By Kang Seung-woo
Households spent 3.49 trillion won ($3.08 billion) on cigarettes and alcoholic drinks in the July-to-September period of 2010, accounting for 2.35 percent of the total consumer spending standing at 148.6 trillion won, according to the Bank of Korea and Statistics Korea.
The ratio of spending on the two items remained above 6 percent until the early 1980’s and it reached the 8 percent mark in the fourth quarter of 1985 to become one of the biggest expenditures among households.
That ratio was the fourth highest at the time behind food, clothing and shelter — the necessities of life — which accounted for 37.03 percent, 10.91 percent and 10.22 percent, respectively.
Despite rising household earnings and spending, they have fallen out of favor with people, landing at an all-time low record since the survey started in 1970, as the number of those who are interest in health has been sharply increasing.
Real spending on liquor and cigarettes which considers price fluctuation has posted negative figures for the seventh straight quarter since the first three months of last year, while the overall expenditure has been steadily climbing since the second quarter of 2009, helped by the economic recovery.
The nation’s output of soju and beer through September this year were 899,000 kiloliters and 1.39 million kiloliters apiece, down 4.1 percent and 1.8 percent from the previous year.
“The sales of cigarettes tend to plummet in the beginning of each year because people decide to quit smoking,” said an official of KT&G, the country’s largest tobacco manufacturer.
“In addition, concerns over health have prevented people from smoking as time goes by.”
However, unlike liquor and cigarettes, seen as bad for one’s health, spending on health care has been increasing.
Expenses for medical service and health topped the 10 trillion won mark for the first time in the third quarter with 10.06 trillion won and they accounted for a record high of 6.8 percent to the total household spending.
“Medical spending is currently growing given that people’s income and interest in health and longevity are increasing,” a BOK official said.