The number of cigarettes sold by top-three foreign brands, including Philip Morris Korea, British American Tobacco Korea, and Japan Tobacco International Korea, was 33.9 billion in 2013, down 9.6 percent from 37.5 billion in 2010.(image credit: Kobizmedia/ Korea Bizwire)
SEOUL, May 13 (Korea Bizwire) – Imported cigarette brands have been doing badly for the past few years. That’s largely because of higher prices set above those of home-made brands, combined with the widespread no-smoking trend.
According to the Korea Smokers Association and convenience store industry sources, the total number of cigarettes sold last year was 88.4 billion, or 4.42 billion 20 packs. This is the lowest level since 2007.
Of these, the sales of import cigarettes have declined by a large margin. The number of cigarettes sold by top-three foreign brands, including Philip Morris Korea, British American Tobacco Korea, and Japan Tobacco International Korea, was 33.9 billion in 2013, down 9.6 percent from 37.5 billion in 2010. In contrast, the sales by KT&G rose 2.8 percent to 54.5 billion in 2013 from three years ago.
The trend is more clearly seen in convenience stores. For example, at CU convenience store chains the share of foreign brands was 53.1 percent in 2011 but it fell to the below 50-percent level last year. For 7Eleven stores, the ratio declined to 49.1 percent in April this year from 51.4 percent in 2012.
With the drop in foreign cigarette consumption, the financial results for the suppliers have also suffered. Philip Morris Korea, the company selling Marlboro, Parliament, and the like, posted operating profit of 184.0 billion won and net profit of 140.8 billion won last year, both of which were lower than the previous year.
British American Tobacco Korea, famous for its Dunhill brand, reported an operating loss last year, with a much reduced net profit. Japan Tobacco International Korea, represented by the best-selling Mevius brand (formerly Mild Seven), also saw its operating profit turn to the red in 2013, with a lower sales revenue than the previous year.
Written by Sean Chung (schung10@koreabizwire.com)
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