{"id":558272,"date":"2021-08-03T07:31:42","date_gmt":"2021-08-03T07:31:42","guid":{"rendered":"https:\/\/enterpriseam.com\/egypt\/2021\/08\/03\/smoke-drama\/"},"modified":"2021-08-03T07:31:42","modified_gmt":"2021-08-03T07:31:42","slug":"smoke-drama","status":"publish","type":"post","link":"https:\/\/enterpriseam.com\/egypt\/2021\/08\/03\/smoke-drama\/","title":{"rendered":"Smoke drama"},"content":{"rendered":"

<\/a> Here\u2019s why tobacco companies are still unhappy with <\/strong>the recently-amended terms<\/a><\/strong> of the license to set up Egypt\u2019s second tobacco company: <\/strong>JTI-Nakhla Tobacco, British American Tobacco Egypt and Al Mansour International Distribution Company filed two separate letters \u2014 copies of which were obtained by Masrawy<\/a> \u2014 to the Madbouly cabinet, calling for the extension of a 1 August deadline for the tender and outlining other grievances. The companies claim the terms of the licence \u2014 which had already been amended after initial objections<\/a> \u2014 would create an e-cigarette monopoly and prevent sustainable growth for the tobacco industry.<\/p>\n

(Please, God, don\u2019t get us started on the notion that the tobacco industry\u2019s growth could or should be sustainable\u2026)<\/p>\n

Tobacco giant Philip Morris was <\/strong>the only company to take part in the bidding round<\/a><\/strong> for the new license<\/strong>, with the deadline to submit technical studies passing on 1 August, in the second iteration of a tender that was pulled earlier this year<\/a> after attracting criticism for allegedly unfair terms<\/a>.<\/p>\n

In letters dated 29 June and 29 July, the companies lay out their lingering reservations<\/strong>, which read as standard corporate \/ tobacco industry whining:<\/p>\n

#1-<\/strong> The single license now on offer should only cover traditional tobacco products:<\/strong> The three companies \u2014 who were among the companies invited to bid back in March<\/a> \u2014 argue that the inclusion of the right to distribute e-cigarettes and \u201cheated tobacco\u201d products in the license would create a monopoly and put other cigarette companies at a disadvantage. \u201cInstead of helping create favorable market conditions, the offering of just one license would result in adverse ripple effects on the local tobacco industry as well as the economy as a whole, while also setting up a new monopoly over e-cigarettes and heated tobacco,\u201d the companies wrote. They are calling for the exclusion of non-cigarette tobacco products from the license on offer.<\/p>\n

#2- The new terms do not clarify whether a new company can really go head-to-head with existing monopoly Eastern Co.: <\/strong>The IDA\u2019s original conditions<\/a>, had sought to protect Eastern\u2019s market share by preventing the new company from producing cigarettes at the same price point as the monopoly\u2019s mass-market Cleopatra brand, which accounts for 98% of Eastern\u2019s revenues.<\/p>\n

#3- A rain check, please. <\/strong>Tobacco players are also lobbying for a four-month extension on the deadline for bids to allow time for technical and feasibility studies \u2014 and also wait for possible changes to the tender\u2019s terms. They are asking for a deadline extension until 1 December.<\/p>\n

Refresher: <\/strong>The revised terms slash the number of cigarettes the new company will have to produce to 1 bn each year, down from 15 bn in the original tender, but still stipulate that state-owned Eastern Tobacco should own 24% of the new entity. The government also agreed to issue more licenses following the tender, scrapping a rule that would have prevented new licenses in the following decade.<\/p>\n","protected":false},"excerpt":{"rendered":"

Here\u2019s why tobacco companies are still unhappy with the recently-amended terms of the license to set up Egypt\u2019s second tobacco company: JTI-Nakhla Tobacco, British American Tobacco Egypt and Al Mansour International Distribution Company filed two separate letters \u2014 copies of which were obtained by Masrawy \u2014 to the Madbouly cabinet, calling for the extension of […]<\/p>\n","protected":false},"author":1,"featured_media":558273,"comment_status":"closed","ping_status":"open","sticky":false,"template":"single-feature.php","format":"standard","meta":{"_acf_changed":false,"newspack_ads_suppress_ads":false,"newspack_popups_has_disabled_popups":false,"newspack_sponsor_sponsorship_scope":"","newspack_sponsor_native_byline_display":"inherit","newspack_sponsor_native_category_display":"inherit","newspack_sponsor_underwriter_style":"inherit","newspack_sponsor_underwriter_placement":"inherit","ep_exclude_from_search":false,"_primary_brand":0,"newspack_featured_image_position":"","newspack_post_subtitle":"","newspack_article_summary_title":"Overview:","newspack_article_summary":"","newspack_hide_updated_date":false,"newspack_show_updated_date":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[7255],"tags":[2114,728,72,289,3048,3040,131,7401],"brand":[],"newspack_spnsrs_tax":[],"class_list":["post-558272","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-manufacturing","tag-british-american-tobacco-egypt","tag-eastern-tobacco","tag-enterpriseam","tag-industrial-development-authority","tag-jti-nakhla-tobacco","tag-mansour-group","tag-manufacturing","tag-tobacco","wpautop","entry"],"acf":{"mongo_id":"1888f67e-febb-4bac-8006-e9eb843303e8","is_powered_by":true,"story_type":"1","photo_url":"https:\/\/ent.news\/2021\/8\/72.jpg","photo_position":"above","related_issue":[558265],"teaser":"","voice_url":""},"yoast_head":"\nSmoke drama - 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The conditions booklet for the tender \u2014 which is set to end Eastern Tobacco\u2019s historical monopoly over the sector \u2014 has been redrafted\u2026","rel":"","context":"In "COMPETITION WATCH"","block_context":{"text":"COMPETITION WATCH","link":"https:\/\/enterpriseam.com\/egypt\/category\/competition-watch\/"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/ent.news\/2021\/6\/46.jpg?fit=%2C&ssl=1&resize=350%2C200","width":350,"height":200},"classes":[]},{"id":554088,"url":"https:\/\/enterpriseam.com\/egypt\/2021\/12\/20\/tobacco-tender-boycott-take-two\/","url_meta":{"origin":558272,"position":3},"title":"Tobacco tender boycott, take two?","author":"enterpriseam admin","date":"20 December 2021","format":false,"excerpt":"Three major tobacco companies have reportedly chosen not to bid for a license to manufacture cigarettes: International tobacco producers JTI-Nakhla Tobacco, British American Tobacco Egypt and Al Mansour International Distribution Company will not be taking part in the renewed tender from the Industrial Development Authority (IDA), Akhbar El Youm reports.\u2026","rel":"","context":"In "Manufacturing"","block_context":{"text":"Manufacturing","link":"https:\/\/enterpriseam.com\/egypt\/category\/industries\/manufacturing\/"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/ent.news\/2021\/12\/399.jpg?fit=%2C&ssl=1&resize=350%2C200","width":350,"height":200},"classes":[]},{"id":561074,"url":"https:\/\/enterpriseam.com\/egypt\/2021\/03\/24\/are-things-getting-ugly-in-the-tobacco-industry\/","url_meta":{"origin":558272,"position":4},"title":"Are things getting ugly in the tobacco industry?","author":"enterpriseam admin","date":"24 March 2021","format":false,"excerpt":"The tender for a license to establish Egypt\u2019s second major tobacco company could face an antitrust probe after several tobacco players filed a formal complaint with the Egyptian Competition Authority (ECA) on the sale conditions, Masrawy reports, citing unnamed sources it says are in the know. Four major tobacco distributors\u2026","rel":"","context":"In "COMPETITION WATCH"","block_context":{"text":"COMPETITION WATCH","link":"https:\/\/enterpriseam.com\/egypt\/category\/competition-watch\/"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/ent.news\/2021\/3\/295.jpg?fit=%2C&ssl=1&resize=350%2C200","width":350,"height":200},"classes":[]},{"id":558237,"url":"https:\/\/enterpriseam.com\/egypt\/2021\/08\/02\/good-news-for-fdi-watchers\/","url_meta":{"origin":558272,"position":5},"title":"Good news for FDI watchers","author":"enterpriseam admin","date":"2 August 2021","format":false,"excerpt":"Tobacco giant Philip Morris is among several tobacco companies with local operations that are said to be interested in bidding for a license to set up Egypt\u2019s second tobacco company, Federation of Egyptian Industries\u2019 (FEI) cigarettes division Head Ibrahim Embaby told Al Mal. 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