Government tries to prevent hoarding

Despite the government’s efforts to crack down on cigarette hoarding, large numbers of smokers across Korea are managing to stock up ahead of a major price hike next year, according to a story in The Korea Times.

The government has threatened fines of up to WON50 million ($48,000) for cigarette hoarding following its decision to raise tobacco prices next year by WON2,000 per pack – from about WON2,500 to WON4,500 per pack.

The measure, however, seems to have had only a limited impact, partly because it does not target consumers, but only tobacco manufactures, importers and retailers. In addition, news of the fines was not widely disseminated, especially among small and mid-sized stores.

The Times said that many owners of convenience stores and supermarkets had seen big spikes in cigarette sales since the price hike announcement on September 11, and that thousands of smokers were managing to stockpile cigarettes.

The Ministry of Strategy and Finance said that it would co-operate with other relevant authorities, including the National Tax Service and the Fair Trade Commission, if it were necessary to stabilize the tobacco market.

Yet some people are skeptical about whether the government can limit cigarette stocking.

“Rumors are that big retailers and convenience chains are also hoarding cigarettes, since they do not have an expiration date,” said a convenience store owner, who refused to be named.