EXCLUSIVE Egypt amends tender conditions for cigarette manufacturing license

Egyptian authorities have issued an amended invitation to tobacco companies to bid for a cigarette manufacturing license, according to a document seen by Reuters, after four companies complained the conditions were too restrictive.

The license could end a decades-old monopoly held by the state-owned Eastern Company (EAST.CA) which has a 70% market share.

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

Under the new conditions, sent to tobacco companies on June 1, the successful bidder should agree to produce 1 billion cigarettes per year instead of 15 billion per year.

The authorities also removed a rule stating that they would not offer any further licenses after the bidding for a decade, according to the updated document from the Egyptian Industrial Development Authority.

The deadline for submitting tenders in the amended tender is August 1.

In March, the Industrial Development Authority invited companies to bid for a license. Four companies – Nakhla Tobacco Co, Imperial Tobacco, British American Tobacco (BATS.L) and Al-Mansour International Distribution Co – complained that the winner would have an unfair advantage over their competitors. Shortly after, the tender was postponed.

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