TobaccoReporter logo

Tag: South Korea

  • KT&G Volunteers Help With Harvest

    KT&G Volunteers Help With Harvest

    Photo: KT&G

    KT&G volunteers assisted Boeun County tobacco farmers with their tobacco harvest on July 19.

    Farmers in South Korea have been facing labor shortages due to the ongoing decline in rural populations and aging demographics. The situation is particularly critical during the tobacco harvest season in July and August, which is labor intensive and largely unmechanized.

    To alleviate the burden, KT&G volunteers have been visiting tobacco farms annually since 2007. After assisting with transplanting tobacco seedlings in the spring, the employees also contribute to the tobacco leaf harvest.

    Additionally, KT&G has been carrying out welfare improvement projects for tobacco farmers. In June, the company provided KRW420 million ($303,829.67) to support tobacco farmers with health checkup costs, children’s education fees and fuel-saving curing devices. Since 2013, the company has provided KRW4.27 billion, benefiting 15,212 farmers.

    “The company annually conducts employee volunteer activities to support stable farming operations for tobacco farmers facing labor shortages,” said Jung-Ho Kim, head of KT&G’s SCM division, in a statement. “We will continue our support for mutual prosperity with farmers.”

  • VLN Relaunch in Korea

    VLN Relaunch in Korea

    Image: Tobacco Reporter archive

    22nd Century Group announced a new agreement for full-scale commercial rollout of its VLN reduced-nicotine content cigarettes in South Korea. The new agreement with 22nd Century’s local partner, Nico-Tech Korea Inc., follows an initial test launch conducted in 2022 that identified product updates needed to align with local South Korean cigarette characteristics and appeal to the specific preferences of adult smokers in Korea.

    “South Korea is a unique market characterized by high smoking rates and a corresponding high commitment from its government to reduce the harms of smoking,” said Larry Firestone, chairman and CEO, in a statement. “Based on the pilot launch in 2022, we made key product modifications to better align with specific characteristics of combusted cigarettes preferred by South Korea’s adult smokers. We have made those changes and are now ready to fully enter the market with VLN export shipments to South Korea anticipated to begin later this year.

    “This relaunch with our original partner, Nico-Tech, demonstrates their commitment to smoking harm reduction and making VLN products a key part of the South Korean market through the diverse array of local retail channels they serve. We are working with Nico-Tech to plan a full launch event for the fall of 2024, including on-site support.”

    South Korea represents an estimated $1.6 billion tobacco market and was the first international market to commence sales of VLN reduced-nicotine content cigarettes. While tobacco product use has declined since signing into law the 1995 National Health Promotion Act and subsequent government actions, the prevalence of smoking remains high in certain segments of the South Korean population. It is estimated that one in three adult men in South Korea are smokers, and an estimated 6 percent of adult women smoke.

    Nico-Tech will be responsible for all local marketing activities to generate consumer demand and awareness in South Korea. The new agreement includes minimum order quantities to support the initial stocking and restocking needs of the planned South Korean distribution.

  • KT&G Supports Farmers

    KT&G Supports Farmers

    Photo: KT&G

    KT&G delivered welfare improvement support funds amounting to approximately KRW420 million ($303,020) to tobacco farmers.

    This year’s support funds will be used for health checkup fees, child scholarships and the purchase of fuel-saving devices for drying facilities targeting leaf tobacco growers.

    KT&G has been delivering welfare improvement support funds to leaf tobacco farmers annually since 2013, reaching a total of KRW4.28 billion this year. During the same period, the cumulative number of benefiting growers reached 15,212.

    Korean tobacco farmers have been struggling to secure labor due to the declining and aging rural population. Tobacco cultivation is difficult to mechanize, which makes it imperative to look after growers’ health, according to KT&G.

    The fuel-saving device recirculates the heat discharged during tobacco drying. Since 2022, KT&G has provided 214 units.

    The company also assists its farmers by purchasing all domestic leaf tobacco every year and dispatching employee volunteer groups to assist during the planting and harvesting seasons.

    “We continue to support the welfare improvement projects for farmers to alleviate their difficulties and provide practical help,” said Kim Jeong-ho, head of KT&G SCM headquarters, in a statement.

    “We will continue to provide consistent support to improve the health and economic conditions of leaf tobacco farmers.”

  • Korea to Treat Synthetic Nicotine as Tobacco

    Korea to Treat Synthetic Nicotine as Tobacco

    Photo: Purilum

    The government of South Korea aims to regulate synthetic nicotine as tobacco, reports the Yonhap News Agency.

    The Ministry of Health and Welfare and the Ministry of Economy and Finance want to revise the Tobacco Business Act to include synthetic nicotine in the definition of tobacco.

    Tobacco in South Korea is governed by the National Health Promotion Act, under the jurisdiction of the health ministry, and the Tobacco Business Act governed by the finance ministry.

    The current rules define tobacco as a product “manufactured in a state suitable for smoking, sucking, inhaling steam, chewing or smelling, by using tobacco leaves as all or any part of the raw materials.”

    That language fails to capture the e-cigarette liquids made with synthetic nicotine, which is created in a laboratory rather than from tobacco leaves. As a result, vapes are not subject to product requirements, such as health warning labels, age restrictions and tobacco taxes, in South Korea.

    The push for new legislation follows an announcement by BAT that it is mulling the launch of a new synthetic nicotine product in the country. South Korea is reportedly the only nation where the tobacco giant is considering a synthetic nicotine product.

    “We have decided to push for the revision of the Tobacco Business Act when the 22nd National Assembly opens,” an official at the health ministry was quoted as saying. “We will provide necessary materials to the finance ministry, and there is already an abundance of evidence proving that synthetic nicotine is tobacco.”

    The consumption of e-cigarettes has been rising steadily in South Korea, reaching 16.9 percent of tobacco sales in 2023.

  • Outdoor Smoking Bans Constitutional

    Outdoor Smoking Bans Constitutional

    Photo: J. studio

    South Korea’s law designating public facilities, including crowded outdoor plazas, as nonsmoking areas is constitutional, according to the Constitutional Court.

    In an April 25 ruling, reported by the Korea JoongAng Daily, the court held that the National Health Promotion Act, which requires all public facilities, including outdoor spaces, to be designated as nonsmoking areas, does not violate the Constitution.

    Article 9 of the National Health Promotion Act designates public facilities that are 1,000 square meters or more as nonsmoking areas.

    The law was challenged after a smoker fined for lighting up outside of the Bexco convention center in Busan filed a legal case arguing that it was excessive to designate such open areas as nonsmoking areas.

    The case eventually made its way to the Constitutional Court, which held that even public outdoor areas can’t be considered completely free from the risk of secondhand smoke, noting that it is difficult to completely block cigarette smoke even if there are separate nonsmoking and smoking areas.

    The court noted that the need to protect people who do not want to breathe in secondhand smoke is greater than the need to guarantee smokers’ freedom to smoke.

  • KT&G Sued

    KT&G Sued

    Photo: Ian O’Hanlon

    A former KT&G Corp researcher has filed a lawsuit against his former employer claiming that he was insufficiently compensated for inventing “the world’s first e-cigarette” while working at the firm, reports the Yonhap News Agency.

    Kwak Dae-geun demands KRW2.8 trillion ($2 billion), reportedly the highest amount ever claimed by an individual in a South Korean legal action

    According to the suit, Kwak joined the Korea Ginseng and Tobacco Research Institute in 1991 and began developing a tobacco-heating product in 2005.

     In July that year, he registered his first patent for a prototype. In December 2006, he registered another patent for an upgraded version with a controllable heater.

    Subsequently, he developed a full e-cigarette set, and registered a patent for part of the device in 2007 before leaving the company in 2010 as part of corporate restructuring.

    After Kwak’s departure, KT&G allegedly registered patents for some of his technologies without recognizing his contributions.

    In addition to his claim about compensation, Kwak contends that a prominent rival global tobacco firm was able to commercialize its internal heating-based e-cigarette model in South Korea in 2017 due to the absence of overseas patents.

    Kwak’s requested damages reflects his portion of the revenue KT&G is expected to generate through Kwak’s patented technology during the 20-year patent term, as well as what KT&G would have earned if it had registered patents overseas.

    KT&G counters that it has properly rewarded Kwan in the form of offering a technology advisory deal, and that Kwak had agreed not to raise any legal issues.

    The firm also said the technologies invented by Kwak are not currently used in the products it is selling.

    The e-cigarettes being sold by the global firm in question, meanwhile, did not involve technologies patented by Kwak, according to KT&G, which also noted that the rival firm had already commercialized early-model heated tobacco-type products in 1998.

  • New KT&G CEO Engages Employees

    New KT&G CEO Engages Employees

    On the April 17, KT&G President Bang Kyung-Man (third from the left) held a casual meeting with employees to kickstart his focus on communication management. (Photo: KT&G)

    Three weeks after his inauguration, KT&G’s newly appointed president, Bang Kyung-man, engaged in a casual meetings with employees to demonstrate his commitment to robust communication.

    The event was held on the 20th floor of KT&G’s Seoul headquarters, and attended by about 20 employees from various jobs and ranks.

    Bang shared his personal growth story, from joining KT&G as a new recruit in 1998 to taking on the role of CEO 27 years later. In addition to sharing his insights as a company senior, he sought employees’ opinions on the company’s mid- to long-term vision and growth strategies.

    Following his appointment as CEO on March 28, Bang immediately visited KT&G’s Chungnam Headquarters and Seo Daejeon Branch, emphasizing communication with the sales team on the ground.

    “This event was organized to reflect the management’s desire to communicate freely with team members, breaking away from traditional formats and fostering consensus on the company’s vision,” KT&G wrote on its website. “We will continue to promote a culture of bidirectional communication among staff to develop a more horizontal and flexible organizational culture.”

  • KT&G Volunteers Assist With Transplanting

    KT&G Volunteers Assist With Transplanting

    Photo: KT&G

    KT&G volunteers transplanted tobacco seedlings to help tobacco farmers who are struggling with labor shortages.

    The volunteer team consisted of 36 members from the SCM Headquarters Raw Material Business Division and the Gimcheon Factory. They visited a tobacco farm in Jangan-myeon, Boeun-gun, Chungcheongbuk-do, and transplanted about 32,000 tobacco seedlings across approximately 15,000 square meters of farmland.

    KT&G workers have volunteered on tobacco farms for 18 years not only helping with seedling transplantation but also supporting tobacco leaf harvesting activities during the summer, which require intensive labor in hot weather.

    “KT&G has been engaging in activities that provide practical help to farmers for a long time,” said KT&G’s SCM Division Head Jeong-ho Kim in a statement. “We will continue to make efforts to grow together with the farming community and the local society.”

    Additionally, KT&G has been supporting welfare improvement projects for domestic tobacco farmers. In June last year, KT&G paid KRW520 million ($372,949) for tobacco farmers’ health checkups, children’s education fees and support for devices that reduce fuel for curing barns. Since 2013, the cumulative support amount has reached approximately KRW3.85 billion, benefiting a total of 13,050 farmers.

  • South Korea to ‘Refresh’ Graphic Warnings

    South Korea to ‘Refresh’ Graphic Warnings

    Photo: KT&G

    In December 2024, South Korea will mandate new graphic health warnings on cigarette packs, reports mk.co.kr .

    The new warning pictures and phrases, the fifth approved set under the National Health Promotion Act, will be applied Dec. 23, 2024, through Dec. 22, 2026. The fourth approved set of warnings expires on Dec. 22, 2024.

    The new warnings replace two out of 10 types of pictures on cigarette packs, increasing the proportion of the disease depicted, and the phrase changes from a word to a sentence.

    For e-cigarettes, the subject of the warning pictures will increase from one to two, but the warning phrases will remain the same.

    “The fifth warning picture and phrase comprehensively considered the analysis of domestic and foreign policy studies, public surveys and opinions of related experts,” said Jeong Yeon-hee, head of the Health Promotion Division at the Ministry of Health and Welfare. “We set it as an effective plan to prevent smoking and induce smoking cessation by utilizing the purpose of introducing the cigarette pack health warning notation system.”

  • Top KT&G Shareholder Opposes CEO Nominee

    Top KT&G Shareholder Opposes CEO Nominee

    Photo: zzzdim

    KT&G’s biggest shareholder is opposing the nomination of Bang Kyung-man as the cigarette manufacturer’s new CEO, reports Yonhap News. The Industrial Bank of Korea (IBK), which owns about 8 percent of KT&G, cited falling profitability and dubious business practices during the nominee’s tenure as a board member.

    On Feb. 22, KT&G’s CEO candidate recommendation committee selected Kyung-man Bang, senior executive vice president of KT&G, as the final CEO candidate, citing his performance on criteria such as management expertise, global acumen, strategic thinking skills, stakeholder communications and universal morality and ethical awareness.

    KT&G shareholders are due to vote on the nomination during the company’s annual general meeting on March 28. The appointment would mark KT&G’s first leadership change in nine years.

    IBK opposes Bang’s nomination because “KT&G’s operating profit has fallen more than 20 percent” since he was appointed as vice president of the cigarette maker, an IBK official was quoted as saying.

    “Given a decision to secure friendly shares using its own stocks, the independence and fairness of the current board of directors are bound to be seriously questioned,” the official said.

    In a regulatory filing dated March 12, IBK also made a shareholder proposal to improve KT&G’s governance by strengthening the expertise and independence of the board of directors.

    KT&G has faced pressure recently to be more transparent in its CEO selection process. In a video published ahead of the South Korean tobacco firm’s annual general meeting, KT&G shareholder Flashlight Capital Partners highlighted what it considered the problems during previous CEO nominations.

    In January, the incumbent CEO, Baek Bok-in, said he would not seek reappointment.