Treasury programs bids to the highest bidder to get a slice of the first call for tobacconist licenses in 20 years

Starting next October, the Government will auction to the highest bidder the first 203 tobacconist licenses that have been called for almost two decades, specifically since 2003. The Undersecretary of the Ministry of Finance, on which the powers in matters of regulation of the tobacco market, has just published the bases of a call for which almost a decade has had to wait since the Executive of Mariano Rajoy laid the legal bases of the new system of granting licenses by the auction mechanism, instead of by contest. Treasury has wanted to make the conditions of the call very clear. The licenses will be granted to the bidder who makes the highest economic offer –logically, among those that meet the established conditions, among which will be not owning any other outlet– and if it were the case that the same bidder bids for several establishments and turns out to be the best offer in all of them, the tobacconist for which he would have made the highest offer will be awarded and he will take turns in the rest. The intention of the Ministry is to speed up the adjudication process as much as possible, and to collect its share as soon as possible. In September the auction portal will open and the amount from which the bids will be opened for each establishment will be defined, and in October it is expected that the bids will begin to award the 203 outlets distributed throughout Spain that it intends to allocate . Once the provisional awardees of the licenses have been published, the Treasury will open a maximum period of one month for them to pay the price offered to the Commissioner for the Tobacco Market, who will be the body to manage the process. Desktop code Image for mobile, amp and app Mobile code AMP code 2320 APP code The concessions will be made for 25 years. The 'timing' defined by the Ministry, which gives the successful bidders six months to apply for the opening license once the license has been assigned, suggests that the new establishments could already be operational next year by when the license is expected to be in force. increase in fees to the outlets that is included in the preliminary draft of the tobacco market law. An injection of income A part of the sector appreciates in fact a collection interest in the call made by the Treasury. They argue that the logical thing would have been to wait for the entry into force of the new legal framework that the future Tobacco Market Law should provide, which among other things provides for the prohibition of selling tobacco or other assimilable devices, such as electronic cigarettes, outside the tobacconists in a period of five years from its entry into force, before awarding the new establishments. But that 'timing' would have left the public coffers without the income derived from the auction at least until well into 2023. The first call for new openings of tobacconists in 20 years occurs at the gates of a new tax increase in the sector. On the one hand, the preliminary draft of the Tobacco Market Law provides for an increase in the canon charged to tobacconists for operating a service classified as being of public interest, with which the Executive hopes to increase revenues through this channel by 8%. On the other hand, a new increase in the Special Tax on Tobacco is in sight for next year after the Ministry of Health collected in a document the proposal to raise taxes on tobacco and similar products again before 2023 within its Comprehensive strategy to combat smoking. According to official data from the Tobacco Market Commissioner, tax revenue from tobacco production has not yet recovered to pre-pandemic levels and in 2021 provided public coffers with 500 million euros less than that collected in 2019. Good welcome to the new licenses The Union of Tobacconist Associations of Spain has welcomed the long-awaited call from the Government and which, according to the association, will allow restoring "the capillarity of the outlets throughout the Spanish geography and, therefore, of the citizen services they provide. In statements to ABC, the president of the Union, Elena Viana, stressed that "the selection of areas for the opening of new outlets has taken into account a criterion that is essential for us: profitability", guaranteed because they are areas highly populated or growing, and also that ownership has been reserved for natural persons, since "in this way, the essence of the tobacconist is maintained as a family business".

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