JT Complains About Eastern’s Dominance

Japan Tobacco International has complained to the Egyptian Competition Authority (ECA) about Eastern Co.’s dominance of the domestic cigarette market, reports Daily News Egypt.

The complaint allegedly involves JTI’s Gold Coast brand, which competes in Egypt’s low-priced cigarette segment. Recent tax amendments have made it costly for JTI to import the cigarette from Turkiye, where it used to be produced.

JTI has reportedly been trying to get Gold Coast produced by Eastern Co., which has a monopoly on domestic cigarette production, and included it in the contract between the two parties, which will expire in mid-2024. However, the two parties have not yet reached a final agreement, and JTI has stopped selling its Gold Coast brand until the negotiations with Eastern Co. are completed.

While the state-owned Eastern Co. continues to dominate the Egyptian tobacco market, its position has weakened in recent years.

In September 2022, United Tobacco Co. (UTC) started manufacturing cigarettes in Egypt, ending Eastern Co.’s decades-old monopoly. UTC is jointly owned by Eastern Co. and Philip Morris International.

The tax amendments also allowed the cigarette companies to increase the prices of their products after the crisis that hit the cigarette market in Egypt amid a shortage in supply.

Earlier this month, Global Investment Holding Co. of the United Arab Emirates completed its acquisition of a 30 percent stake in Eastern Co.