The South Korean government announced Thursday it plans to nearly double cigarette prices starting in January as part of efforts to cut the country's high smoking rate that will also include a ban on tobacco advertisements by large retailers.
"The government will seek to raise cigarette prices by 2,000 won (US$1.93) per pack at the start of next year while also introducing a pricing system where cigarette prices will be pegged to other consumer prices," Health and Welfare Minister Moon Hyung-pyo said.
The move was reported at an economic ministers' meeting that followed consultations with the ruling Saenuri Party earlier in the day. The proposed price increase will require law revisions that must be approved by the parliament.
The plan may undergo changes during parliamentary review as many politicians, including ruling party lawmakers, have already expressed their opposition against such a large price increase.
Shortly after the government-ruling party consultations, the main opposition New Politics Alliance for Democracy labeled the price hike a "deceitful move" aimed at filling the revenue shortfall by emptying the pockets of those in the low income bracket, whose smoking rate is higher than among other income groups.
A 2,000-won hike will mark an 80 percent increase from the current average price of 2,500 won per pack.
In further efforts to bring down the smoking population, the government will require all cigarette manufacturers to print picture-based warnings on tobacco products and prohibit promotions and advertisements of tobacco by manufacturers and retailers, including convenient stores, the ministry said.
The last price hike for cigarettes was in 2004 when it was raised by 500 won.
Moon said the proposed price hike will help significantly reduce the country's smoking rate, noting that the last price hike helped cut the smoking rate by 15 percent.
"The government will work to lower the smoking rate of adult males to 29 percent by 2020," he said. The health ministry's data show that the smoking rate for South Korean males is currently around 44 percent, above the average 25 percent for the 34 member countries of the Organization for Economic Cooperation and Development.
The ministry said the proposed price hike was expected to lead to a 34 percent drop in overall sales of tobacco products, and that the price hike, coming mostly from a tax increase, will likely generate an additional 2.8 trillion won in tax revenues.
