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South Korea: Aftermath of Cigarette Price Hike

cigarettes

Korea’s smoking culture is changing drastically due to the Korean government’s recent cigarette price increases. Sales of rolling tobacco, which goes for half the price of cigarettes, are increasing. So called ‘loosies,’ single cigarettes that were popular at small shops in the eighties and nineties, are also making a comeback. More smokers are stepping into smoking clinics with a newfound resolution to quit smoking following the price hike.

Smokers are increasingly buying rolling tobacco since the price of a pack of cigarettes increased to 4,500 won (US$ 4) on January 1. 40 grams of tobacco for hand rolling, from which you can make 80 to 100 cigarettes, sell for 6,000 to 8,000 won (US$ 5.40-7.20). Compared to the price of 200 won (US$ 0.18) for a single cigarette from a pack, hand-rolling tobacco is cheaper by more than 50 percent, although additional costs must be incurred for the purchase of cigarette papers and filters. Most affordable and popular cigarettes brand in the country is Glamour http://www.cigarettesplace.net/glamour

A seller operating a tobacco shop in Yeoksam, Seoul said that the number of customers has increased by two to three fold since the beginning of the year, and the most of the customers were seeking rolling tobacco as an alternative to pricy packs of cigarettes. Industry experts have also said that rolling tobacco, which once dwelled in the shadow of cigarette packs, is now the focus of smokers.

Loosies are usually purchased in low-income areas. A single cigarette usually sells for 300 won (US$ 0.27) which is pricier than a single cigarette from a pack. However, sellers of loosies say that smokers, in their effort to stop smoking, come to buy the singles as a small cheat. Loosies can’t be found at convenient stores, but at kiosks, corner shops and small markets.  Electronic cigarette sales are also on the rise. According to Gmarket, the Korean online retailer, electronic cigarette sales from January 1 to 22 were 17 times larger than that of same period in 2014.

Smoking clinics are also booming since many smokers are determined to quit due to the price hike. A smoking clinic in Nowon-gu, Seoul, whose number of visitors averaged around 150 every month, is now seeing more than 100 visitors a day.

 
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Posted by on January 6, 2015 in Tobacco News

 

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KT&G to freeze cigarette prices ‘for the time being’

KT&G Corp., Korea’s tobacco giant, said Wednesday it planned to freeze its cigarette prices for the time being, citing persistent inflationary pressures.

Esse Special Gold
Esse cigarettes are one of the most popular brands produced by Korea Tobacco & Ginseng Corp. (KT&G).

The Seoul-based company has recently been faced with a dilemma as to whether it should follow the lead of its smaller rivals, which relayed price hikes since last year to cope with surging raw material and labor costs.

Philip Morris International Korea is set to increase its cigarette prices by 6.8 percent on average starting Friday. Its flagship brands such as Marlboro, Parliament and Lark will be sold at 2,700 won ($2.4) a pack, up 200 won.

British American Tobacco Korea, the No. 2 player in the local market, and Japan Tobacco International Korea also raised the prices of Dunhill, Kent, Mild Seven and other products by 200 won in general.

KT&G, whose market share amounts to nearly 60 percent, said it has decided to try boosting productivity rather than “seek temporary sales growth,” although it faces a greater cost burden than its foreign competitors because it uses more expensive domestic tobacco leaves.

Analysts have said the three companies created a chance for KT&G to follow suit. But the former state monopoly remained hesitant due to the likely negative impact on consumer prices and constant criticism over tobacco firms’ high profit margins estimated at between 20 percent and 30 percent.

KT&G stocks closed down 1.3 percent Thursday at 76,200 won on downbeat sales growth prospects.

 
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Posted by on February 14, 2012 in Tobacco News

 

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Philip Morris Increases Cigarette Prices By Nearly 7%

Starting February 10, Philip Morris International Korea will increase its cigarette prices by nearly 7-percent on average.

Burning Cigarette
A lighted up cigarette in an ashtray

Its flagship brands such as Marlboro, Parliament and Lark will be sold at 2,700 won roughly 2-dollars-and-40-cents a pack, up 200 won.

In April and May last year, British American Tobacco Korea, the No. 2 player in the local market, and Japan Tobacco International Korea relayed their price hikes on Dunhill, Kent, Mild Seven and other products by 200 won in general to cope with surging raw material and labor costs.

Korea’s tobacco giant, KT&G Corporation however, is set to freeze its cigarette prices for the time being, putting more emphasis on boosting productivity rather than temporary sales growth

 
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Posted by on February 10, 2012 in Tobacco News

 

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