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Tobacco sales bounce back despite price hike

Despite the price hike aimed at curbing cigarette consumption, tobacco sales in South Korea recovered to the level of a year earlier in July, raising questions over the effectiveness of the government policy.

According to a report by the Korean Smokers’ Association submitted to Rep. Yoon Ho-joong of the main opposition New Politics Alliance of Democracy, the number of cigarette packs sold in July stood at just over 350 million, close to the average monthly sales over the past three years, 362 million.

(Yonhap)
(Yonhap)

Tobacco sales more than halved to 170 million packs in January, compared to the same period a year earlier, after the government raised tobacco prices by 2,000 won ($1.70) per pack from 2,500 won to 4,500 won on New Year’s Day.

The 80 percent price hike came as part of the government’s efforts to lower the nation’s smoking rate amid public health concerns. South Korea has one of the highest male smoking rates among OECD countries at 43.7 percent, according to the Health Ministry.

But the figures have gradually bounced back, with sales increasing from 240 million in March to 270 million in May and 350 million in July, the report said.

The recovering sales, coupled with the accompanying rise in tax revenues, rekindled a debate over whether the government‘s price hike was to benefit the nation’s health or to collect more taxes.

According to the Ministry of Strategy and Finance, the government secured an extra 1.2 trillion won in tax payments in the first half of this year compared to the same period last year.

“The government stressed that the price hike was aimed at promoting public health, not at reaping tax revenues, but it only resulted in putting more burden on smokers,” said Rep. Yoon.

“The authorities cannot get away from criticism that it raised the cigarette price to make up for the shortfall in last year’s tax revenues,” the lawmaker added.

The government has been increasing its antismoking campaigns in recent years, including its push for a bill that makes it obligatory for tobacco-makers to display word and image warnings on cigarette packs.

The passage of the antismoking bill finally came earlier this year, after 11 attempts since its first try in 2002. It would deter Koreans from smoking by highlighting the dangers through pictorial warning labels required to cover more than half of the cigarette packs.

Lawbreakers could face up to a year in jail or 10 million won in fines, or revocation of the company’s business license. The bill will take effect next December after an 18-month grace period.

But the Korean Smokers’ Association opposed the bill, calling it a “gimmick” to cover up the controversy over the tobacco price hike.

“The government’s policy turned out to be a failure and it needs to allow smokers to participate in the decision-making process,” it said in a statement in May.

Doubts linger over whether the graphic warnings on cigarette packs will help Koreans give up smoking, with no countries having succeeded in lowering the smoking rate through such a measure.

Unclear clauses in the new plan, which stipulates that the images on cigarette packs must not be “excessively” repulsive, are also likely to leave room for argument between the authorities and tobacco industry.

By Ock Hyun-ju (laeticia.ock@heraldcorp.com)
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