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KT&G sowing seeds of diseases

25 September 2020

Chasing the world’s top three transnational tobacco companies – Philip Morris International, British American Tobacco and Japan Tobacco International – is world’s No.7 Korean tobacco company, KT&G, seeking to expand its sales globally.

Founded in 1987, Korea Tomorrow & Global Corporation (formerly known as Korea Tobacco & Ginseng) raked up almost USD 4.1 billion net sales in 2019. Its top selling brand, Esse, which specifically targets women, is sold widely in many countries. It sells other cigarette brands such as PINE, The One, Indigo, Arirang, This, This Plus, Zest, Raison, and Lo Crux. KT&G was previously established as a government-controlled monopoly until it was privatized in 2002.

In its home market in the Republic of Korea, KT&G dominates cigarette sales controlling over 63% of the market share. But its home sales are declining and it needs to increase international sales particularly in low-and-middle income countries. It is currently boosting its sales in 85 countries, especially in Indonesia, Turkey, Russia and Iran. In 2011, KT&G bought controlling shares in Trisakti, Indonesia’s sixth largest tobacco company.

Though Republic of Korea ratified the WHO Framework Convention on Tobacco Control in 2005, and made progress in strengthening regulations, such as applying prominent pictorial health warnings on tobacco packs, they still lack measures that strictly ban tobacco advertising, promotions, and sponsorships (Article 13).

The prevalence of smoking among Koreans is approximately 49.8% for adult males and 4.2% among adult females, while among adolescent boys estimation is at 9.6% and 2.7% among adolescent girls. More than 25,000 children (10-14 years old) use tobacco each day.

There are many contributing factors for such high prevalence, including the historically low cost of cigarettes, the relatively few tobacco control initiatives and legislations, and social factors that normalize smoking such as advertising and promotions that target women and teens specifically.

KT&G continues to influence public health policymaking through its active lobbying efforts and corporate social responsibility activities. Since 2003, KT&G’s corporate social responsibility arm, KT&G Welfare Foundation, conducts its so-called “public interest projects” and provide “welfare services” among senior citizens, students, children, and immigrants.

In September 2020, KT&G publicized its Social Contribution Report “KT&G S-Report”, which brags about the company’s so-called CSR activities framed under a feel-good sounding theme of “hope, coexistence, and creativity”. According to the report, KT&G’s total CSR contribution in 2019 was KRW 101 billion (USD 86 million) or 3.4% of its sales. What KT&G does not reveal is how much it spent promoting its sales or on lobbying against stringent tobacco control measures.

The report also boasted about the commendations it received from government ministries the past year which is in clear contravention of FCTC’s Article 5.3, and existing efforts related to Covid-19.

The report failed to account the cost of Korea’s tobacco epidemic on its people. According to TobaccoAtlas, every year, more than 71,300 Koreans die due to tobacco-related diseases.

There is already a growing body of evidence to support the WHO’s position that smokers are at higher risk of developing severe diseases and death with Covid-19, which makes smokers among those who are especially vulnerable to contracting the virus. This is a good time to denormalize tobacco related CSR activities by banning them and all other tobacco advertising, promotions and sponsorship.