With handcrafted cigarettes comprising 2 percent of the entire tobacco market (90 million packs a year), government officials estimate the value of lost tax revenue at 300 billion won. (Image: Yonhap)
TONGYEONG, March 14 (Korea Bizwire) — A group of handcrafted cigarette producers and dealers that adopted a front as tobacco leaf retailers and sold their products nationwide has been rounded up and arrested.
The prosecution in Changwon revealed on March 13 that two leaders of a handcrafted cigarette production entity had been indicted and were being detained on charges of violating the Tobacco Business Act, and seventeen others involved in selling the products were likewise indicted but released from custody.
This is the first time a suspect has been detained on charges of production and selling of handcrafted cigarettes in South Korea.
Under current laws, sales of tobacco leaves are permitted, but unsanctioned production and selling of cigarettes is illegal.
Handcrafted cigarette maker confiscated by the authorities (Image: Yonhap)
In addition to the charges of operating a tobacco production company for one year without a permit, the alleged offenders are also accused of omitting the warning labels that must be displayed on cigarette packs, as well as deceiving customers with false advertising messages such as “no hazardous chemical substances included”.
The Ministry of Food and Drug Safety ran an analysis on some of the confiscated cigarettes and found that one cigarette contained between 0.59mg to 1.66mg of nicotine and between 5.33mg to 15.13mg of tar, nearly 100 times the amount in an average market product.
Prosecutors believe around 500 handcrafted cigarette sellers are currently in operation and thriving, with sales of cheaply priced tobacco products growing rapidly in mostly residential areas.
While a pack of cigarettes generally costs 4,500 won, the arrested tobacco merchants sold theirs for 2,000 to 2,500 won each.
With handcrafted cigarettes comprising 2 percent of the entire tobacco market (90 million packs a year), government officials estimate the value of lost tax revenue at 300 billion won.
S.B.W. (sbw266@koreabizwire.com)
