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E-cigarette sales rise in S. Korea after tobacco price hike

January 13, 2015

Electronic cigarette (Korea Times file)

By Park Si-soo

Electronic cigarettes have become more popular among smokers in South Korea because of this month’s increase in the price of cigarettes by 2,000 won ($1.83) per pack.

Nicotine patches and other products designed to help reduce the cravings for cigarettes are another beneficiary of the price hike.

Sales of e-cigarettes continue to rise despite warnings from health authorities early this month that liquefied nicotine loaded in e-cigarettes may contain more cancer-causing ingredients than conventional cigarettes.

Online shopping malls are among the retailers that have benefitted from the rise in the sales of e-cigarettes.

G-Market, the biggest online shopping mall in Korea by sales, saw its e-cigarette sales jump 16-fold in December, compared with the same month in 2013.

Sales of smoking-cessation products also surged 400 percent during the same period. A similar trend was found at other major online shopping malls, including 11St and Auction.

“Many smokers seem to feel burdened by the higher cigarette prices,” an industry observer said. “In addition, many smokers used to vow as a New Year’s resolution that they would quit smoking. Against this backdrop, I expect demand for e-cigarettes and smoking-cessation products to rise for awhile.”

Cigarette sales down

KT&G, the country’s biggest cigarette-maker, raised the price of its products by 2,000 won per pack, making its popular products such as This, Esse and Raison, available at 4,500 won or higher per pack. Philip Morris lifted the price to the same level.

British American Tobacco (BAT) Korea will increase the price of a pack of Dunhill cigarettes to 4,500 won from 2,700 won from Jan. 13. Japanese Tobacco International will sell products at inflated prices from Jan. 15.

The price hike has led to sharp sales drop of KT&G and other cigarette-makers. KT&G’s sales fell by half during the first week of the year, compared with the same period of last year.

But its officials seem unlikely to take it seriously.

They said sales will soon rebound sharply, suggesting that people’s struggles to quit smoking tend to be short-lived.

Health and Welfare Minister Moon Hyung-pyo said last year the price hike, pressed by the government, will help cut the country’s smoking rate by 15 percent.

He said that the government will work to lower the smoking rate of adult males to 29 percent by 2020 from the current 43.7 percent.

The ministry expects that the price hike will lead to a 34 percent drop in the overall sales of tobacco products, and that it will likely generate an additional 2.8 trillion won in tax revenue.