Chinese Tourists’ Demand for Korean Tobacco Prompts Delays in Price Increases

The Korean government has postponed its plan to increase cigarette prices in tax-free stores, due to an increase in demand from Chinese tourists for Korean cigarettes, and a decrease in hoarding sprees that started with the cigarette price hike, according to an individual related to the Ministry of Strategy and Finance (MOSF) on March 5.

A carton of cigarettes sells for around 19,000 won (US$ 17) in tax-free stores in Korea, and 45,000 won (US$ 40) on the open market, which has led Korean smokers to turn towards tax-free stores for their tobacco needs. In response, the Korean government planned to increase cigarette prices in tax-free stores by 9,000 won (US$ 8).


However, Chinese tourists are increasingly looking for domestic cigarettes during their time in Korea. According to a report issued by Korean convenient store franchise CU, cigarettes were the fifth most-popular item on Chinese customers’ shopping list among 30 CU stores at tourist spots in Korea, from February 16 to 22.

The MOSF source said that the government will continue to monitor changes in cigarette prices at Chinese tax-free stores, and set Korean prices accordingly. The Korean government has collected 930.8 billion won (US$ 844 million) in cigarette taxes during January and February, for an increase of 110.6 billion won (US$ 100 million) compared to the same period in 2014.



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