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Thursday, 13 July 2017

Eastern Company raises low-cost Cleopatra cigarettes prices by 4.2%-17.6%

The Eastern Tobacco Company hiked prices for three of its Cleopatra products by 4.2-17.6% due to increasing production costs, Chairman Mohamed Othman Haroun tells Reuters. The company justified the increases with the 100 bps rise in the value-added tax (VAT) that came into effect with the start of the new fiscal year, in a filing to the bourse picked up by AMAY. The Finance Ministry’s VAT commissioner was quick to quash these claims, explaining that VAT for cigarettes is calculated under a separate system. Vice Minister of Finance Amr El Monayer had previously said that the prices of cigarettes would not rise after the VAT rises. Ahram Gate, however, is reporting that the Finance Ministry did tell the company it wants revenues from the company to increase 50%. The Tax Authority said in a statement, however, that the decision to raise prices came from the company and not under the direction of any state authority. Japan Tobacco International and British American Tobacco will not be hiking prices, company representatives tell Al Borsa.

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