Three major foreign cigarette producers in Korea have yielded some of their market share to Korean brand KT&G, following their hike of prices for their products.
According to cigarette industry data, the three players ― Philip Morris, British American Tobacco and Japan Tobacco International ― posted 35.3 percent in combined market share in January, down from 40.4 percent from a year before.
Philip Morris reported a drop from 22.7 percent in January 2012 to 19.3 percent in January 2013. The shares of BAT and JTI stood at 9.8 percent (10.7 percent a year earlier) and 6.2 percent (6.3 percent a year earlier), respectively.
Their yearly market share also continued to slide ― 42.2 percent in 2010, 40.8 percent in 2011 and 38.1 percent in 2012.
Meanwhile, KT&G captured 64.7 percent of the market last month, up 4.3 percentage points from a year before. Its yearly share climbed from 57.8 percent in 2010 to 59.2 percent in 2011, and again to 61.9 percent in 2012.
BAT had taken the initiative in price hikes. It raised the prices of its main products ― Dunhill, Kent and Vogue ― to 2,700 won ($2.50) per pack, from 2,500 won in April 2011.
The 8 percent price hike marked the first in six years for the firm.
“We have been making every effort to boost productivity and cut costs. Yet, with the recent hike of raw material costs, it was inevitable that we would change the cigarette price,” BAT Korea had said in a statement.
Philip Morris and JTI also raised the prices of their flagship products such as Marlboro, Parliament and Mild Seven each by 200 won between April 2011 and February 2012.
But they had to lower the prices of some products less than a year after a controversial markup that triggered a plunge in sales and a customer migration to KT&G, which has kept the prices of products such as Esse untouched.
By Kim Yon-se (
kys@heraldcorp.com)
