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BAT cuts prices of Vogue amid sales drop

British American Tobacco Korea plans to lower the prices of its Vogue cigarettes less than a year after a controversial markup that triggered a plunge in sales and a customer migration to rivals.

The local unit of the multinational tobacco giant said Wednesday it would bring the prices of Vogue back to 2,500 won ($2.20) per pack, down from 2,700 won, starting Monday.

The pullback is aimed at better competing with other ultraslim cigarettes, the company said, chiefly KT&G Corp.’s Esse, which has long dominated the growing segment here. The majority of Esse’s 17 varieties are sold at 2,500 won a pack.

“The prices of slim cigarettes in the market range from a low of less than 2,500 won and a high of 4,000 won, but we’re trying to keep pace with the mainstream with a 2,500 won price tag,” a BAT spokesperson said.

The announcement comes amid shriveling revenues in the wake of a 200-won hike in April for the company’s core products -- Dunhill, Kent and Vogue.

BAT, the No. 2 player in the Korean market, reportedly saw its sales plummet nearly 30 percent in a month. The Vogue’s market share also fell to 0.78 percent in February from 1.21 percent in March 2011.

KT&G firmed up its lead with its overall market share nearing 60 percent ever since BAT’s markup, from less than 56 percent in the last quarter of 2010.

Its global rivals such as Japan Tobacco International and Philip Morris International also raised the prices of their flagship products including Marlboro, Parliament and Mild Seven by 200 won between April 2011 and February 2012.

By Shin Hyon-hee (heeshin@heraldcorp.com)
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