Entrepreneurial activity under market regulations : A qualitative study about entrepreneurship in the Swedish brewery industry

Abstract: Sweden has a long tradition of strict alcohol policies and market regulations have been used in order to keep down the consumption among the population. The state has controlled the market through monopolies and high alcohol taxes. When Sweden entered the European Union four of the five monopolies were abandoned. At the same time entrepreneurial micro-breweries started to enter the market. The market is regulated by a retail monopoly (Systembolaget) and regulation considering marketing and production of alcohol products. The aim of the study was to investigate how the regulations have affected the entrepreneurs in the industry and which strategies they are using in order to compete with the big breweries which are dominating the market. Further, because it is an industry still under development, the issue of legitimacy for new industries is also included in the study. In order to develop the understanding of how the entrepreneurial process might look like and which strategies that are available at an early stage in the process a theoretical framework was constructed. This includes theories about opportunity discovery and creation, market driven or market driving entrepreneurship, branding, and industry legitimacy. The study has been done through a qualitative method based on interviews with three entrepreneurs who are founders of micro-breweries. The results of this study shows that the market regulations act both as a support and as a hinder for the entrepreneurial activity in the industry. Due to Systembolaget's formal procedures for selecting products to their assortment, the small companies are able to compete at same condition as the bigger players in the process. However, there are regulations which hinder an effective marketing of the companies, especially when potential customers are visiting the breweries and do not have the possibility to buy the product on site. The lack of understanding among politicians for the values which guide the micro-breweries work is one reason to why the industry still struggles to gain legitimacy. A micro-brewers association has recently been founded in order to organize the entrepreneurs in a better way. This might lead to increased knowledge about their work in the future.