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Al-Ahram Weekly
30-06-2025
- Business
- Al-Ahram Weekly
Eastern Company to cap cigarette price at EGP 45: CEO - Economy
Eastern Company CEO Hany Aman announced that cigarette prices will be capped at EGP 45 per pack starting Tuesday following recent tax bracket changes. Aman told MBC Masr that the company had reached the upper limit of the current tax bracket, and maintaining previous prices was causing losses. Rising raw material and transportation costs have significantly increased production expenses. Approximately 90–95 percent of cigarette components, including tobacco, paper, and agricultural gum, are imported and priced in foreign currency, which adds financial pressure amid currency fluctuations and global price hikes. Before the tax changes, cigarettes were officially retailed at EGP 38 per pack, with nearly 60–65 percent of the price collected in taxes. The new rules allow prices up to EGP 48 per pack, but Aman confirmed Eastern Company will keep prices below that ceiling, not exceeding EGP 45. Sales were paused on Sunday and Monday to adjust pricing, with the new rates taking effect on Tuesday. Aman said the company is still assessing the full impact of the updated tax regulations and may provide further updates soon. Shisha tobacco (Muʽassel) will not be affected by the new taxes. 'There has been no increase in taxes on Muʽassel, and price hikes are unlikely during this period,' Aman said. Cigarettes remain Eastern Company's largest product by consumption and contribution to the national budget. Separately, Ibrahim Embaby, head of the tobacco division at the Federation of Egyptian Industries, stated that the revised price brackets stand at EGP 48 for the lowest tier and EGP 69 for the mid-tier. Earlier on Sunday, the House of Representatives approved a government-drafted law amending the Value Added Tax (VAT) on cigarettes, which will increase the minimum and maximum retail prices by 12 percent annually for three years starting next November. Follow us on: Facebook Instagram Whatsapp Short link:
Mada
18-05-2025
- Business
- Mada
State tobacco company penalizes workers after union refuses to sell employee shares to undisclosed client
After workers refused to sell their shares in the Eastern Company for tobacco manufacturing to an undisclosed investor, the partially state-owned company's management decided in early May to ban six workers from entering its premises and suspend bonus payments for 19 others for six months, according to two banned workers and a member of the company's shareholder workers union board who spoke to Mada Masr on condition of anonymity. The punitive measures, still in effect, came in the wake of general assemblies held by the workers union in February and April, during which workers objected to the proposed sale of their shares at below-market value to an anonymous investor represented by EFG Hermes Promoting and Underwriting. One of the banned workers was told by a supervisor in a voice message that the company's employee transportation department had instructed the supervisor to prevent the worker from boarding the bus to work. 'I tried to understand what was going on, but the answer was that these are instructions from the board of directors,' the supervisor said in the voice message reviewed by Mada Masr. Eastern Company CEO Hany Aman declined to comment to Mada Masr on the legality of the company punishing workers for activity in the union, a legally distinct entity. The workers shareholders union holds over 156 million shares — roughly 5.2 percent of the company's total, according to the company's disclosure to the stock exchange in April. The largest stake, 30 percent, is held by UAE-based Global Investment, followed by the state-owned Chemical Industries Holding Company, which owns 20.95 percent. The board of the company's workers union had called for an extraordinary general assembly on February 21 to approve a sole purchase offer for the workers' shares. The meeting also sought workers' approval to dissolve and liquidate the union and appoint a liquidator for a fixed term — both actions contingent on the assembly's acceptance of the purchase offer. But workers refused to vote, protesting the sale in the absence of a fair valuation of their shares, according to several shareholder workers who spoke to Mada Masr at the time. The offer prepared by EFG Hermes expired on February 28. Following the February meeting, the tobacco-manufacturing company's management referred 25 union members to investigation over alleged acts of vandalism and disorder during the assembly, several of those investigated told Mada Masr. They added that management later offered to drop the investigations in exchange for their agreement not to attend future assemblies and to stop communicating with the Financial Regulatory Authority regarding the legitimacy of the proposed sale terms. A board member of the union told Mada Masr at the time that the 25 workers were singled out from a much larger group of attendees who had chanted against the sale, and that no acts of sabotage or destruction were recorded. Workers attend general assemblies in their capacity as 'investors who hold shares in the company, not as employees,' the same source noted, and therefore the company has no legal grounds to punish them for alleged violations during these meetings. He added that the media's portrayal of the events was 'unacceptable to us and damaging to the company's reputation.' The issue was resolved at the time through mediation by colleagues and the union board, after which the workers stopped communicating with the Financial Regulatory Authority, as requested by management, the union's board member said. The general assembly reconvened on April 19 to vote again on the proposed sale, but workers rejected the deal once more, insisting that the buyer's identity be disclosed and that the sale process involve multiple offers based on a fair share valuation. Several workers told Mada Masr they believe the company used the earlier investigations as a form of intimidation to pressure workers into accepting the deal at the second assembly meeting in April. EFG Hermes Promoting and Underwriting, the firm representing the anonymous buyer, is a subsidiary of EFG Hermes Holding and is one of the financial advisors selected to manage the privatization and sale of companies owned by the Armed Forces' National Service Projects Organization, as part of the government's state asset offering program announced earlier this month. MP Ehab Mansour submitted an urgent inquiry on April 4 to the prime minister and the ministers of public enterprises and labor, citing workers' complaints of 'dismissals' and 'excessive punitive measures' aimed at coercing the general assembly into approving the only offer on the table, valued at LE5 billion. Indicators, Mansour added, suggest the company is worth no less than LE15 billion.
