Egypt to end decades-old tobacco monopoly

CAIRO – Egyptian authorities have presented an amended invitation for tobacco companies to bid for a licence to manufacture cigarettes, a document showed, after four firms complained the terms were too narrow.

The license could end a decades-old monopoly by the state-controlled Eastern Company which has a 70% market share.

The cigarette industry contributes more than 60 billion Egyptian pounds ($3.8 billion) to government coffers yearly, according to tobacco firms.

Under the new terms, sent to tobacco companies on June 1, the winning bidder should agree to produce one billion cigarettes per year. Egyptians smoke some 19 billion cigarettes a year.

Authorities also scrapped a rule saying they would not be offering any other licenses after the tender for a decade, the updated document from Egypt’s Industrial Development Authority showed.

The deadline to submit offers in the amended tender is August 1.

In March, the Industrial Development Authority invited companies to bid for a licence.

Four firms – Nakhla Tobacco Co, Imperial Tobacco, British American Tobacco and Al-Mansour International Distribution Co, complained that the winner would have an unfair advantage over its competitors.

Shortly afterwards, the tender was postponed.