Statement of clarification about the Regie's tobacco pricing process

01 July 2020
Statement of clarification about the Regie's tobacco pricing process

Under the current economic circumstances, the Regie would like to clarify the following to the public:

 
1. 

The production of local tobacco brand (cedars) relies on raw materials that are purchased in foreign currency either from local (cardboard – printings – filters – aluminum…) or overseas (tobacco – cigarette papers – flavors…). Hence sale prices of local products are affected by the dollar’s exchange rate.

 
2. 

The local Lebanese tobacco, which is purchased from farmers (oriental tobacco) holds no more than 5% of Cedars production process, as it is an American blend and the best-selling flavor. The remaining crop are, in fact, exported within agreements of exchange signed with renowned tobacco companies.

 

 
3.

. The Regie pays the price of (ready-to-use) tobacco products in US Dollar, while the Ministry of Finance has been undertaking since 1987 to set the wholesale price of tobacco products delivered to the Heads of Sales in US Dollar, who, in turn, deliver such products to retailers that is the customer exclusively in Lebanese Pound according to the circulated exchange rate.

 
4. 

The Regie has chosen to calculate the average price of its payments in US Dollar and those in Lebanese Pound; whereas the price that the Regie has set for the customer is no more than 48% of the Dollar’s circulated rate. Further clarification is detailed in the below table:

 

Cedars price per pack before the crisis

Price per pack against the market’s (current) exchange rate

Price per pack against the Regie’s(current) arrangement

1,250 L.L.

7,750 L.L.

3,750 L.L.

     This chart will be modified according to the exchange rate of Dollar in the Lebanese Market .

5. 

The Regie is an investment enterprise (industrial and business) in the first place, therefore cash-flow in foreign currencies ensures its continuation and the national production process.

 

Updated price list may be found on the following link:

 www.rltt.com.lb/Prices   
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