In response to rising production costs intensified by global supply chain disruptions, Egypt's leading cigarette manufacturers have implemented significant price increases. Philip Morris (NYSE:PM) Egypt and Eastern Tobacco, which dominate the Egyptian tobacco market, have adjusted their pricing structures to absorb heightened expenses.
On Tuesday, Philip Morris Egypt updated its prices for a range of products. The new pricing includes:
- Marlboro at LE 69
- Marlboro Crafted at LE 59
- Merit at LE 74
- L&M at LE 50
- HEETS Selections, HEETS Dimensions, and TEREA, all heated tobacco rolls, at LE 56
Retailers and distributors across Egypt have been instructed to comply with these revised prices.
Eastern Tobacco also revealed new prices for its products:
- Cleopatra Box (10 cigarettes) at LE 20
- Cleopatra King Size, Cleopatra Soft Queen, Cleopatra Box (20 cigarettes), Boston/Belmont, Cleopatra Super, all Mondial variants including switch options (menthol/blueberry), and Cleopatra Black Label at LE 27 each.
The price adjustments come as the industry faces increased costs due to import restrictions and a strained global economy. Since Russia's invasion of Ukraine in February 2022, Egypt has seen a significant outflow of foreign currency by hot money investors. This event has led to tighter import restrictions that have particularly affected industries like tobacco that rely heavily on imported raw materials.
These cost pressures have trickled down to consumers. Egypt's 18 million smokers are now facing doubled prices in the formal market due to shortages.
The price hikes are a direct consequence of amendments to the Value Added Tax Law last Thursday intended to counterbalance soaring production expenses.
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