August 15, 2008

Svenska Spel criticised as marketing spend rises 16%

Critics have slammed Swedish monopoly Svenska Spel after it not only failed to live up to its pledge to decrease advertising in its homeland, but actually increased its marketing spend during the second quarter of the year. Company results showed that marketing costs increased 16% compared to the first quarter of the year.

Johan Pehrson, leader of Sweden's Liberal Party, said the increase would make Sweden's current monopoly arrangements difficult to justify to the European Union and that Svenska Spel could not call itself the protector of social ideals while actively targeting new customers.

"We have been giving a very clear signal to Svenska Spel to slow down on how much they act aggressively with advertising and marketing," said Pehrson. "Today though you can see with cold figures that they actually have been pushing up the amount of advertising they do. I think it is problematic."

Anders Wiklund, leisure analyst at Evli Bank, said he was not surprised by the negative reaction. He said: "I would say that it seems definitely a bit strange when the new message Svenska Spel gave in the spring was that it was going to focus on public safety, yet still the marketing figures are up quite a lot."

But Svenska Spel hit back at its critics and said its increases were small in comparison with its competitors. Head of communications Andreas Jansson commented: "We didn't say that we would decrease but that we would try to decrease. But that also depends on what our competitors choose to do.

"If we were to decrease our media spend now, it would mean that we give up market share to the non-regulated companies and we don't want to do that because our responsible gaming programme is a lot better than theirs, if they even have any."

Jansson claimed the majority of the additional advertising was focused on responsible gaming, though he conceded Euro 2008 had also played a part.

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