Philip Morris Enters Egypt Market Following Disputed Tender

Swiss tobacco giant Philip Morris International (PMI) obtained a stake in a company that won a disputed license to make and market cigarettes in Egypt, one of the world’s most desirable tobacco markets. The company’s full ownership details are not public, but one of PMI’s fellow shareholders is a PMI distributor.

Swiss tobacco giant Philip Morris International (PMI) gained a foothold in Egypt, one of the world’s most valuable tobacco markets, via an Egyptian company whose full ownership details are a closely-guarded secret and a licensing process that was protested by rival companies.

The Swiss firm, the largest tobacco company in the world outside China, had its eye on Egypt as long ago as the early 1980s, according to a WHO report from 2003. But efforts by private companies to dominate the north African country’s market have long been frustrated by Egypt’s Eastern Company, which until recently controlled all cigarette production there and was majority-owned by the state.

Under pressure from the International Monetary Fund to privatize state assets as a condition for receiving billions of dollars in bailouts, Egypt has loosened its hold on the tobacco industry, allowing private investors to make inroads.

That led in 2021 to Egypt’s Industrial Development Authority inviting private tobacco firms to bid for a license to manufacture cigarettes. In April 2022 it awarded the tender to United Tobacco Company. Media reports at the time described United Tobacco as a PMI “subsidiary,” but the Swiss firm’s stake was only confirmed in a U.S. Securities and Exchange Commission filing in mid-2023.