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The History of Tobacco and Alcohol Retailers

The Ministry of Finance now has in its collection, the very first license tag for Liquor and Tobacco Retailer. To operate as a retailer of tobacco and alcohol in the time of state monopoly, the merchant had to apply to the Monopoly Bureau for a permit. Since the implementation of the Tobacco and Alcohol Administration Act in 2002, it is no longer the case to have a license to run a tobacco and/or liquor store. Accordingly, the retailer permit tag for sales of tobacco and alcohol that once appeared in streets and alleys will now only live on as a memory for many people. 

During the Japanese-occupied period, the government divided the monopoly business of tobacco and alcohol into three categories, namely, wholesaler, distributor, and retailer. The wholesaling of tobacco and alcohol was strictly under control of some retired Japanese military personnel, retired cadres of the Monopoly Bureau, or in some cases, influential local gentries, because the income was quite lucrative. Distributors and retailers had to be approved by local governments. 

In 1914 (Taisho era, 3rd year), the market was disrupted by price competition, so it was changed to a two-tier system, including wholesalers and retailers, which remained as such until the restoration of Taiwan. The commission rate for cigarette retailers was 7% and for alcohol 5%.
After Taiwan's restoration, the government combined the types of retailers of tobacco and alcohol into one. In 1946, there were 7,050 tobacco and alcohol retailers. Their number grew to 69,726 by 1997. The application for retailer license was not difficult. The Taiwan Tobacco and Wine Monopoly Bureau continued to formulate more regulations, such as “Regulations Governing Tobacco and Alcoholic Beverage Retailers,” “Regulations on the Establishment of Tobacco and Alcoholic Beverage Retailers,” and “Regulations on the Management of Tobacco and Alcoholic Beverage Retailers in Taiwan Province,” all meant to better manage the application of retailers.

According to the “Regulations on the Management of Tobacco and Alcoholic Beverage Retailers in Taiwan,” revised in October 1988, there were three types of retailers: alcohol and tobacco, draft beer, and cigarette. The regulations also stipulated that “a commercial enterprise with a business registration certificate or tax registration certificate, an organization in business of material supply or sales by law, or a welfare store or consumers cooperative established by law, may apply to be a retailer.” However, the licensed vendor owner could apply only for a retailer of cigarette or draft beer.

The competent authority would then issue a retailer license and a retail tag, which had to be posted along with the price list for clear display at the place of business. Also, retailers had to sell products in accordance with the published prices, and could not set their own prices, and certainly could not change the product packaging or sell products that were not labeled with a proprietary certificate for sale.

The commission rate for retailers before December 1951 was 15% of the retail price. Due to the exemption of tobacco and alcohol from sales tax, it was adjusted to 8%, starting in January 1966. 

To reach the goal of deregulation after the implementation of the Tobacco and Alcohol Administration Act, the wholesale and retail of tobacco and alcohol was classified as a general (commercial) company, without the need of a license. However, merchants in sales of ethanol alcohol had to register with the municipality or county/city government their locations of business. 

In the hot summer, convenience stores and hypermarkets on the streets and alleys now promote beer by offering various policies so that consumers can shop for the best deal. The liberalization of retail sales of alcohol and tobacco has made the business more lively and colorful than the old days of state monopoly because it satisfies the different needs of consumers.