Japan Council Slashes Leaf Cultivation

The Leaf Tobacco Deliberative Council, chaired by Yoshitsugu Minagawa, decided to reduce the total tobacco cultivation area based on a survey of each Japanese leaf tobacco growers’ willingness to cultivate for the 2022 leaf tobacco sales contract. The decision was based on the council’s approval of a proposal submitted by Japan Tobacco.

In the Japanese domestic tobacco business, the total demand has continued to decline in recent years due to structural factors, such as the fall in adult population and the aging of society as well as tighter smoking-related regulations. In addition, there have been rapid changes in the market over the past few years, such as the expansion and intensifying competition of the heated-tobacco and the value segment cigarette categories.

JT’s sales volume has continued to decline following the decline of total demand, despite efforts to strengthen the company’s top line through the growth of its heated-tobacco category and increasing the share of cigarettes.

In light of these circumstances, JT made the proposal to reduce the total tobacco cultivation area with the aim to secure a balance of supply and demand over the mid-term and long-term and to rebuild a stable and sustainable structure to produce and procure domestic leaf tobacco.

Specifically, JT will ask each Japanese leaf tobacco grower if they would like to cease tobacco cultivation. JT will summarize each grower’s intent on next year’s tobacco cultivation upon consultation and in cooperation with the growers’ unions. Based on the survey results, JT will then submit its proposal on tobacco cultivation areas and leaf prices for 2022 to the next Leaf Tobacco Deliberative Council scheduled for autumn.