Tag: Egypt

Eastern Raises Prices

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Egypt Eastern Co. has raised prices of its tobacco products to absorb part of the increase in production cost following the devaluation of the Egyptian pound, said Hany Aman, the company’s chairman, according to Ahram Online.
The company is coordinating with oversight authorities to control the market and is canceling contracts with vendors that do not adhere to official prices, according to Aman. Eastern Co. has also increased production to increase supply of all tobacco types in order to ensure market stability and contain prices.
Local cigarette brand Cleopatra has increased in price from EGP24 ($0.77) to EGP27 for a 20-cigarette pack. Brands Boston, Belmont and Mondial have increased from EGP24 to EGP27 per pack, and Moreover, Viceroy and Pall Mall have increased from EGP35 to EGP42. Hookah tobacco prices have also increased to EGP50 for 250-gram packs and EGP85 for 500-gram packs of the Muʽassel Saloum brand.
Egypt’s Parliament approved an amendment to the VAT law on Oct. 30, imposing a tax of EGP0.50 on tobacco products sold in the local market.
November 10, 2023
Egypt Approves New Cigarette VAT

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Egypt will impose a new value-added tax of EGP0.50 ($0.02) on locally sold tobacco products, reports Ahram Online.
On Oct. 29, the House of Representatives approved an amendment to the 2016 VAT law to allow for the new duty, which will apply to both “hot” tobacco (cigarettes) and “liquid” tobacco (vapes), according to Fakhri El-Fiqi, head of the House’s Planning and Budget Committee.
Egypt’s tobacco market has been in turmoil in recent months, with consumers facing cigarette shortages and price hikes, among other challenges.
“The new amendment will also encourage tobacco companies to increase production in a way that shall stem the rise in cigarette prices and satisfy consumers,” said El-Fiqi, who predicted the next tax would generate up to EGP8 billion in revenues for the state budget.
Some lawmakers praised the measure as method to discourage smoking in line with World Health Organization recommendations.
“There is no question that the hike in cigarette prices will push more citizens, particularly young people, to give up smoking,” said Hesham El-Hosary, chairman of the House’s Agriculture and Irrigation Committee.
Despite the recently announced tax hike, cigarettes in Egypt are still cheap compared to other countries. In France, for example, some brands of cigarettes sells for the equivalent of EGP600 per pack, according to Ayman Abul-Ela, deputy chairman of the House’s Human Rights Committee.
October 30, 2023
Emirati Group Acquires a Third of Eastern Co.

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Global Investment Holding Co. of the United Arab Emirates has acquired a 30 percent state in Eastern Co. of Egypt for EGP19.3 billion ($625 million), reports Ahram Online.
After the sale, the state-owned shareholder, Chemical Industries Holding Co. (CIHC), will retain a 20.9 percent stake in Eastern.
The deal is part of Egypt’s program to sell stakes in 35 state-owned companies to strategic investors by the end of June 2024.
Egypt’s minister of public enterprises, Mahmoud Esmat, said the deal underscores the government’s commitment to the success of its program to expand ownership and encourage direct private investment across various sectors.
In the first nine months of fiscal year 2022-2023 (which concluded in March), Eastern Co. had a domestic market share of more than 70 percent and reported a net profit of EGP5.29 billion, up 24 percent over the comparable period in the previous year.
The privatization program is part of Egypt’s commitments under a $3 billion loan from the International Monetary Fund.
The government announced wants to attract $5 billion from the offering of power plants and state-owned companies from October 2023 until the end of June 2024.
In related news, Eastern recently boosted its production by 40 percent to help alleviate a cigarette shortage in Egypt, according to The Egypt Independent.
The short supply had caused prices of popular brands such as Cleopatra to surge to unprecedented levels.
Following Eastern’s decision to increase output and step up vigilance against illicit sales, cigarette prices fell by EGP20, bringing the price of a pack to EGP40.
Eastern Company CEO Hani Aman announced that the company is working with various state agencies to ensure the proper supplies are being provided to the public.

September 4, 2023
Foreign Investors Bid for Stake in Eastern Co.

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Foreign investors have submitted bids for a 30 percent stake in Egypt’s largest tobacco producer, Eastern Co., reports Ahram Online, citing an Aug. 22 statement from the Egyptian stock exchange.
According to news reports, Japan Tobacco International is one of the investors considering the deal.
Eastern’s majority shareholder, the state-owned Chemical Industries Holding Co. (CIHC), is reportedly studying the offers and conducting due diligence.
In addition to CIHC, which has a 50.95 percent stake, Eastern’s current shareholders include the tobacco company’s employees’ union and South Africa’s Allan Grey Equity Fund, which each own 5.2 percent of the company. The remaining 9 percent is traded on the Egyptian exchange.
In the first nine months of fiscal 2022–2023, Eastern reported a net profit of EGP5.29 billion ($171.22 million), up 24 percent over that recorded in the previous financial year.
The potential sale is part of Egypt’s plans to offer stakes in 32 state-owned companies to strategic investors under the country’s commitments to the International Monetary Fund, which has offered a $3 billion loan.
The nation is struggling with a $17 billion financial imbalance through 2026 and a local shortage of U.S. dollars.
To date, the state assets sale program has generated around $2 billion.
August 22, 2023
Egypt: Measures to End Tobacco Monopoly

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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.”
August 18, 2023
Eastern Boosts Production to Cigarette End Shortage
Egypt’s Eastern Co. will provide 50 million more cigarettes daily starting Aug. 13, 2023, to alleviate the prevailing cigarette crisis, reports Ahram Online.
The company will increase the number of cigarettes in the market to 150 million per day, up from 100 million cigarettes, Eastern Co.’s Managing Director and CEO Hany Aman was quoted as saying.
Tobacco prices have surged recently on the black market amid a shortage of supply in the market.
Aman said that by boosting supply in the market, the company aims to control unjustified price hikes and curb speculative practices by some traders, who began to stockpile cigarettes after they heard of a new cigarette taxation legislation.
The MD expected cigarette prices to return to normal within three to four weeks following the production increase.
Fakhry El-Fiqi MP, who heads the Planning and Budget Committee in the House of Representatives, recently said that the committee will discuss a new cigarette taxation law at the beginning of the fourth legislative session in October.
According to Eastern Co., Egyptians spent EGP17 billion ($550.15 million) cigarettes during the 2021-2022 fiscal year.
August 12, 2023
Egypt: PM Cigarette Prices Increase

Image: Tobacco Reporter archive
Prices of 10 types of Philip Morris cigarettes have been raised in Egypt, the Tobacco Division of the Chamber of Commerce announced. The increase went into effect April 6, according to the Egypt Independent.
The increase is attributed to the rise in U.S. dollar price against the Egyptian pound. Ibrahim Imbaby, head of the Tobacco Division at the Chamber of Food Industries with the Federation of Egyptian Industries, confirmed that Philip Morris raised prices as a result of the decline in hard currency management and the rise in production costs.
April 7, 2023
Egypt Cigarette Prices Increase

Image: Tobacco Reporter archive
The Eastern Tobacco Company raised prices of cigarettes, cigars and pipe tobacco in Egypt by an average of EGP2 ($0.06) to EGP3 per pack, according to Ahram Online.
This is the first price increase for the company in 2023 following increases in September 2022 and March 2022.
The company attributed the increase to the global high costs of raw materials and the depreciation of the Egyptian pound, reports Egypt Today.
Eastern Tobacco Company is Egypt’s largest producer of tobacco.
March 27, 2023
Eastern Co. Increases Prices of 10 Brands

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The Eastern Co. in Egypt has increased the prices of 10 popular cigarette brands, reports the Daily News Egypt.
The new prices took effect Sept. 4, after receiving approval from the company’s board of directors in accordance with the provisions of Egypt’s VAT and health insurance laws.
Eastern Co. Managing Director and CEO Hani Aman attributed the price hikes to a rise in the cost of raw materials. We were careful to make the increase as low as possible,” he was quoted as saying.
The price increases ranged from EGP1.5 ($0.08) to EGP2 and included popular brands like Cleopatra Box, Cleopatra Super and Mondial.
This is Eastern Co.’s second price increase in about six months. In March, the company increases the prices of 10 types of local cigarettes by rates ranging from 4.3 percent to 9.5 percent.
The Eastern Co. reported an after-tax net profit of EGP4.25 billion during the nine months ending in in March, up 9 percent over the comparable 2021 period.
Sales increased by 6 percent to reach EGP51.47 billion during the period from July 2021 to March 2022, compared to EGP48.74 billion in the same period of last year.
September 5, 2022
UTC to Manufacture PM Products for Egypt

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Philip Morris is set to start manufacturing its products for the Egyptian market at its United Tobacco Co. (UTC) subsidiary, reports Daily News Egypt.
The current licensee, Eastern Co., will continue to manufacture Philip Morris’ cigarette products until its production stock has been depleted.
Philip Morris stated that it is proud of the strategic partnership with the state tobacco company, which lasted for nearly half a century, and is looking forward to sustaining this partnership through Eastern’s shareholding in UTC. In May, Egypt’s General Assembly approved Eastern Co.’s plan to buy a 25 percent share in UTC for EGP100 million ($5.2 million), according to the Enterprise Press.
Eastern Co. Managing Director Hani Aman said at the time that his firm would be represented by two members on UTC’s board of directors.
The acquisition was part of the Philip Morris subsidiary’s agreement with Eastern Co. to locally manufacture cigarettes. UTC was the only company to bid in last year’s tender after other companies complained that the conditions of the tender would establish a monopoly over the local market.
Philip Morris confirmed its full commitment to all existing contractual relationships with traders and suppliers to guarantee the availability of its products across Egypt’s governorates. The company said it will continue to provide all of its products at the same prices as recently officially set with no change to the packaging.
Aman said that the Eastern Co. is trying to absorb the rise in production costs internally, resulting from the recent rise in the cost of raw materials.
He pointed out that the disruption of supply chains had a direct impact on the rise of some production inputs, in addition to the impact of the rise in the price of the U.S. dollar on other products.
Eastern Co.’s tobacco business reported revenues of EGP12.78 billion for the first nine months of fiscal year 2021-2022, up 5 percent over those of the comparable period in the previous year.
September 1, 2022