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Egyptian duty paid cigarettes market in decline as consumers turn to cheap contraband

20 July 2015

The Egyptian cigarettes market has been contracting by over 10% since 2008, as consumers turn to cheap contraband cigarettes due to high prices for duty paid cigarettes caused by the political turmoil in 2011.

Canadean expects cigarette sales to drop by 4.8% to 78.5 billion pieces in Egypt by the end of 2015.One of the reasons for this decrease is that the Egyptian cigarettes market has been dramatically affected by illegal and contraband cigarettes in the last few years,” says Sam Allen, analyst at Canadean. Even though smuggling had never been a major issue in the Egyptian market until recently, the effect of two consecutive increases in excise duty in July 2010 and 2011 meant duty paid cigarettes suddenly increased significantly in price due to supply issues. Combined with the economic fallout from the political turmoil in February to April 2011, this changed the Egyptian cigarettes market as consumers began to seek cheaper tobacco options: The total market share of contraband rose from just 0.3% in 2010 to 18.8% in March 2012.  

Per capita consumption to decline by 10% over the next five years

High levels of unemployment, a weak economy and political and social unrest are problems that are expected to persist for some time across Egypt, negatively affecting the cigarette market in the long term. “Overall sales are likely to only recover slowly due to the ongoing high levels of contraband, and further tax increases will only exacerbate the situation,” says Allen. The recent moves made by the government to limit tobacco consumption, as part of its commitment to the FCTC, will also restrict legitimate sales in per capita terms. 

Expanding population means market continues to grow for now 

Despite the Egyptian population expanding by an estimated 18.2% between 2013 and 2023, the cigarette market is forecast to end 2023 only 6.3% above 2013 levels. This means that, even though overall market expansion will remain positive, this is largely due to population growth, not to increasing sales. However, “as recent political issues subside somewhat, and with ongoing efforts made to combat counterfeit tobacco products, legitimate consumption should account for a higher percentage of consumption in coming years as supply issues return to normal,” says Allen.


Egypt Men Smoking W Logo

Smokers in Egypt turn to cheap contraband as duty paid cigarettes become too expensive.



All numbers used in this text are based on the Canadean report 'Cigarettes in Egypt,' published in July 2015.

Please get in contact if you have any questions to this or other Canadean reports. Analysts are available to comment. Contact the Canadean press office on +44 (0) 207 936 6536 or email


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