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Tuesday's papers: Telegram trouble, energy cluster and Stockmann complaints

Tuesday's papers include news of a Russian tech firm's possible switch to Finland, the debate over whether to support biodiesel or electric-run cars as the preferred vehicle of the future, and the controversial sale of prestigious department store Stockmann's grocery department.

Helsingin Stockmann.
Stockmann's sell-off has sparked an angst-ridden reaction in Finland's bigger cities. Image: Jyrki Lyytikkä / Yle

Russian messaging service Telegram prides itself on privacy. It says users' communications are encrypted from end to end, just like WhatsApp and Signal, and that people can trust it to guard their data.

Experts disagree, as they have not used industry-standard encryption protocols, but the service remains immensely popular in Russia, particularly among opposition groups. The service claims to have more than a hundred million monthly users.

That has predictably brought unwelcome attention from the authorities in Telegram's home country, and last week Helsingin Sanomat reported, citing Russian media, that the service had planned to move workers from Saint Petersburg to Finland to pre-empt attempts by Russian law enforcement to gain access to users' info.

Hesari tried to find the firm's Finnish base with the search focused on Savitaipale, close to the Russian border. Telegram founder Pavel Durov has spent time there, and given it as his location when speaking at international events, but HS could find no company registered in his or Telegram's name in the Finnish company register. The firm itself declined to comment.

Durov has told media that he changes location often, along with a core group of Telegram engineers, working from cities worldwide. This is, the FT notes, a good marketing ploy when security is a key part of your brand.

Today Ilta-Sanomat takes a sceptical view of Telegram's supposed Finnish move, interviewing a cyber security expert who reckons it could also be more about image than security. Aapo Cederberg says there is also risk for Finland here, as Telegram has been linked by official media in Russia to terror and if it were to transfer over the border, governmental pressure would likely be applied to Finland.

Electric dreams

Finland's transport policies are in the balance at the moment, with a parliamentary working group due in August to announce its recommendations on reducing carbon emissions in the transport sector.

Helsingin Sanomat publishes analysis on Tuesday that outlines how Finland's current policy departs from international norms in this regard, with an emphasis on biofuels: fuels produced from organic matter rather than crude oil.

Biofuels are already in use, but if production is to be ramped up, investment is required in research and development and production capacity. The problem, HS notes, is that most other countries use limited public funds to support the switch to electric cars, rather than new fuels for combustion engines.

In the short term, over the next twenty years, next-generation biofuels could play a role in reducing emissions. After that, experts reckon that emissions targets require a total switch to electric motors--and other countries may be stealing a march on Finland in that sector.

Norway is one example, with extensive tax breaks helping some 100,000 electric cars onto Norwegian roads. The equivalent figure in Finland is about a thousand, suggesting the country is something of a laggard in the hot new vehicular technology. The country does have a lot of forest industry companies looking to develop fuels based on forest products, notes HS, and that may prove decisive in the allocation of resources.

High hopes for Vaasa

Somewhat serendipitously, HS also has a profile of a first-term member of parliament from Vaasa, Joakim Strand who is well plugged in to his region's business community. The Vaasa 'energy cluster' is the region's big hope, and Strand reckons it has the potential to lead the world on climate change-fighting technologies.

Vaasa is currently conducting a high profile campaign to secure a Tesla Gigafactory in the region that would produce batteries for home usage. This week the Swedish firm Northvolt is also planning a new factory and Vaasa is a candidate, according to Strand.

The Swedish People's Party MP is an unashamed booster for his home region, but his vision of Vaasa's future is a little broader than the pork-barrel spending many legislators content themselves with.

The top line in the HS story is the idea of a bridge spanning the 70km between Vaasa and Umeå in Sweden, uniting Westro- and Ostrobothnia in one economic area and boosting Vaasa's exporting industries in the process by providing a link to ports on Norway's Atlantic and Arctic coasts.

"Industrial production on both sides of the sea is worth about 20 billion euros per year," suggests the enthusiastic Strand. "What would a bridge cost? Three million?"

Stockmann angst

Last week the Stockmann retail firm announced plans to sell its grocery arm, Herkku, to the S Group supermarket chain. The Herkku outlets are typically located in the basement of branches of Finland's premium department store, and have a cachet that is out of all proportion to their roughly one percent share of the Finnish food retailing market.

The decision brought a flood of angst on social media, as Finland's metropolitan elite (Herkku stores are only located in the bigger cities) complained about the deal to bring in an operator that has made cheap food its raison d'être in recent years. HS collects the best of the social media reaction and asks the firm's CEO for his thoughts on the response.

"It's valuable information," according to Lauri Veijalainen, as it will help S Group understand what kind of stores they should be running. Veijalainen claimed that feedback on Friday, when the deal was announced, was at normal levels, and nobody returned their loyalty cards in a fit of pique at the vulgarity of an S Group connection.

Kauppalehti and Ilta-Sanomat carry more serious editorials on the implications of the move. IS notes that the sale was perhaps inevitable, as Herkku was losing money and Stockmann has moved towards becoming more of a property company, renting out space to other retailers and caterers, than a traditional department store.

KL takes a look at the competitive situation in Finland, noting that the deal will have to be referred to the competition authorities as it brings S group's market share close to 50 percent. Even so, Herkku was a loss-making business and might have shut down without a buyer, and the competition authorities might well wave it through.

The business daily obviously sees this market situation as problematic, with the K and S groups controlling some 80 percent of the market. That makes life difficult for suppliers and sub-contractors, but there's little appetite among international firms to expand to the isolated, small market in Finland – so there's little prospect of extra choice on the way.

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