Egypt's govt increases cigarettes retail prices

Ahram Online, Sunday 2 Feb 2014

Price of Cleopatras up to almost LE7, with Marlboro, Merit and Kent up to nearly LE17, after increase from finance ministry

(Photo: Ahram Online)

A pack of cigarettes in Egypt is going to cost about LE1 more per pack, after the country's finance ministry on Sunday raised the price of both imported and local brands.

Local brands are set to rise between LE0.5 and 0.75. That means a pack of Cleopatras, the cheapest and best-selling Egyptian cigarette, will cost between LE6.25 and LE7.00, compared to LE5.75 and LE6.50

The increase on imported cigarettes, between LE1 and LE1.5, takes brands like Marlboro, Merit and Kent up from LE15.5 to LE17.

The lower-price imported brands L&M and Rothmans will be sold at LE12 per pack, compared to LE11.

Mohamed Osman, head of marketing at Eastern Company, the state’s top cigarette manufacturer, told Ahram Online that the new price hikes will push retailers to surge their prices since the profit margin after a tax reduction doesn't leave much left to be distributed amongst the company and traders.

He explained that the government takes more than half of the cigarette pack price – 50 percent of the retail price, plus a fixed sales tax of LE1.25 and a LE0.10 health care tax.

Accordingly, a LE17 pack of Marlboros yields the government about LE10.

He added that this was the first official price increase since February 2012.

Sunday's statement from the finance ministry announcing the price hike warned that any retailer or distributor to violate the stipulated price list would face legal penalties.

Three companies are currently licensed to make and sell cigarettes in Egypt, led by the state-owned Eastern Company. Two foreign companies also operate in the local market: BAT-Egypt and Phillip Morris International, both of which use Eastern Company factories to manufacture their products.


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