[Newsmaker] Seoul steps back on plan to raise tobacco price

South Korean health authorities have backtracked on a plan to raise tobacco prices to match the average levels of Organization for Economic Cooperation and Development countries, denying reports that it would hike up cigarette prices to 8,000 won a pack.

In a set of plans unveiled on Wednesday, the Health Ministry said it would increase its health promotion levy on tobacco over the next 10 years to raise its price to the average level of OECD countries.

The average retail price of a pack of cigarettes in OECD countries is $7.36, or about 8,137 won, according to the World Health Organization. In Korea, it is sold at 4,500 won, or about $4.

A day later, the ministry backed down on their plan.

While the government has plans to raise the levy over the next 10 years as there is a related bill pending in the National Assembly, Lee Seu-ran, the ministry’s director of health policy, said Thursday they had not decided on an exact timeline, nor how much they would raise it by.

Prime Minister Chung Sye-kyun also denied news reports that the government is planning to raise the price of cigarettes to 8,000 won per pack and impose the health promotion levy on alcohol as well.

“As tobacco and alcohol are items consumed by many Koreans, we need sufficient research and reviews on various issues such as pricing, and also careful discussions. (The price hike) cannot be pushed over a short period of time,” Chung wrote on Facebook on Thursday.

“It is regrettable that news reports continue to spread despite the Health Ministry’s official reply, causing confusion.”

Chung’s office said he has instructed the ministry to fully communicate with the press so that “unnecessary controversy” over tobacco and alcohol prices do not spread further.

On Wednesday, the ministry had said the timing and the extent of the hike required further discussion. After seeing a backlash from the public in response to the price hike, however, the ministry stressed that the schedule has not yet been determined.

As for implementing the health promotion levy on alcohol, the ministry said it needs to study the possible effects based on cases from other countries, and that it plans to have further discussions with different stakeholders.

By Kim So-hyun (sophie@heraldcorp.com)