The Solidarity and Structural Fund at the Monopolverwaltung GmbH

The Solidarity and Structural Fund was financed through grants to be paid by tobacco wholesalers to the Fund for tobacco purchases made by tobacco store operators from 2008 to 2014. At the time of the audit, legal proceedings were pending with regard to the legality of the solidarity grants.

In the above-mentioned period, the Fund received a total amount of some EUR 74.09 million, of which the Fund spent some EUR 67.87 million (about 91.6%) by end-2015. The remaining fund capital will presumably suffice for three years. The tasks of the fund were described by legislature in the Tobacco Monopoly Act 1996 (Tabakmonopolgesetz) only in a general way. It was left to the advisory committee, in the framework of the fund regulation, to provide more detailed definitions and to render the measures to restructure the tobacco retail sector or the funding of preferential owners of tobacco stores more concrete. (The Tobacco Monopoly Act 1996 envisages preferential rights for i.a. “preferential disabled persons in accordance with Section 2 of the Disabled Persons Employment Act 1969 (Behinderteneinstellungsgesetz)” with regard to the appointment as a tobacco store operator; these persons are designated as preferential persons). The advisory committee, however, had neither defined concrete funding criteria nor a restructuring concept. Furthermore, it neither had bylaws nor any rules of procedure specifying the operational processes. Consequently, the funding requirements and the bases for decision lacked transparency and traceability, and the relevant stakeholders failed to ensure uniform procedures.

From 2011 to 2015, the fund awarded grants totalling some EUR 31.12 million, of which some EUR 23.49 million were paid to 3,805 tobacco store operators facing financial difficulties to compensate for lost revenue. The fund used further EUR 7.3 million to reduce the number of tobacco stores by some 12.5%, which is why the average tobacco turnover of tobacco stores increased by some 29%. However, irrespective of the grants, the number of tobacco stores has been continuously trending downward since 1995. The payments effected by the fund only accelerated this development.

Furthermore, the structural measures, which had been promoted via bonuses, undermined the socio-political objective to appoint as many preferential disabled persons as tobacco store operators as possible. The number of disabled owners of tobacco stores declined from 1,374 (in 2011) to 1,277 (in 2015) by 97 preferential persons, equalling some 7%.