Sweden's state-owned retail monopoly Systembolaget is launching an SEK8m (US$960,000) ad campaign to defend its hold on alcohol sales in the country.

Systembolaget, which owns and operates all liquor stores in Sweden, made the case for the monopoly in a letter to European Commission President Jose Manuel Barroso, and in a newspaper ad to be published today in the Financial Times.

The ad, headlined "Dear Mr. Barroso, Here's why you should consider cutting down on drinking", highlights drinking problems in Europe, and suggests the Swedish monopoly has helped keep down the country's alcohol consumption.

The campaign also includes ads in Swedish papers and a short film on the Internet promoting the monopoly.

"The message we want to aim at Barroso is that the alcohol issue is important," Systembolaget president Anitra Steen told Swedish radio. "The other thing is that we have a working model in Sweden that we want to keep."

Sweden has faced pressure to relax its stringent controls on alcohol sales since joining the European Union in 1995. EU officials say the monopoly is inconsistent with the free movement of goods in the single market, while Sweden argues it is needed to protect public health.

Sweden has been forced to ease some of its import restrictions on alcohol, but maintains high taxes on alcohol.

Systembolaget's sales have dropped, especially in the southern part of the country, due to the increased cross-border shopping to Denmark and Germany, where duty is lower.