Tag: South Korea

  • Private baths, public spaces

    Private baths, public spaces

    People living in apartment blocks in South Korea are to face stricter smoking restrictions, according to a story in The Korea Herald.

    The Ministry of Health and Welfare and the Ministry of Land, Infrastructure and Transport said yesterday the government would increase smoking restrictions at multi-dwelling units through a legal revision that would take effect on February 10.

    Currently, common areas in such blocks, such as elevators, stairs and hallways, are designated ‘manageable spaces’, which the managing authorities, with the consent of half the residents, can declare non-smoking areas.

    The Herald reported that, under the existing regulations, ‘balconies and bathrooms in individual units’ had been out of bounds to the managing authorities, as they were designated private spaces.

    ‘With the revision, a resident, sensing that someone is smoking, can report the claim to the management authorities,’ the Herald said. ‘The authorities will have the right to investigate the matter by searching private dwellings.’

  • Taxes on taxes on taxes…

    Taxes on taxes on taxes…

    The retail price of refill packs of heat-not-burn (HNB) cigarettes is likely to rise to more than 5,000 won ($4.59) next year following the passing of another bill to raise taxes on these products, according to a story in The Korea JoongAng Daily.

    The National Assembly voted on Friday to raise taxes by 532 won to 1,292 won. The bill will go into effect next month.

    Last month, the assembly passed a bill to hike a special consumption tax on these products by 403 won to 529 won. The tax increase was applied from this month but has not affected prices.

    And yet another bill is waiting for a vote later this month on whether to raise the ‘special charges’ on these products for the so-called ‘National Health Promotion’ from 438 won to 750 won. Industry sources say this vote is highly likely to pass.

    If next month’s bill goes through, the total amount of taxes imposed on heat-not-burn cigarette-refills will rise to 2,986 won from 1,739 won earlier this year.

    That would be an increase of about 72 percent and would bring the taxes imposed on HNB products to about 90 percent of those imposed on combustible cigarettes, 3,323 won.

    All three heat-not-burn cigarette refills in Korea – used with Philip Morris International’s IQOS, British American Tobacco’s glo and KT&G’s lil – have been selling for 4,300 won for packs of 20.

    This has made them slightly cheaper than combustible cigarettes, most of which sell for 4,500 won for 20.

    The tax increases on HNB products could make them more expensive than combustible products, though no manufacturer has revealed plans of by how much or when it will raise prices.

    During the past few months, PMI and BAT have reacted to government tax rises by saying they are discussing the matter internally. But KT&G said at lil’s launch event last month that it was not considering a price rise, and it is maintaining that stance.

  • Export award for BAT Korea

    Export award for BAT Korea

    British America Tobacco Korea’s plant in Sacheon, South Gyeongsang Province, has received an award for exporting products to the value of more than $200 million, according to a story in The Korea Herald quoting the company.

    The Sacheon Factory was said to have exported products worth $208 million to 15 countries between July 2016 and June 2017.

    The $200 million mark was reached one year after the plant had exported products valued at $100 million because of the installation of additional capacity at the factory in June.

    The factory currently has a capacity of 40 billion pieces a year, comprising 450 brands of combustible cigarettes and heat-not-burn (HNB) Neostiks for use with BAT’s HNB device Glo. The Sacheon factory produces all the Neostiks sold in Korea and Japan.

    For reaching the $200-million-mark, BAT received on Tuesday the Export Tower Award at the 54th Annual Trade Day ceremony hosted by the Ministry of Trade, Industry and Energy, and supervised by the Korea International Trade Association.

    “BAT Korea Sacheon Factory’s exports doubling within just a year goes on to show that the high quality of ‘Made in Korea’ products is being recognized throughout the globe,” said Matthieu Juery, CEO of BAT Korea.

    The Sacheon Factory is said to have maintained since 2003 top rankings among the BAT Group’s 44 factories worldwide in respect of the production quality index and the product quality index.

  • Sales falling in South Korea

    Sales falling in South Korea

    Cigarette sales in South Korea are expected to fall by 5-6 percent this year, according to a Yonhap News Agency story quoting an official at the Ministry of Health and Welfare.

    Sales fell by 23 percent, from 4.3 billion packs in 2014 to 3.3 billion packs in 2015, after the government imposed a cigarette-tax increase at the beginning of 2015 that took the prices of cigarettes from 2,500 won to 4,500 won a pack.

    Sales increased by nine percent to 3.6 billion packs in 2016 but they are set to fall to 3.4 billion packs this year.

    At the same time, the smoking rate for men over 19 years old fell to 39.4 percent in 2015 from 43.1 percent a year earlier, the first drop since 1998, when the smoking rate was first tallied.

    The smoking rate among this group rose to 40.7 percent in 2016 but is expected to drop again this year,

    “Cigarette sales have declined this year from the previous year as the graphic warning images and the expansion of non-smoking zones have taken effect,” the official was quoted as saying.

    The government mandated in 2016 that tobacco companies place graphic warnings on the upper part of cigarette packs and, earlier this year, it said that those warnings should occupy 30 percent of the front and back of cigarette packs.

    The graphic warnings must be placed on packs of e-cigarettes and chewing tobacco, too.

    South Korea has been expanding non-smoking zones in public places for the past few years, but such measures have fallen short of a far-reaching ban.

    And the country allows some cigarette advertising, promotions and sponsorships.

  • KT&G ambitions grow

    KT&G ambitions grow

    South Korea’s KT&G aims to become one of the world’s top four tobacco manufacturers by 2025 by tapping into emerging markets and quadrupling its overseas sales, according to a story in The Pulse.

    KT&G announced its mid- to long-term ambitions at its headquarters in Daejeon yesterday, saying that it would work hard to develop new brands and pursue a bold reorganization.

    To achieve its goal of more than quadrupling its global sales and entering markets in Latin America and Africa, it would establish regional offices in the Asia-Pacific, America, Africa and Eurasia that focused on developing brands that met the needs of local consumers.

    The value of KT&G’s overseas sales reached 941.4 billion won ($868 million) last year through the sale of 48.7 billion cigarettes.

    Its overseas sales, amounting to 2.6 billion cigarettes in 1999, started to increase in 2002 after privatization.

    Between January and September this year, the company sold 41.5 billion cigarettes overseas, which puts it on stream to hit a record high this year.

    Meanwhile, KT&G has been maintaining its leading position in the local market with a share of 60 percent.

  • E-cig tax hike coming

    E-cig tax hike coming

    Tobacco sticks for heat-not-burn devices are due to become more expensive in South Korea after lawmakers there passed a bill yesterday to increase taxes on them, according to a story in The Korea JoongAng Daily.

    Currently, the tax on a pack of 20 tobacco sticks is 126 won ($0.11), while the tax on combustible cigarettes is 594 won.

    But under the revised law, the consumption tax for sticks will rise to 529 won.

    When combined with other taxes, such as the regional education tax and value-added tax, the total tax on sticks currently add up to 1,739 won, but that is set to rise to 2,990 won.

    By comparison, the total tax on combustible cigarettes is 3,323 won.

    The effect on the retail price is expected to be a 700 won increase on a 20-stick pack, taking it from 4,300 won to 5,000 won.

    The bill passed with overwhelming support. Of the 239 lawmakers who voted, 230 were in favor, one was opposed and eight abstained.

    Having unleashed a monster when it hiked taxes on combustible cigarettes at the beginning of 2015, the government is taking steps to curb bulk buying and hoarding ahead of the imposition of the latest tax increase.

    The Ministry of Strategy and Finance is restricting the amount of tobacco sticks that manufacturers can supply to the market to 110 percent of the average supply during the past three months.

    Any retailers who commit profiteering could face up to two years in prison or a 50 million won fine, the ministry said.

  • KT&G launches HNB device

    KT&G launches HNB device

    KT&G rolled out its heat-not-burn (HNB) device at a press conference in Seoul yesterday and, in doing so, became the third tobacco manufacturer after Philip Morris Korea (PMK) and British American Tobacco Korea (BATK) to launch such products in South Korea, according to a story in The Korea Herald.

    Competition in the HNB market sector is expected to heat up as Korea’s largest cigarette manufacturer enters the sector offering lil at a lower price than those of its two rivals.

    Lil will sell at retail for 95,000 won ($85). However, customers can apply through KT&G’s website for discount coupons that will bring the price down to 68,000 won at GS25 convenience stores.

    The discounted lil price is lower than that of PMK’s iQOS, whose discounted price is 97,000 won and BATK’s glo, whose discounted price is 70,000 won.

    KT&G has said also that the company is unlikely to increase HNB stick prices even if the government increases the taxes on them.

    “The company is currently not considering price hikes on its tobacco sticks,” said Lim Wang-seop, chief of KT&G’s innovative product department.

    “KT&G will go through discussions and watch the market if the government decides to raise taxes on the sticks. But the company could just keep the current price as a measure to become more aggressive in the market.”

    Each pack of tobacco sticks used with KT&G’s device is priced at 4,300 won, the same price as that of the other HNB sticks. PMI and BAT have each previously said that they might raise the prices of their sticks if the National Assembly increases taxes.

    Meanwhile, the legislation and judiciary committee of the National Assembly on Monday passed a proposal to raise the excise tax on HNB products to a level equal to 90 percent of the tax levied on conventional cigarettes. If the bill passes the floor this month, each 20-piece pack of HNB sticks will be taxed at 529 won, up from the current 126 won.

    Further, the tax for HNB sticks could increase to 1,250 won when bills aimed at increasing the Health Promotion Fund tax and local education tax are also passed at the National Assembly.

    KT&G will start taking orders for lil between November 13 and 16 at GS25 convenience stores in Seoul, and begin commercial sales on November 20, the company said.

    It planned to focus firstly on the domestic market but would come up with plans for selling lil on overseas markets.

  • Tax increase ‘effective’

    Tax increase ‘effective’

    The cigarette tax- and price-hike that was imposed in South Korea at the beginning of 2015 has been effective in discouraging smoking amongst low-income earners and young people, but not in the case of high-income earners, according to a story in The Korea Herald citing the results of a public health and nutrition survey by the Ministry of Health and Welfare.

    An increase in taxes in January 2015 took the price of cigarettes from 2,500 won to 4,500 won.

    The survey found that the smoking rate among low-income males fell from 45.9 percent in 2014 to 40.6 percent the following year, but increased in 2016 to 41.1 percent.

    “There were claims that the cigarette price hike will increase the burden of ordinary people whose smoking rate is comparatively higher,” a ministry official was quoted as saying. “The effect of making people quit smoking was definitely clear among people who have less money.”

    The smoking rate among middle- and high-school ‘boys’ fell from 14.0 percent in 2014 to 11.9 percent in 2015 and to 9.5 percent in 2016 and 2017.

    For high-income earners, the smoking rate fell from 38.2 percent in 2014 to 35.9 percent in 2015 but increased to 38.5 percent in 2016.

    Meanwhile, the ministry said the number of people enrolling in programs to quit smoking had gone from 450,000 in 2014 to 870,000 the following year. Last year, 830,000 people enrolled.

  • Smoking rate down, but high

    Smoking rate down, but high

    The smoking rate among South Korean men aged 19 and older has fallen in recent years, but the rate remains high, according to a story in The Korea Herald.

    Citing data from Statistics Korea, the Herald reported that the smoking rate among this group was 39.1 percent in 2016, down from 43.3 percent in 2014. There was no data on the smoking rate in 2015.

    Separate data compiled by the Organization for Economic Co-operation and Development put the smoking rate of South Korean men aged 15 and older at 31 percent in 2015, the highest among the 15 OECD countries surveyed.

    Japan came in second with 30 percent, followed by Italy with 25 percent.

    In 2015, South Korea increased the price of cigarettes by 80 percent, from 2,500 won ($2.25) per pack to 4,500 won.

    And the South Korean government in 2016 brought in a requirement that tobacco companies included graphic warnings on the upper part of cigarette packs.

  • Retailers face jail threat

    Retailers face jail threat

    South Korea’s Ministry of Gender Equality and Family yesterday announced that it would be designating heat-not-burn (HNB) tobacco products as harmful devices that may not be sold to minors, according to a story in The Korea Herald.

    Under current regulations, restrictions on the sale of vapor devices to minors apply only to electronic cigarettes.

    There are no restrictions on HNB systems.

    Once the new rules go into effect, those who sell HNB products to minors will be subject to a prison sentence of up to three years or a fine of up to 30 million won ($26,670).