What a drag: Egypt’s smokers feel burn of price hikes
Cigarettes are getting more expensive in Egypt thanks to rising production costs spurred by the government’s economic reforms.
More businesses and their cash-strapped customers are feeling the heat from a deal Egypt struck in November with the International Monetary Fund (IMF) for a critical $12 billion loan.
Currently, tobacco companies and smokers are taking a hit.
Eastern Company, Egypt’s only native manufacturer of cigarettes, has increased prices on some of its cheapest, most popular cigarettes due to rising production costs. The company blames a combination of challenges brought about by the government’s IMF-mandatory belt-tightening: an increase in fuel and electricity prices, a value-added tax hike and the November pound flotation.
Company Chairman Mohamed Othman Haroun noted that raw materials that had been imported at an exchange rate of 9 Egyptian pounds to the dollar before the pound floated in November have now dramatically increased.
