According to a report from the Joongang Ilbo, a Korean daily journal, the main beneficiaries of higher cigarette prices have turned out to be foreign tobacco companies. (Image : Yonhap)
SEOUL, Jan.29 (Korea Bizwire) – According to a report from the Joongang Ilbo, a Korean daily journal, the main beneficiaries of higher cigarette prices have turned out to be foreign tobacco companies.
Despite a rise in prices at the beginning of 2015, cigarette imports have actually increased. Smokers returned to their addiction soon after the prices were hiked, and the ‘low price marketing’ strategies of some foreign tobacco companies have been very effective.
According to the Korea Customs Service, imports last year increased 117.3 percent to $34.6 million compared to 2014. Customs officials say that imports bounced back once people started to break their vows to quit smoking.
Another factor that influenced the increase in imports was lower prices for certain cigarettes. Small packs hold 14 cigarettes, and sell for around 2,500 won, which is cheaper than ordinary cigarette packs (20 cigarettes, 4,500 won).
Imports of small packs from the top five foreign cigarette brands increased by 395.7 percent from $5.03 million in 2014 to $24.9 million in 2015. Over the same period, imports of ordinary cigarette packs decreased 6.2 percent from $7.3 million to $6.9 million.
Vape pens also showed a 33.3 percent increase in imports compared to the previous year. Customs officials explained that cigarettes and vape pens are competitive goods, and as the imports of cigarettes increased drastically, the sales growth of vape pens slowed down in comparison.
By M.H.Lee (mhlee@koreabizwire.com)
