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KT&G market share nears 60%

KT&G Corp. said Monday that its share in the local market has risen for the second quarter in a row to nearly 60 percent, thanks to robust sales of its new products and price hikes by rival tobacco firms.

Korea’s top cigarette manufacturer said its 55.7 percent stake in the fourth quarter last year climbed to 58 percent in the first quarter this year, then to 59.8 percent in the second quarter. Its average share topped 63 percent for May and June.

KT&G shares closed down about 0.58 percent at 68,300 won ($64) Monday on the Korea Exchange.

Such gains came for the first time since KT&G lifted prices of the majority of its cigarettes by 500 won to 2,500 won per pack in 2004. The Daejeon-based company has seen its dominance gradually dwindle due to intensifying competition and anti-smoking campaigns nationwide.

New brands such as Bohem Cigar and Davidoff have lured new customers among young generations, KT&G said in a statement. Sales of the two soared about 36 and 47 percent respectively in May and June on average compared with April.

But industry watchers pointed to a 200-won increase by British American Tobacco Korea and Japan Tobacco International SA in April as a bigger source that pushed up demand for KT&G cigarettes.

Complaints mounted among customers that the two global firms added to already high inflationary pressures that have squeezed the livelihood of the low-income bracket. Sales of BAT reportedly plunged nearly 30 percent in a month.

Although it reduced the price of its new Dunhill Switch by 200 won to 2,800 won, BAT said “it has no additional plan to lower prices again,” adding that the drop in sales would be a temporary aberration.

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