Friday, January 1, 2016

¿Hay un estanco por aquí?

¿Hay un estanco por aquí? was one of the very first phrases I learned in Spanish. It comes from the 1970s BBC Spanish course "Dígame!" It translates as "Is there a tobacconist nearby?" So estanco means tobacconist. At least I always thought that it did but, apparently, I was wrong. An estanco is, in reality, a type of monopoly established to control the sale of any goods or service. The word estanco has become synonomous with the 13,500 shops that sell tobacco in Spain simply because tobacconists are one of the last, and most visible, of the state monopolies. The accurate name for the shops, identified by their brown and yellow signs, is Expendeduría de Tabacos y Timbres del Estado – or, loosely translated, an authorised tobacco and government forms outlet.

It was the Spanish who introduced tobacco into Europe. Right from the start its sale in Spain has been controlled by the state. Even today, before anyone can sell tobacco, they have to get a licence from a division of the Tax Ministry. In the early and middle part of the 20th Century, when tobacco was in vogue, new licences were issued regularly. Nowadays, with a shrinking market, there is no need for new shops. The last licences were issued in 2013 after a ten year gap. In the interim if you wanted to take over a tobacconists your only option was to buy an existing licence.

Estanco licences have traditionally been awarded in a concurso, a competition, often to reward people for service to the state. After the last Civil War, for instance, lots of licences went to Francoist side war widows. The licences, once indefinite, now last 25 years but they are usually renewed without any fuss provided there are no problems. The last round of licences were awarded by auction rather than concurso

There are several controls on the licences. Anyone applying for a licence must be an EU citizen and live in the area they want the licence for. Once the licence is granted the applicants must work in the shop themselves, though they can employ other workers as well. That's why there are no big chain tobacconists in Spain. Tobacconists can't be in shopping centres, they can'tt be close to schools and they can't be too close together.

All estancos sell tobacco, smoker's paraphernalia, printed government forms and stamps. As they apply potential licensees have to say what additional items they want to sell. Nearly all sell stationery, sweets, newspapers, magazines and phone top ups. Lottery tickets are also common. Some products, like foodstuffs, cannot be sold. The decision, on what can be sold in estancos, varies across the various autonomous communities but most allow more leeway in rural shops.

There is an application fee, an opening fee and an annual fee on each estanco plus a much larger levy on sales. The profit levels, set by the state, are 9% above wholesale for cigars and and 8.5% on other tobaccos products. For printed forms it's just 4%. This means that out of every euro paid for tobacco the government gets 80 cents, the wholesaler 12 cents and the retailer about 8 cents. In the last few years cigarette sales in Spain have nosedived. In 2009 some 90 million cigarettes were sold but by 2014 that was down to 48 million. Remarkably tax revenues have remained relatively stable over the same period though both Central Government and the retailers are concerned at the high levels of cheap tobacco being smuggled into Spain from neighbouring Gibraltar and Andorra.

As well as estancos there are about 100,000 tobacco vending machines in Spain which are mainly in bars and petrol stations. Cigars can be sold separately. These “Points of sale with a recharge” are also licensed and controlled by the commission that controls the estancos. The tobacco in the machines has to be supplied by one of the three nearest local tobacconists with the retail profit coming from a surcharge over the estanco price.

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