Egypt: Measures to End Tobacco Monopoly

Tobacco producers and authorities in Egypt are implementing measures to end the distributors’ market monopoly, according to Ahram Online.  

The price of locally produced cigarettes has almost doubled over the last three months. The Eastern Company, which holds a 75 percent share of the market, responded by increasing supply.

“The Eastern Company has increased supply in the market from 20 percent to 30 percent,” said Hani Aman, CEO of the Eastern Company.

The prime minister also held a meeting involving the minister of finance to review available stock and plans being implemented by the Eastern Company to increase production and help stabilize the market.

The meeting was used to look at measures being taken to provide necessary raw materials for manufacturing, according to Cabinet spokesperson Nader Saad.

The current crisis was partly caused by a hard currency shortage, affecting the import of necessary raw materials.

Aman stated that it will take efforts of four parties to end the crisis. The first is Eastern Company; regulatory bodies are the second—these are already intensifying efforts to combat monopolization and traders’ exploitation of the market crisis.

“The third party is the merchants whom I call upon to cease stockpiling cigarettes, particularly given the ineffectiveness of such practices in light of the measures taken by regulatory entities,” Aman said. “The fourth participant is the consumer. I appeal to consumers to refrain from purchasing quantities beyond their actual needs and to avoid hoarding.”

“Authorities have confiscated over 200,000 packs of cigarettes in various locations, including Basateen, Matariya, Bab Al-Bahr, Tanta, Alexandria and Sayeda Zeinab,” said Ibrahim Imbabi, head of the Tobacco Division at the Federation of Egyptian Industries, who believes the current measures are not enough.

“I have proposed channeling the confiscated quantities to national gas stations [many of which sell different tobacco brands], thereby ensuring that prices remain stable. This approach would also involve a restructuring of the distribution network, with the Eastern Company directly supplying retailers instead of relying on distributors.”