Why nicotine pouches — the next-generation tobacco product — are absent from South Korea

As the government considers raising tobacco taxes and tightens its crackdown on synthetic-nicotine e-cigarettes, the tobacco industry faces growing pressure — and attention is turning to whether nicotine pouches, widely seen as a next-generation product, could soon make their domestic debut.

Global tobacco companies are rapidly expanding nicotine pouch sales overseas, industry sources said Friday. Philip Morris International's ZYN shipped 500 million pouches in the first quarter of this year, up 7 percent from the same period last year. Excluding the highly competitive Nordic market, shipments grew 42 percent year on year. The brand has been gaining market share especially fast in the United States.

KT&G Corp is also active in the European nicotine pouch market. Last year, it jointly acquired Another Snuss Factory — a Nordic company that holds the Loop brand, which commands a strong share in the Nordic market — together with US tobacco giant Altria. KT&G has since expanded Loop's distribution beyond the Nordic region into markets including the United Kingdom. BAT Rothmans, meanwhile, sells its Velo pouch, launched in 2018, across 49 countries.

A nicotine pouch is a small sachet designed to be placed inside the mouth, tucked between the lip and teeth, roughly the size of a fingertip. Nicotine is absorbed through the oral mucosa as the pouch comes into contact with saliva. Because no flame or heat is involved, the product produces no smoke or odor. When it first launched, the format drew attention as a next-generation tobacco alternative because it could be used in smoke-free spaces such as airplanes and subways.

The forerunner of the nicotine pouch is Sweden's snus. While snus contains tobacco in addition to nicotine, Sweden is well known for incorporating it into public health efforts to reduce smoking rates. A report by Smoke Free Sweden, a local public health advocacy group, states that "Sweden has achieved the EU's lowest smoking rate of 5.3 percent as a result of actively embracing alternative products such as snus, e-cigarettes and nicotine pouches."

The industry does not expect nicotine pouches to launch in South Korea anytime soon. The biggest obstacle is price. Under current law, nicotine pouches are taxed by weight, and one industry official said the effective tax rate is believed to be five to six times higher than on conventional cigarettes. Nicotine pouch products already imported and sold domestically are priced at around 30,000 won ($19) per pack.

Consumer unfamiliarity with the format is another barrier. "It is hard to know how much demand domestic consumers — who are accustomed to inhaling smoke — would show for nicotine pouches," another industry official said.

The domestic industry's focus has shifted toward liquid e-cigarettes. With synthetic nicotine now subject to regulation following an amendment to the Tobacco Business Act, companies with natural-nicotine products believe they have gained a competitive edge on both price and quality.

BAT Rothmans is currently the only company selling liquid e-cigarettes in South Korea, though Philip Morris has announced plans to launch its Veev device. There is also industry speculation that KT&G Corp could re-enter the liquid e-cigarette segment. The company launched its Lil Vapor liquid product in 2019 but halted sales after the government issued a usage advisory.