[Editorial] Cigarette prices

Korea’s antismoking policy is one of the weakest among members of the Organization for Economic Cooperation and Development, a recent report indicated, giving weight to calls for higher cigarette prices to cut the country’s smoking rate. According to the report released by the Korea Institute for Health and Social Affairs, a state-funded think tank, Korea ranked 24th out of 25 major industrialized nations in terms of the effectiveness of their antismoking measures.

It is a natural result that the country has retained the second-highest smoking rate in the 34-member OECD. Data from the World Health Organization showed that 40.8 percent of Korean men aged 15 or older smoked in 2010, far above the OECD average of 25.9 percent. Corresponding figures remained at 16.7 percent for the U.S., 16.4 percent for Australia and 32.2 percent for Japan.

A large part of the weakness in Korea’s antismoking policy comes from its low cigarette prices. Since the last increase in 2004, the tobacco price in the country has remained at an average 2,500 won ($2.20) per pack, the lowest among all OECD members. Figures compiled by the Health and Welfare Ministry put the comparable price in 2010 at 15,758 won for Norway, 12,761 won for Australia, 6,777 won for the U.S. and 4,111 won for Japan.

Though at a slight pace, Koreans have gradually reduced spending on cigarettes in recent years, probably reflecting their prolonged financial difficulties and heightened health concerns. But the past week was an exceptional period, seeing tobacco sales increasing by double digits at retail shops across the country. What prompted the buying spree was the submission of a bill by a dozen lawmakers earlier this month, which is aimed at nearly doubling the average price of cigarettes to 4,500 won per pack. The move has since caused a heated debate on the pros and cons of the proposed measure.

Proponents say price hikes would reduce smoking and thus enhance public health, while still increasing the tax revenue from tobacco sales. Skeptics claim that there is less correlation than generally believed between smoking rates and cigarette prices, arguing the burden would fall most heavily on the shoulders of the poor.

A larger number of legislators from both the ruling and opposition parties appear to be sitting on the fence, gauging the possible impact that the passage of the bill would have on their prospects in future elections. Cigarette price increases are certainly “not a politically popular item,” as noted by new Health Minister Chin Young, who formerly served as chief policymaker of the ruling Saenuri Party. It may be understood that politicians are sensitive to the possibility of a tobacco price hike causing a backlash from voters with the habit of smoking.

Such a reluctant attitude, however, is too far removed from the urgent need to reduce the country’s smoking rate as much as possible. A brake should be put particularly on the continuous increase in the number of teenage and female smokers, which contrasts with the gradual decrease in smoking by adult men. It should be recalled that the 2004 price hike by 500 won, according to a study by the Health Ministry, led to nearly a third of teenage smokers quitting.

Many smokers may also be ambivalent, being displeased with higher cigarette prices but still willing to use them as an occasion to stop smoking. Enhanced public health ensuing reduced smoking would help save medical costs that would otherwise have been spent on treating smoking-related diseases.

The additional revenue ― experts forecast that raising the average cigarette price by 2,000 won would lead to collecting 5 trillion won more in tax ― could also be used to help finance health care and other benefit programs.

What lawmakers and government policymakers should avoid is to settle for a slight price hike designed to maximize tax revenues that will have little impact on smoking rates. The price needs to be raised high enough to push a significant number of smokers to kick the habit.