[THE INVESTOR] Despite the raise in conventional tobacco taxes in 2015 and a consequent drop in sales, profits reaped by the manufacturers have soared in the past two years, government data showed.
The sharp increase is driven by consumers switching to e-cigarettes which are exempted from higher taxes, according to some industry watchers.
The government increased taxes on cigarettes by 2,000 won ($1.70) per pack from Jan. 1, 2015, raising the price to 4,500 won per pack, and made it mandatory for tobacco companies to place graphic images on packages showing the harmful effects of smoking in 2016.
Meanwhile, imports of electronic cigarette liquids reached 243 tons or 16 billion won between January 2015 and August this year, according to the statistics by the Korea Customs Service. Imports of vape kits increased to 269 tons, or 25.6 billion won, up 55.5 percent from 173 tons between 2012 and 2014.