Egypt plans to increase cigarettes prices by EGP0.25 per pack in July 2021, reports The Daily News.
The proceeds of the increase will contribute to funding for the Universal Healthcare Insurance program. When the program was launched in July 2018, the government increased cigarette prices by EGP0.75 per pack to raise funding.
Under the program’s regulations, an additional EGP0.25 per pack will be added every three years until the total tax reaches EGP1.50/ per pack.
Domestic market leader Eastern Co. said it expects the rises to be enforced as per schedule.
The company is expected deliver a strong performance in fiscal year 2020-2021, on the back of higher production capacity and utilization rates. The company recently upgraded its production facilities, increasing the production capacity from 200 million cigarettes per day to 250 million cigarettes per day.
Eastern’s performance is further boosted by the reduction in the retailer’s margin on cigarettes through indirect price increases, from EGP0.10 per pack to EGP 0.025 per pack in December 2020.
The appreciation of the Egyptian pound will likely also enhance Eastern’s performance as it relies entirely on imports for raw tobacco, which make up more than 80 percent of raw materials.