Philip Morris International and KT&G raise profit margin of convenience store HTP equipment to 7% in response to store owners' demands

Philip Morris International and KT&G raise profit margin of convenience store HTP equipment to 7% in response to store owners' demands

Philip Morris International and KT&G announced that they will increase the profit margin of "Lil" and "IQOS" sold in convenience stores to 7%, while the purchase price for consumers will remain unchanged. British American Tobacco and Japan Tobacco International's attitude is unclear.

According to Newsis on December 26, Korea Tobacco (KT&G) and Philip Morris Korea announced that they will increase the profit margin of convenience store owners when selling heated tobacco devices (HTP) in order to enhance the mutually beneficial relationship with the store owners, while the purchase price for consumers will remain unchanged, which means that the purchase price of these products will be reduced on the original basis.

According to a convenience store industry insider on the 26th, Korea Tobacco and Philip Morris Korea decided to increase the profit margin of its heated tobacco devices "Lil" and "IQOS" in convenience stores from the original 6% to 7%, while the purchase price for consumers will remain unchanged.

Previously, in the audit of the Small and Medium Venture Enterprise Committee of the National Assembly of South Korea, a member of parliament pointed out that the profit margin of heated tobacco devices for store owners was only 6%, while the profit margin of heated tobacco cartridges was as high as 9%. In response, KT&G Vice President Do Hak-young said that it will actively adjust the profit margin.

BAT Rothmans said it is still in the wait-and-see stage for profit margin adjustment. In addition, Japan Tobacco International Korea (JTI Korea) launched its e-cigarette product "Ploom" in October, but it is only sold in some regions.