According to a report from Newsis on December 26th, Korean Tobacco (KT&G) and Philip Morris International (PMI) Korea announced that they will increase the profit margin for convenience store owners selling heated tobacco products (HTP). This is aimed at strengthening mutual relationships with store owners, while keeping consumer purchase prices unchanged. This means that the wholesale prices of these products will be reduced from current levels.
According to industry sources from convenience stores on the 26th, the Korean Tobacco and Philip Morris International (PMI) Korea have decided to increase the profit margin of their heated tobacco devices "Lil" and "IQOS" from the original 6% to 7% in convenience stores. The purchase price for consumers will remain unchanged.
During an audit by the Small and Medium Risk Enterprise Committee of the National Assembly's Industry, Trade, and Resources Committee in South Korea, some lawmakers pointed out that the profit margin for store owners of heated tobacco devices is only 6%, while the profit margin for heated tobacco pods is as high as 9%. In response, Do Hak-young, the Vice President of KT&G, stated that they will proactively adjust the profit margin.
British American Tobacco Korea (BAT Rothmans) stated that they are still in a wait-and-see period regarding profit margin adjustments. In addition, Japan Tobacco International Korea (JTI Korea) launched its e-cigarette product "Ploom" in October, but it is only being sold in select regions.
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