Small retail shops depending on tobacco sales for much of their revenue could face a bleak future this year after a series of new tobacco regulations took effect Thursday, raising cigarette prices and smoking-related fines nationwide.

The average cigarette pack now costs 4,500 won ($4.10) after the parliament approved an increase in related taxes last month. The fine for smoking indoors at public restaurants or coffee shops is now 100,000 won, while shop owners who allow indoor smoking can now be fined up to 5 million won.

But cigarette displays at local retail stores were already empty on the first day of the year, as smokers hoarded cigarettes before the price hike took effect. Local store owners saw it as a bad omen.

“It’s not good for business,” a store owner in downtown Seoul said when asked about her empty cigarette stalls. “I wish I had some packs to sell, but they’re all out, and I won’t get any new deliveries until Saturday.”

Other store owners reported only a few sales, or none at all, on Thursday.

Tobacco industry officials were rumored to be warning local retailers to prepare for a cold winter, as the price hike was expected to depress sales and revenue and persuade more smokers to try to quit.

But revenue could rebound later this year, as smokers who initially try to quit resume their habits, analysts said.

Small retail shops across Korea generally depend on cigarettes for up to 60 percent of their revenue. But with the increase in prices, some local stores could shut down, or suffer hits in their sales.

“Every time we sell a pack, we take about 3 to 5 percent of the entire cost,” one local 7-Eleven owner said. “But with the price rise, the increase in revenue will not make up for the loss in total sales.”

There were also some price discrepancies. Products from British American Tobacco Korea and Japan Tobacco International Korea maintained their old prices.

The two companies are taking longer to finalize new price arrangements, as their headquarters are outside Korea.

A JTI Korea official said the company will need time to decide how much to raise their prices, as the recent tax hike was a "crucial matter." BAT Korea officials were not available for comment.

Critics reportedly accused BAT Korea and JTI Korea of unfairly dodging the new regulations by delaying their price hikes.

But officials from the two companies reportedly said they were actually playing a losing game, as they were subject to higher taxes while their revenues remained the same.

By Jeong Hunny (hj257@heraldcorp.com)