Local cigarettes are among cheapest in the world

Tobacco is so cheap in Korea that smokers can buy five packs of cigarettes at a price that would only get them one in Europe, according to the Korea Institute of Public Finance.

A recent monthly report of the institute showed that the average price of a pack of cigarettes domestically manufactured was 1.68 euros ($2.29) as of last year, if using the August 2013 exchange rate.

The institute compared it with prices of domestic cigarette products in EU member countries, which were topped by Ireland at 8.95 euros and England at 8.15 euros.

“The prices of cigarettes in many EU countries are quite high, between 4 euros and 8 euros,” said Choi Seng-eun, a researcher who authored the report.

Even Eastern European countries, where smokes are much more affordable compared to Western Europe, sell a pack of cigarettes between 2 euros and 3 euros. The cheapest price for a pack of cigarettes in Europe was in Bulgaria at 2.36 euros.

The discrepancy in tobacco prices between Korea and other countries has widened, as the Korean government froze the price at 2,500 won for the past decade. The last time Korea raised tobacco prices was in 2004, when it jumped 500 won.

Korea privatized the tobacco industry in 2002, but the price of tobacco has still been under the control of the government, not of KT&G, a private entity of state-run Korea Tobacco and Ginseng Corporation. KT&G is the sole domestic provider of tobacco in Korea.

Local tobacco prices are becoming an issue after the Ministry of Health and Welfare said last week that it will push hard to raise them, on the advice of the World Health Organization (WHO) to increase the tobacco tax by 50 percent. The advice of WHO, given to member countries that signed the Framework Convention Alliance for Tobacco Control on World No Tobacco Day on May 31, is based on the inverse relationship between the price of tobacco and the prevalence of cigarette smoking.

The percentage of Korean men who smoke was 46.8 percent in 2011, among the highest in OECD countries, according to the Korea Institute of Public Finance.

Currently, 1,550 won out of the 2,500 won retail price for a pack of cigarettes in Korea is made up of tax. If the tax is raised by 50 percent, the price of cigarettes would be raised by 775 won to 3,275 won.

The Welfare Ministry said it will try to revise the law to raise the tobacco price by early next year.

BY MOON GWANG-LIP [joe@joongang.co.kr]