported goods and of national products are fixed on a similar basis. There is no practical basis for a comparison between these prices, on the one hand, and export prices on the other. -' - There are no long-term import agreements. As far as exports are concerned, such agreements are sometimes made, due to engagements assumed by the government in connexion with commercial treaties with certain countries (e.g. the Soviet Union). The prices are, however, fixed in this case also in accordance with the situation on free markets. (b) State Granary The activity of the State Granary is prescribed by the laws of 30 December 1961 and 27 July 1962, which replace the lawof 1951 on the establishment of the State Granary. The purpose of the State Granary is to secure the supply of grain in Finland by purchases and storing, keeping stable at the same time demand for and prices of domestic grain. Moreover, the State Granary is the purchaser of grain needed by institutions and establishments belonging to the State. The Council of State is entitled to rule that only the State Granary is allowed to import grain. A decision to this effect was made on JO December 196l. It does not, however, include imports of grain in quantities under 50 kilos, neither imports of seed grain or malting barley. In foreign trade the main activity of the State Granary is the importation of cereals. Exports are limited to cases where they are necessary in order to avoid storing difficulties or for other similar reasons. Private persons can also import and export cereals if the State Granary considers it appropriate. The State Granary is not itself engaged in production. It sells the foreign cereals for further processing to all Finnish mills under the same conditions. The mills can buy Finnish cereals freely, but the State Granary, nevertheless, buys certain quantities of Finnish cereals in order to ensure a certain" price level for the Finnish production. Products made with cereals are not submitted to price control, but this level is in practice set by the price of the mixture of raw materials which is used by the mills for grinding. The price of this mixture, again, is fixed by the government.

3 Page 3 When imports and exports are calculated, the total need of cereals for consumption, the need for storing and the volume of domestic production are, among other facts, taken into consideration. Also trade agreement aspects may be taken into consideration when above-mentioned calculations are carried out. The export prices of cereals are determined by world market prices. Long-term agreements for the import of cereals are normally made within the frames of commercial agreements between Finland and other countries. Smaller quantities of cereals from abroad are normally purchased separately by the State Granary. Finland has, during the present crop-year, joined the International Wheat Agreement. IV.» Statistical information Statistical information concerning products handled by the Alcohol Company are attached in Annexes 1 to 4 and concerning grains in Annex 5» V. Reason why no foreign trade has taken place (if this is the case) in the products affected Does not apply. VI. Additional information None.

4 L/1949/Ada.8 Page 4 ANNEX 1 National Production I Yeast kilos 5,696,569 5,736,135 5,591,149 Vinegar litres 1,032,900 1,282, ,900 Ethyl alcohol kilos 100# 19,208,596 17,727,978 18,217,965

5 ' o ANNEX 2 Import of Alcoholic Beverages i960 I96I 1962 litres nmk litres nmk litres nmk f.o.b..... f.o.b. f.o.b. Vodka, gin, genever, etc. 445,748 1,233, ,146 1,807, ,035 1,634,135 Cognac and brandy 972,724 3,632,098 1,186,898 4,836,808 1,803,779 7,784,741 Whisky 344,183 1,505, ,126 1,997, ,471 2,500,781 Liqueurs 113, , , , , ,382 Rum and arrak 243, , , , , ,309 Wines 3,766,235 4,523,077 4,011,029 5,079,257 4,283,778 6,411,393 Beer 15,172 18,628 16,405 12,299 25,596 21,852 5,901,216 11,655,446 6,760,744 14,821,263 7,833,255 19,957,593 (0 VO 4=- > 9-

6 Export of Alcohol,Fusel Oil and AlcoholAmyl Page kg/100% nmk kg/100% nmk Ethyl alcohol 12,315,915 2,935,912 6,468,263 1,813,344 8,918,227 kg/100% 2,529,358 Fusel oil and Amyl alcohol ,130 kilos 49,968 ANNEX 4 Export of Alcoholic Beverages litres nmk litres nmk litres nmk Vodkas 4,390 13,584 2,829 4,106 15,181 26,379 Liqueur etc. 5,515 19,459 9,310 49,891 1,364 13,753 Wines Beer 75,000 73, Total 84, ,413 12,437 54,278 16,545 40,132

7 Page 7 ANNEX 5 Importation Wheat Rye Oat» Barley I (Millions of kgs.) Export I Harvest Year (1/9-31/8) Domestic Output Total of which purchases of the State Granary (Millions of kgs.) Wheat Rye I96O-6I Oats Barley

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