Treasury makes cash with the auction of Tobacconists on the border with France


Treasury ‘makes cash’ these days with tobacco. Especially with the sale of cigarettes along the French border. The department of María Jesús Montero is receiving payment for the bids for the 203 new tobacconists that it has put out to tender, after 25 years without doing so, throughout the Spanish territory. But he highlights the “madness” for taking over a tobacco sales point next to the neighboring country. 30 licenses were auctioned in border towns such as La Junquera (Girona), Les (Lleida), Urdax, Bera de Bidasoa and Luzaide-Valcarlos (Navarra) or Irún (Gipuzkoa) and the total bids have reached almost 60 million euros, specifically, 58.18 million euro.

The largest of all of them, seven million euros, in one of the ten tobacconists auctioned in La Junquera. In this town the lowest bid does not fall below 2.5 million euros. In Luzaide-Valcarlos (Navarra) they have bid up to 2.06 million euros for the granting of a tobacco and stamp retail license. It is the ‘law of the border’. As in Les, in the province of Lleida, the last municipality in the Aran Valley before crossing the French border. There are four new licenses for the sale of tobacco in a municipality of just over 900 inhabitants that range, according to this bid, between 500,000 and 280,000 euros. It must be taken into account that the minimum amount of output established by the Ministry of Finance and Public Function in this auction is 50,000 euros and that of the 203 new licenses put out to tender throughout Spain, 20 have been left without any bidder.

The winners of the bids, for the moment the list is provisional, now have a month to make the payment effective and the Ministry of Finance and the Commissioner for the Tobacco Market will publish, these days, the final award in the BOE. Once the new license has been awarded, the new concessionaire will have six months to request authorization to open the premises, which must be at a minimum distance of 150 meters from, for example, educational centers. The network of tobacconists is made up of more than 12,000 establishments distributed throughout Spain for the sale of tobacco products, stamps and franking signs on an exclusive basis.

For all this business around tobacco along the French border, it must be taken into account that, according to the data of the Commissioner for the Tobacco Market, sales in these territories are growing exponentially, 16% in 2021, while they are decreasing in the rest of Spain and for this reason the sale of tobacco to French citizens each time represents a higher percentage of the State income for this concept. According to a KPMG study, more than 5% of the cigarettes consumed across France in 2021 were purchased in Spain. We are talking about 132 million packs, at a rate of about five euros on average, of which a significant part are taxes. A business of millionaire and growing magnitude, therefore, we must not lose sight of the fact that a packet of tobacco costs a French citizen twice as much in his country, 10 euros, as in Spain. Hence, more and more citizens of the hexagon cross the border to buy tobacco and also alcohol.

Luzaide-Valcarlos (Navarra), with just 350 inhabitants, is the entrance to Spain on the Camino de Santiago. There, according to data made public by the Ministry of Finance and Public Function, up to 2,065,000 have been bid for the license of a new tobacconist. The result of this ‘greed’ collection of the Treasury is that next to the border the ratio of tobacconists per inhabitant is much higher, infinitely, than in the rest of the national territory. Thus, if in Spain, in general, there is a tobacconist for every 2,500-3,000 inhabitants, together with France, after this new auction, there is a store for every 188 inhabitants, as happens in La Junquera where there will be 17 tobacconists for a population of 3,200 inhabitants.

Spain is the tobacconist of France and the Government derives enormous benefits from it. The department headed by María Jesús Montero already said it when she carried out the auction that the distribution of the 203 new licenses in Spanish territory was done for “population” and “commercial” reasons.

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