Korea to open up tobacco industry to foreign interest
Seoul--Oct. 27--South Korea is proposing to deregulate its tobacco industry, currently monopolized by the state-run Korea Tobacco and Ginseng Corporation, to allow foreign companies to produce tobacco products in Korea, the Ministry of Finance and Economy
The ministry submitted the proposal to the ruling Millenium Democratic Party during a policy meeting held Friday.
Once the proposal gains approval by the party, the ministry will submit a new bill to the National Assembly for ratification within this year.
In line with its deregulation of the industry, it will also allow tobacco companies to decide on consumer prices of cigarettes independently.
"We hope the measures will contribute to strengthening competitiveness of the domestic tobacco industry as the monopoly by the state-run corporation is ineffective in boosting competition," said the ministry.
At the same time, the ministry ruled out financial assistance for domestic tobacco growers despite increased competition as such subsidies go against World Trade Organization regulations.
It is, however, expected to take a few years for foreign tobacco companies to actively participate in the market as it will take time to build a manufacturing base here, according to an official in charge of privatization of Korea Tobacco and Ginseng Corporation at the ministry.