KT&G joins race for bigger overseas market share

Korea’s KT&G is set to be the world’s No.5 transnational tobacco company. KT&G’s overseas sales of cigarettes this year are expected to overtake its domestic sales, partly because of increased exports and a huge decline in domestic sales following an 80 percent increase in cigarette prices. It’s now selling more than 500 billion sticks overseas. 

According to The Korea Herald, KT&G’s overseas cigarette sales have risen dramatically. They stood at 2.5 billion cigarettes in 1999, at 28.5 billion in 2005 and at 40.7 billion in 2012. The South Korean tobacco manufacturer now sells cigarettes in more than 50 countries in Southeast Asia, the Americas and Europe. South east Asian countries are “the new market.”

Its most well-known brand is Esse, a super slim cigarette which targets women and girls. 100 billion Esse sticks are sold overseas in nearly all the ASEAN countries (see attached). Green Apple and Pink Strawberry Esse can be bought in Lao PDR, while several variants of Esse, such as Change, One and Special Gold, are available in Thailand. This really stresses the need to ban flavouring in cigarettes and misleading descriptors on packs as recommended in FCTC Article 9 and 11 Guidelines. Canada has already banned flavouring in cigarettes and most recently Turkey banned them.

In 2011, the company acquired an Indonesian cigarette maker to expand its reach in Southeast Asia. Although the Indonesian acquisition was its most recent, it has 3,297 local employees, the largest number in an overseas facility. KT&G established plants in Turkey in 2008, in Iran in 2009 and production facilities in Russia in 2010, producing mostly Esse super-slim cigarettes.

KT&G changed its corporate name from Korean Tobacco & Ginseng to Korea, Tomorrow & Global, but its primary business is still in tobacco. While it sells a product that kills half its customers prematurely, it schizophrenically claims to practice ethical management to be a “transparent and righteous company”.