Back to the complete issue
Monday, 26 April 2021

Smoke ‘em if you’ve got ‘em

New rules for the license to establish Egypt’s second major tobacco company are now officially being drawn up by the government, a month after several tobacco players filed a formal complaint asking the state to rewrite the conditions booklet, the local press reports, citing anonymous government sources. Advisors are working with the cabinet to draft a new document after the issue was brought to the prime minister, the sources said. The new booklet will address concerns raised by tobacco companies that the license would have given way to a new monopolist in the e-cigarettes and heated tobacco segments.

Why do investors care so much about a cigarette company? It’s simple: Eastern Company, the current monopoly, is one of the richest dividend plays in our neck of the woods.

Background: The Industrial Development Authority (IDA) issued last month a tender for a license that would have curtailed Eastern Company’s monopoly over the country’s tobacco industry. Several major players were invited to compete, but some — British American Tobacco Egypt and Al Mansour International Distribution Company — objected to the conditions and pleaded with the Egyptian Competition Authority (ECA) that the rules would effectively create a monopoly on alternative tobacco products.

Enterprise is a daily publication of Enterprise Ventures LLC, an Egyptian limited liability company (commercial register 83594), and a subsidiary of Inktank Communications. Summaries are intended for guidance only and are provided on an as-is basis; kindly refer to the source article in its original language prior to undertaking any action. Neither Enterprise Ventures nor its staff assume any responsibility or liability for the accuracy of the information contained in this publication, whether in the form of summaries or analysis. © 2022 Enterprise Ventures LLC.

Enterprise is available without charge thanks to the generous support of EFG Hermes (tax ID: 200-178-385), the leading financial services corporation in frontier emerging markets; SODIC (tax ID: 212-168-002), a leading Egyptian real estate developer; SomaBay (tax ID: 204-903-300), our Red Sea holiday partner; Infinity (tax ID: 474-939-359), the ultimate way to power cities, industries, and homes directly from nature right here in Egypt; CIRA (tax ID: 200-069-608), the leading providers of K-12 and higher level education in Egypt; Orascom Construction (tax ID: 229-988-806), the leading construction and engineering company building infrastructure in Egypt and abroad; Palm Hills Developments (tax ID: 432-737-014), a leading developer of commercial and residential properties; Etisalat Misr (tax ID: 235-071-579), the leading telecoms provider in Egypt; and Industrial Development Group (IDG) (tax ID:266-965-253), the leading builder of industrial parks in Egypt.