The government said Friday it will impose fines of up to 50 million won (US$48,262) on those who hoard cigarettes in a bid to stabilize the market following its decision this week to hike tobacco prices.
The penalty will go into effect as of noon Friday, according to the Ministry of Strategy and Finance. The government announced on Thursday that it plans to raise the price of cigarettes by 2,000 won per pack, an 80 percent increase, a move it said is aimed at lowering the country's smoking rate that is one of the highest among advanced countries.
"We made this decision to prevent market disruptions amid worries that cigarettes could be in short supply after the government's move to hike tobacco prices," the ministry said in a press release.
The penalty is aimed at tobacco manufacturers and importers unloading cigarettes onto the market in excessive quantities and retailers hoarding them to maximize their profits. Individual consumers are not subject to the penalty, the ministry said.
The ceilings on the market unloading and purchase by manufacturers and retailers are set at 104 percent of their averages in the January-August period.
Those who violate the rule could face up to two years in prison or a maximum fine of 50 million won. The penalty will remain in place until the tobacco prices are increased, the ministry said.
The ministry added that it will cooperate with other relevant authorities including the National Tax Service and the Fair Trade Commission, if necessary, to stabilize the tobacco market going forward.
The move is intended to help stabilize consumer prices amid worries that a sharp price hike in tobacco prices could add upward inflationary pressure.
Experts say that a 2,000-won price hike, which requires parliamentary approval, could result in a rise in consumer prices of 0.62 percentage point. A pack of cigarettes cost an average 2,500 won in South Korea.
The smoking rate for South Korean males currently stands at about 44 percent, much higher than the average of 25 percent for the member countries of the Organization for Economic Cooperation and Development. (Yonhap)
