KT&G Vice President to Adjust E-Cigarette Profit Margin

Oct.09.2024
KT&G Vice President to Adjust E-Cigarette Profit Margin
KT&G vice president vows profit adjustment for e-cigarette devices at governmental meeting, seeking fair collaboration with store owners.

According to a report by N News on October 8, at a national policy inspection meeting in Seoul targeting the Ministry of SMEs and other agencies, vice president of South Korean tobacco company KT&G, Do Hak-young, stated during questioning by Democratic Party lawmaker Oh Se-hee that they will adjust the profit margin of e-cigarette devices to seek a way to coexist with store owners.


According to reports, KT&G currently holds the top position in the e-cigarette device market with a 72% market share. Since entering the market in November 2017, the company has maintained its leading position for seven consecutive years.


Senator Oh Se-hee pointed out that KT&G's market leading position is thanks to the support of 55,000 convenience stores nationwide. However, in recent years, there have been unfair practices in the transactions with convenience stores due to a lack of a win-win cooperation.


According to the Tobacco Industry Act, e-cigarette devices are classified as non-tobacco products and are sold with a 6.1% profit margin, while also bearing the credit card processing fees. They are not tobacco but rather small grocery items, and the profit margin needs to be adjusted.


The lawmaker further explained that KT&G's main purpose in promoting e-cigarette devices in convenience stores is to increase tobacco sales, despite lower profits, as it effectively attracts customers into the stores. Since 2018, convenience store owners have been calling for improvements in unfair trading practices, but have not seen any progress.


He urged KT&G to develop a win-win solution.


In response, Dou Xuerong stated that KT&G is considering actively adjusting its profit margin to achieve a more fair and reasonable cooperative relationship.


Notice

1. This article is provided exclusively for professional research purposes related to industry, technology and policy. Any reference to brands or products is made solely for the purpose of objective description and does not constitute an endorsement, recommendation, or promotion of any brand or product.

2. The use of nicotine products, including but not limited to cigarettes, e-cigarettes, and heated tobacco products, is associated with significant health risks. Users are required to comply with all relevant laws and regulations in their respective jurisdictions.

3. This article is strictly restricted from being accessed or viewed by individuals under the legal age.

Copyright

This article is either an original work by 2Firsts or a reproduction from third-party sources with the original source clearly indicated. The copyright and usage rights of this article belong to 2Firsts or the original source. Unauthorized reproduction, distribution, or any other unauthorized use of this article by any entity or individual is strictly prohibited. Violators will be held legally responsible. For copyright-related matters, please contact: info@2firsts.com

AI Assistance Disclaimer

This article may have utilized AI to enhance translation and editing efficiency. However, due to technical limitations, errors may occur. Readers are advised to refer to the sources provided for more accurate information.

This article should not be used as a basis for any investment decisions or advice, and 2Firsts assumes no direct or indirect liability for any errors in the content.