Thanks to its southerly and maritime position, the locality is the mildest in Sweden, with winter lows barely averaging frosts.

It marks the border between the Baltic Sea and the Øresund, the sound that separates the Danish island Zealand from the southern Swedish province of Scania.

Like the rest of Scania, it has an oceanic climate (Cfb), but with greater maritime effects than in Malmö for example, due to its unsheltered position on the peninsula.

The great maritime effects as well as the ice-free winters of the region contributes to both yearly heat and cold records being subdued by Swedish standards, however specific climate events have shrunk the temperature to −24 °C (−11 °F) and raised it to 30 °C (86 °F).

Due to the very marine nature, Falsterbo is the mildest weather station in Sweden, in spite of summer highs being far below surrounding areas.

Even being part of the Nordic mainland, Falsterbo also has a similar annual temperature to Carlisle in hypermaritime coastal England in spite of being slightly further north.

The market was held on the beach stretch between Skanör and Falsterbo and was dominated by the north German Hanseatic cities, primarily Lübeck.

The Danish king delegated specific areas along the beach to these cities, so called "fit" or "fed", where they had the right to carry out trade during the Scania Market.

In 1311 the castle was destroyed by the Hanseatic League (specifically the trade towns of Rostock, Wismar and Greifswald) in the war between these and the Danish king Erik Menved.

After the herring population declined during the 16th century the Scania Market was dismantled and subsequently the two cities lost their former importance, but retained the town privileges, with joint administration.

Others claim that the factory was built under German influence only to serve as a disguise for a giant artillery foundation and that the bricks in the walls were placed upright to save costs.