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Historical Materials on the Restructuring of Tobacco and Alcohol Monopoly

The monopoly system of tobacco and alcohol was once a very important policy for our national finance. But with the rapid economic development and the development of a sound tax system in the 1990s, the proportion of tax revenue from tobacco and alcohol monopoly in the country had dropped from over 20% in the early years to about 5%.

In 1986, after the government signed the Sino-US Tobacco and Alcohol Agreement to allow the import of foreign tobacco and alcohol, the domestic market has been changed into a free market, reflecting that the system of state monopoly contradicting the WTO’s advocating the principle of national treatment and transparency. This was repeatedly an issue of concern addressed by foreign parties in international consultations. 

In accordance with Article 60 (1) of the Tobacco and Alcohol Administration Act, which was enacted and completed in 2000, the Taiwan Tobacco and Wine Monopoly Bureau would be transformed into a corporation within five years after the abolition of the exclusive sales of alcohol and tobacco and the implementation of a new system for its commodities.

Since the new system was implemented in Taiwan on New Year's Day of 2002, the Bureau faced strong competitive pressure. Consequently, on September 3 of the same year, the Executive Yuan approved the “Corporatization Plan for the Taiwan Tobacco and Wine Monopoly Bureau,” which clearly stated that the transformation was to be completed in six months. To protect the employees’ rights and benefits, the establishment of the Taiwan Tobacco & Liquor Corporation was proposed through legislative regulations, modeled after the Chunghwa Telecom Co., Ltd.

On July 1, 2002, the regulations on Taiwan Tobacco & Liquor Corporation came into effect, stipulating that the company must be established at the place where the central government is located and conduct both domestic and international businesses of tobacco and alcohol, including investing or operating related to other businesses approved by the Ministry of Finance. The directors of public shares are now represented by natural persons appointed by the Ministry of Finance.

The regulations also state that the property and production equipment used by the former monopoly bureau shall be transferred to the corporation, while the land and facilities were to become state-owned properties under the National Property Administration, Ministry of Finance.

After the transformation, conducting the business of tobacco and alcohol became more flexible. Currently, the headquarters even houses a sales department, a liquor department, a beer department, a tobacco division, and a department of biotechnology. In addition to the best-selling products of tobacco and alcohol, the beer yeast facial mask and the monascus capsule were the hottest sales. Through the introduction of new packaging, the establishment of a beer culture park, a basketball team, and event promotional vehicles, the company has reinvented Taiwan Beer to become young people’s favorite choice. 

The Taiwan Beer basketball team always referred to the word “attitude” in reflection of its determination to reignite passion and morale to win so many games, even when some of the teamplayers were injured. After being restructured into a company, it inherited the former “attitude” of “professionalism” and “innovation” to allow this NT$100-billion net worth, centennial corporation to continue as a pioneer of the industry and withstand challenges of the market.