It appears that the decision of the authorities to impose steep price hikes on cigarettes in South Korea was not such an effective anti-smoking measure after all, since after the initial plummeting in sales, tobacco consumers seem to be slowly but steadily returning to the purchasing of cigarettes, putting down their resistance and breaking their resolutions to quit smoking.
The increased prices had a dramatic effect on the sales volumes of tobacco during the first week of January, bringing about a 81% dropped when compared to the same period last year. However, in the following weeks the drop has subsided gradually and in the fourth week of January the drop was contained to 57%, indicating that after the initial shock, sales are now gradually picking up.
This change is evident also in the sales made by convenience stores, which saw a drop of 42% in the first week of January, shrinking to a drop of 36% in the fourth week of January. Moreover, the recovery of cigarette sales is also reinforced by the simultaneous faltering of the sales of non-smoking aids, which had originally recorded a 30 times increase since the beginning of the year. For example, e-cigarettes sales increased 22 times in the first week and 33 times in the second week of January year on year, but this increase dropped in the third and fourth weeks.
Besides indicating that smokers who had originally decided to try to cut back or quit due to the higher prices have now changed their mind and returned to the habit, the recovery in tobacco sales might also mean that those who had hoarded big quantities of cigarettes before the price hike are now running out of stock and are forced to buy again, despite the fact that cigarettes are no longer cheap.
The anticipation in the Korean retail industry is that tobacco sales volumes will eventually recover to a great extend but that this will take some time to occur, longer that during previous tobacco price hikes, because this time round the increase in price was steeper and the drop in sales more dramatic.