British American Tobacco on Monday officially launched its synthetic nicotine-based liquid e-cigarette, Nomad Sync 5000, in South Korea, the first market in the world to release the product.
The Nomad Sync 5000, available in sweet “Purple” and refreshing “Cold” flavors, offers up to 5,000 puffs with a liquid capacity of 10 milliliters and a nicotine concentration of 0.9 percent. Priced at around 17,000 won ($12), the product is now available at vape shops nationwide.
BAT Rothmans, the company’s Korean subsidiary, attributed the product’s Korean debut to the country’s regulatory framework, according to media reports.
“South Korea is the only OECD country where synthetic nicotine products are governed separately from natural nicotine products,” a BAT Rothmans official said. “This unique distinction provides a favorable environment for innovation and allows us to responsibly introduce products that meet high industry standards.”
Under Korea’s current tobacco laws, only products derived from tobacco leaves are classified as tobacco, leaving synthetic nicotine products exempt from taxes, health warning labels, advertising restrictions, and sales restrictions to minors.
Despite this regulatory gap, BAT Rothmans emphasized its voluntary compliance with local standards, including displaying health warnings and ensuring branding avoids youth appeal.
KT&G has expanded its Sin Tanjin next-generation product (NGP) factory to establish an innovation hub for electronic cigarette production.
During a ceremony celebrating growth the attended by CEO Baek Bok-in and over 40 employees, the company pledged to nurture its NGP segment into a leading business.
The South Korean tobacco company has installed three additional electronic cigarette stick production lines this year, bringing the total number to eight. It also established an automated warehouse capable of storing up to 360,000 boxes.
KT&G plans to further expand its production innovation hubs, focusing on domestic manufacturing facilities such as Sin Tanjin and Gwangju, to ensure a smooth response to the rapidly growing demand for its NGP products.
The expansion of the Sin Tanjin NGP factory is part of KT&G’s investment plan that was announced during the “Future Vision Proclamation” in January.
During that event, KT&G announced its strategy would focus on e-cigarettes, heated tobacco and the international expansion of its combustible cigarette business. The company intends to increase the revenue share of its noncombustible products to more than 60 percent by 2027 through investments and innovation.
The Sin Tanjin NGP factory will play a role as a growth engine that enhances the essential competitiveness of the NGP business, which is strengthening its market leadership.
In September, KT&G announced the construction of a new factory in Indonesia, which will be manufacturing for exports. In October, it broke ground for a new factory in Kazakhstan, establishing a foothold in Eurasia.
“The Sin Tanjin NGP factory will play a role as a growth engine that enhances the essential competitiveness of the NGP business, which is strengthening its market leadership,” said KT&G Baek in a statement.
“In the future, we will lead the growth of the NGP business based on innovative technology and advanced global partnerships and will leap to the ‘global top-tier’ through domestic innovative growth investments, including expanding production infrastructure.”
E-cigarette companies have been evading taxes by declaring false nicotine content when importing liquid nicotine base into South Korea, according to one of the country’s lawmakers, reports The Pulse.
The accumulated tax evasion is estimated at several trillion won.
Between January 2020 and July 2023, 20,197 kg of liquid nicotine base was imported, according to documents from the Korea Electronic Liquid Association obtained by Lim Lee-ja of the ruling People Power Party. Approximately 3,300 bottles of e-liquid can be produced with 1 kg of liquid nicotine. Each bottle is levied at KRW53,970 ($40.60).
Many e-cigarette companies have been mis-declaring tobacco leaf nicotine as tobacco stem and root nicotine to evade taxes since 2016, according to the association. Under Korea’s tobacco laws, nicotine extracted from tobacco stems and roots is not classified as tobacco.
Data shows that e-cigarette companies changed their declarations from tobacco leaf nicotine to synthetic nicotine when Korea’s Individual Consumption Tax Act was amended in 2021 to impose taxes on all tobacco-derived nicotine. Synthetic nicotine is classified as a simple commodity and not subject to taxes.
The association stated that annual distribution volume of Korean e-cigarette liquid is 30 million 30 mL bottles, with an estimated annual tax evasion of KRW1.6 trillion.
In 2019, the Board of Audit and Inspection audited the Korea Customs Service, the Ministry of Environment and the Ministry of Health and Welfare, showing that all the inspected imported nicotine was tobacco leaf nicotine. Falsified declarations have continued since then, according to the association.
Lim has called on the government to crack down on companies falsely declaring their products.
Liquid nicotine base is considered a hazardous substance under the Chemical Substance Control Act, regulated by the Ministry of Environment. Imports must be reported to the minister of environment, and companies must obtain an import declaration certificate for hazardous substances.
Those caught failing to report or falsely reporting the import of hazardous substances are subject to up to one year of imprisonment and up to KRW30 million in fines. None of the companies shown to have falsely declared nicotine products in past audits have been punished to date.
For 15 years, Haka Korea has been making innovative strides in the fast-growing global vaping market.
By Timothy S. Donahue
E-cigarettes are a less risky way to use nicotine. If they were more harmful than combustible tobacco products, the U.S. Food and Drug Administration would not have authorized 23 vaping products for sale. Likewise, the U.K. would not be promoting vaping products as tools to help cigarette smokers quit if they were not less harmful than traditional cigarettes. E-cigarettes and other vaping products are tools for harm reduction, and there’s plenty of research to confirm this.
According to a Statista survey conducted in South Korea in 2021, around 33 percent of men smoked cigarettes. However, cigarette use in the country has steadily declined. This can mostly be attributed to the rise of e-cigarettes and other less risky products, such as heated-tobacco devices, taking a more prominent place in the market. In 2020, KAMJE, the journal of the Korean Medical Association, published an article citing medical experts advocating for wider availability and softer regulations regarding e-cigarette use because of vaping’s potential to help smokers quit or switch to less risky products.
“There is an ongoing debate within the public health community about e-cigarettes on whether they have a potential role in smoking cessation. ‘Quit or die’ is no longer the only option for those who cannot quit,” the article states. “Safer nicotine products offer another way. There is substantial international and independent evidence that these products are safer than cigarettes.”
Haka Korea was founded in 2013 and has been widely recognized in the vaping industry for its advancements in technology and consumer-orientated services. Haka leadership said the company strives to improve the lives of both smokers and nonsmokers, and it endeavors to offer the best products and services with its customer-focused approach. However, the Korean market presents its challenges.
“Right now, the Korean e-cigarette market lacks a concrete regulatory framework. Furthermore, taxes imposed on the product are incredibly high. It’s an unbalanced system,” said a Haka representative. “These laws and rules are handled by different governmental departments, leading to difficulties in implementation. Additionally, taxes must be paid in a variety of ways, making it hard to manage.
“Given that there is no powerful group yet spearheading this cause, it will be a challenge to change preexisting laws to fit current circumstances. Nevertheless, our team believes that if these laws can be modified and adjusted through sustained struggle, the possibilities for growth in the e-cigarette sector in Korea would be massive, and competition could be sustained. It won’t be easy, but we think it’s worth taking on.”
Haka is focused on providing safe and reliable products and services. The company works at these goals in a socially responsible manner and is dedicated to developing and maintaining ethical standards, according to the representative. Haka products have been tested and certified by several regulatory bodies in several countries, including the European Union.
In 2016, Haka Korea was honored with the Product Safety Commendation by the Korea Standards Association, a branch of the Korean government. The commendation served as confirmation of the product’s safety, according to Haka’s spokesperson.
During the following years until 2023, Haka has been awarded the Best Brand Award Selected by Consumers at an event co-hosted by the newspaper JoongAng Ilbo and Forbes Korea. The awards were sponsored by Korea’s Ministry of Science, ICT and Future Planning and the Ministry of Trade, Industry and Energy.
Haka has made several industry advances. For example, the company has been granted a patent for an adaptable charger that is compatible with mobile phone chargers. After introducing Haka Premium in 2013, it sold over 2 million units and became legendary among early e-cigarette users in Korea.
During the vaping sector’s early years, which were plagued by defective devices, the company also implemented one of the industry’s first warranty programs to guarantee customer satisfaction. In 2013, the company also found fame in the development of its micro five-pin charging method. It has also excelled at creating several safety protocols, better batteries and two safety protection circuits that are installed on all of Haka’s hardware.
“In 2015, we registered our most groundbreaking product yet—an automatic system that was powered by minuscule currents from the human body without the need for buttons. This caused quite a stir within the industry. Haka Korea strives to continue innovating and researching new concepts,” the Haka representative said. “Despite being one of the leading domestic electronic cigarettes on the market, external pressure due to regulations has been mounting. Nevertheless, we did not give up and released the CSV pod system, known as Haka Signature, in 2019, setting ourselves up for a new successful leap forward.”
Haka is taking a proactive approach to protect the health of smokers who have quit combustibles using its products. For instance, Haka Korea has implemented a “no smoking” policy in all its stores, which prohibits the use of any tobacco-based or nicotine-based products. Haka Korea also offers a wide range of smokeless tobacco products, such as heat-not-burn devices, to provide customers with options that are less harmful than traditional smoking.
In addition, Haka Korea provides information and resources to its customers on the potential health risks associated with smoking. “Haka Korea provides quality customer service and strives to create a safe and comfortable shopping experience for all customers. Haka Korea has established a customer service center to assist customers with any queries related to the company’s products and services,” explains the spokesperson. “In addition, Haka has created a website that allows customers to easily find information about products and services as well as to place orders online.”
Haka has applied for and registered over 30 patents in areas such as trademarks, designs and technology. Furthermore, they have received several mandated certifications, such as CE (European Commission certification), RoHS (Restriction of Hazardous Substances Directive), KC (South Korean standards) and SGS (South Korean Assessment, Auditing and Certification).
To comply with various regulations globally, the company works to ensure that all authorized retailers of Haka products comply with domestic laws and regulations and are effectively managed. In addition, Haka has established an authorized retailer training program to ensure that staff are knowledgeable about the company’s products and services.
Haka says it is making great strides to expand its presence in the domestic electronic cigarette market. Currently, Haka Korea has 50 directly managed stores located nationwide, and the company plans to open more than 100 directly managed stores by 2023. In addition, Haka Korea is actively working to increase its presence in the online market, with plans to launch an online marketplace for its products soon.
There are currently over 700,000 former smokers using Haka Signature, according to company data, and more than 3 million products have been sold. The company states that more than 50 million pods have been produced, and those numbers keep growing day by day.
Haka saw the opportunity in the Korean pod vape market and teamed up with FEELM, a leading closed-pod atomization company, to produce Haka Signature—a closed pod system powered by FEELM’s innovative ceramic coil heating technology. Retailers said after the release that Haka Signature’s space-like design helped it stand out from the competition, differentiating itself from most conventional USB drive-like and cig-a-like products on the market. Closed pod system products account for over 90 percent of total revenues for Haka.
Haka decided to collaborate with FEELM by introducing Signature’s ceramic coil vape pod to the Korean market for the first time. Not only did this solve several familiar complaints from e-cigarette users (e.g., spitback and burnt taste), but it also reduced the leakage rate to an unprecedented 5 percent, which is far lower than the cotton coils used in competitive products, according to FEELM data.
Moving forward, Haka leadership intends to continue making significant strides in research and development to create products dedicated to health. The company is investigating different facets of the healthcare industry and brainstorming progressive solutions that it could potentially offer to not only its current clients but to the broader global market. In the end, Haka Korea hopes to establish continuous growth.
“This shift toward healthcare-focused brands shows our dedication to spreading the message of healthier choices. It is a lofty goal, but with our proficiency, commitment to introducing new ideas and focus on quality, we feel prepared to bring this vision into fruition,” the Haka representative said. “Ultimately, Haka Korea’s long-term ambition is consistent growth within both the e-cigarette and healthcare industries while providing excellent products and services for consumers.
“We wish to assist those who want to quit smoking by giving them accessible options and helping people lead more healthy lives with a diversity of products. This expresses our dedication to establishing healthier lifestyles and choices among consumers. It’s an ambitious aim, but with our expertise, dedication to advancing the field and focus on quality, we know we can achieve it.”
In 2022, Vape Korea Expo was the first and largest e-cigarette exhibition in Korea. The event drew the attention of e-cigarette consumers worldwide. The Korean e-cigarette market has been growing faster than expected year over year, despite controversy and issues over the safety of vaping products and government regulation.
The event is scheduled to take place from July 21st to 23rd at KINTEX, one of Korea’s major exhibition venues.
Vape Korea Expo is returning for 2023 and expects to showcase the latest in vaping hardware, e-liquids, oils and accessories. The show combines B2C retail, commercial, and entertainment elements with a Trends Symposium and an E-Cigarette Art Exhibition, according to a press release.
There will also be a number of networking events including B2B buyer meetings and VIP receptions during the show.
“Vape Korea Expo provides a unique platform for Korean and international brands, manufacturers, distributors, retailers and e-cigarette consumers to meet and interact with each other,” the release states. “Korea Vape Show (KOVAS 2023) is gaining recognition as a paradise for vape enthusiasts, attracting the attention of the vape community centered around Northeast Asia.”
Registering in advance on the KOVAS 2023 website, www.koreavape.show, before 6:00 PM on July 20th, admission. For more detailed information and inquiries, please contact the Korea Vape Show (KOVAS 2023) office is free.
KT&G Corp. will launch new heat-not-burn products in South Korea to strengthen its electronic nicotine devices lineup, reports the Yonhap News Agency.
The South Korean cigarette manufacturer will release Lil Able and its premium version, Lil Able Premium, on Nov. 16.
KT&G’s third-quarter net profit jumped 29 percent from a year earlier on increased exports and a strong U.S. dollar. Currently, the company earns 90 percent of its sales from the cigarette business division and 10 percent from the heat-not-burn division.
The company has been stepping up efforts to increase sales in the noncigarette business division.
From January to September, net income climbed 21 percent to KRW1.06 trillion from KRW878.58 billion in the same period of last year.
On Nov. 4, the company announced a KRW350 billion share buyback to boost shareholder returns.
Sales of cigarettes in South Korea were flat from 2020 to 2021 but demand for electronic cigarettes rose amid the protracted pandemic, reports the Yonhap News Agency, citing data from the finance ministry.
South Korean smokers purchased 3.59 billion 20-cigarette packs in 2021, similar to the number logged the previous year, according to the Ministry of Economy and Finance.
Sales of traditional cigarettes fell 2 percent on-year to 3.15 billion packs last year, while those of heat-not-burn tobacco products rose 17.1 percent to 440 million packs.
Compared with 2014, however, cigarette sales declined 17.7 percent last year—a development the government attributed to rising prices and anti-smoking campaigns.
In January 2015, South Korea increased cigarette prices by 80 percent to KRW4,500 ($3.72). The next year, the government required tobacco companies to print graphic images depicting the harmful effects of smoking on the upper part of cigarette packs.
As of 2020, the smoking rate among Korean men aged 19 or older dropped to a record low of 34 percent, down 1.7 percentage points from a year earlier, according to the health ministry.
KT&G launched its heated tobacco product (HTP), lil SOLID 2.0, in four countries – Armenia and Serbia in Eastern Europe and Kazakhstan and Kyrgyzstan in Central Asia in the second quarter of this year. KT&G is now exporting the lil SOLID series to seven countries and plans to ship them to more countries in the near future.
Credit: KT&G
The latest version of the lil SOLID series the tobacco firm introduced in 2017, the lil SOLID 2.0 has an upgraded design and performance. Lil SOLID is an HTP used to smoke Fiit tobacco sticks, according to the Korea Times. The new version was launched first in the Korean market in January and customers praised the products product for the battery life offered and its induction heater system.
“Our product, lil, is gaining popularity in the export markets thanks to our collaboration with Philip Morris International,” Lim Wang-seop, head of KT&G NGP Business Division, said during a conference call held in February. “We originally set a goal of entering a single-digit number of countries this year, but we have changed it to the double digits.”
KT&G previously entered the overseas markets in August 2020, with Russia as the first export country for its very first lil SOLID product. One month later, the tobacco firm started selling the e-cigarette in Ukraine as well.
In the following month, KT&G also advanced into the Japanese market with lil HYBRID 2.0 and MIXX. The product was only available in Fukuoka and Miyagi first, but after the had gained popularity in just four months, KT&G decided to expand across the country.
Japan is globally the largest consumer of e-cigarettes and is a market where various products are vying for market share. Industry sources say that KT&G’s hybrid e-cigarette successfully differentiates itself from the existing products and has received positive feedback.
KT&G will launch its Lil Hybrid 2.0 system Miix in Japan on Oct. 26 through its partnership with Philip Morris International (PMI), reports The Korea Times.
Unlike in Russia and Ukraine, where KT&G released Lil Solid, the Japan will get a Lil Hybrid 2.0 and a dedicated Miix stick. The first products to be sold will be available in matte black, cobalt blue, prism white and metallic bronze.
Consumers can choose from three stick types: Miix Regular, Miix Ice and Miix Mix.
“We will continue to provide various options to consumers in overseas markets through continuous cooperation with PMI,” said Lim Wang-seop, head of KT&G’s next-generation product business division.
The Korean government said Wednesday that taxes on e-liquids will nearly double starting next year. The “health promotion tax” on nicotine solutions will be raised from the current WON525 (0.45 cents) to WON1,050 a milliliter, according to a story in the Korea Herald.
The changes to the national health promotion laws were approved by the Cabinet recently, according to the Ministry of Health and Welfare, which are set to come into effect Jan. 1, 2021.
Ministry officials said the revisions are intended to achieve a fairer taxation on varying types of tobacco products. Currently, the tax rate for e-cigarettes is only 43 percent of that for conventional cigarettes.
The ministry warns against the use of e-cigarettes or vaping products, citing global instances of lung injuries associated with their use. The first local case of a suspected illness linked to vaping was reported in October last year.
