The Korea Herald

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[Editorial] Effective increase

By Korea Herald

Published : May 7, 2013 - 20:05

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Finance Ministry officials are said to be considering a measure to link cigarette price hikes to inflation rates. This consideration appears to have come from the need to compromise different views over whether and how much to increase tobacco prices. In our view, it is simply a bad idea that would be of no help in protecting public health.

The envisioned scheme, under which cigarette prices are supposed to rise by a smaller amount ― say, tens of won (cents) ― on more frequent occasions, would do little to reduce the country’s smoking rate, the second highest in the 34-member Organization for Economic Cooperation and Development. Data from the World Health Organization showed that 40.8 percent of Korean men aged 15 or older smoked in 2010, far above the OECD average of 25.9 percent.

Korea’s high smoking rate is attributed mainly to cheap tobacco prices. Since the last increase in 2004, cigarette prices have remained at an average 2,500 won ($2.20) per pack, the lowest in the developed world. Figures compiled by the Health and Welfare Ministry put the comparable price in 2010 at 15,758 won for Norway, 12,761 won for Australia, 6,777 won for the U.S. and 4,111 won for Japan.

The Finance Ministry is reportedly considering raising tobacco prices by up to 600 won on average to reflect inflation rates over the past eight years before beginning to increase them gradually on a yearly basis. But such a hike would still be insufficient to ensure an effective reduction in the smoking rate.

As this paper has noted, the price needs to be raised high enough to push a significant number of smokers to abandon the habit. What should be avoided is to settle for a slight price hike that might increase tax revenues but have little impact on the smoking rate. Whether intended or not, the ministry’s measure would exactly bring about such a result.

It can be understood that officials are worried about the inflationary pressure caused by a steep cigarette price increase and repercussions from low-income smokers. But such concerns do not cancel out the importance of protecting and enhancing public health.

More than 30,000 Koreans die of smoking-related diseases every year, costing 1.56 trillion won in medical costs. Including illnesses caused by indirect smoking, the treatment costs are estimated to swell to 10 trillion won, according to health experts.

It is regretful that parliamentary members are sitting on their hands, delaying the passage of a bill submitted by some legislators in March to nearly double the average price of cigarettes to 4,500 won per pack.

What government officials and lawmakers should do for low-income people is not to limit cigarette price hikes to help ease their financial burden but to relieve them of the risk of severe diseases by inducing them to quit smoking through pricing policies. They need to be reminded that many smokers are often ambivalent, being displeased with high cigarette prices but still willing to use them as an impetus to stop smoking.