Following yesterday’s (July 22) announcement that Japan Tobacco Inc. was acquiring the BREAK and Moro fine-cut tobacco brands from Scandinavian Tobacco Group, the company said the deal is intended to strengthen its combustible tobacco business and support its long-term growth strategy. JT said expanding its fine-cut portfolio in Western Europe will improve returns in its combustibles business, reinforce its position in a key market, and help fund continued investment in reduced-risk products. The company added that the acquisition reflects its disciplined capital allocation strategy and is not expected to have a material impact on its financial performance.
Tag: Japan Tobacco
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JTI Backs Philippines’ Market Stabilization Strategy
Japan Tobacco International (JTI) endorsed the NTA’s Strategic Tobacco Production Information Campaign (STRATPIC), which aims to align tobacco production with global demand and discourage oversupply ahead of the 2026-2027 planting season. JTI said the initiative will support the industry’s long-term sustainability by helping farmers avoid market disruptions, while emphasizing that data-driven planning, stakeholder collaboration, and a stable policy environment are essential to protecting farmer livelihoods and encouraging continued investment in the Philippine tobacco sector.
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JTI, Authorities Trying to Dent Malaysia’s Illicit Market
Japan Tobacco International said the illicit cigarette trade remains a major challenge in Malaysia, with counterfeit tax stamps and increasingly sophisticated cross-border smuggling operations complicating enforcement efforts. According to JTI Malaysia, the share of illicit cigarettes carrying counterfeit Malaysian tax stamps rose from 8.7% in 2023 to 16% in January 2026, the highest level recorded. The company cited a recent enforcement operation in the Philippines that uncovered counterfeit Malaysian tax stamps allegedly intended for the Malaysian market.
JTIM estimated the country’s illicit cigarette incidence rate at 56.7%, representing roughly RM4 billion ($1 billion) in lost government revenue. Company executives said affordability remains a key driver of illicit trade, warning that rising logistics costs, raw material inflation, and potential excise tax increases could widen the price gap between legal and illicit products. The company also pointed to growing consumer migration toward alternative nicotine products such as vapes, which currently face lower taxation levels than cigarettes.
JTIM said policymakers are evaluating stronger deterrence measures, including digital tax stamps designed to improve supply-chain tracking and real-time product authentication. The company also called for a more balanced tax framework across nicotine categories, advocating for vape taxation to align more closely with heated tobacco products rather than combustible cigarettes.
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Malaysia’s Illicit Cigarette Market at ‘Critical Stage’
Malaysia’s illicit cigarette market is approaching a “critical stage,” with illegal products now accounting for roughly 50% of total consumption, according to industry representatives. Philip Morris International and Japan Tobacco International executives said the country’s illicit rate is among the highest in the region, far exceeding levels in markets such as Singapore and Thailand, and warned that widespread availability has normalized illegal purchasing among consumers.
Industry speakers linked the surge to a sharp excise tax increase in 2015, which widened the price gap between legal and illicit products and drove illegal market share to as high as 63% at its peak. Officials and stakeholders emphasized that addressing the issue will require a coordinated approach combining stronger enforcement, policy adjustments and greater public cooperation, as smuggling networks continue to adapt and exploit regulatory gaps.
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JTI Reports Revenue Up 15%
Japan Tobacco Inc. reported first-quarter 2026 revenue of JPY 924 billion ($5.9 billion), up 15.2% year-over-year, with operating profit rising 24.7% to JPY 304.6 billion ($1.9 billion), supported by pricing, foreign exchange benefits, and strong growth in reduced-risk products (RRP). RRP revenue increased 63.8% to JPY 43.5 billion ($278 million), with shipment volumes up 44.2% to 4.3 billion units, driven largely by continued expansion of its Ploom heated tobacco platform across 25 markets.
Combustible volumes remained broadly stable at 131.3 billion units, with growth in global flagship brands offsetting declines in some regions, while JT reported market share gains in more than 45 countries. The company maintained its full-year outlook, forecasting revenue of JPY 3.697 trillion ($23.7 billion) and operating profit of JPY 921 billion ($5.9 billion), as it continues to balance stable cigarette performance with accelerated investment in next-generation products.
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JTI Malaysia: Illicit Cigarettes Dominate as Price Gap Widens
“Cost pressure means consumers often cannot afford to think about safety,” was the message from Joseph Anak Janting, president of Malaysia’s Dayak Transformation Association (TRADA). The comment came as officials examined the nation’s thriving illicit tobacco market, not just its financial impact, but also the unknown ingredients being ingested from unregulated products.
Japan Tobacco International (JTI) Malaysia released data today (April 30) that shows 57% of the Malaysian tobacco market is illicit, a number that climbs near 80% in regions such as Sabah and Sarawak, where the market is driven by a significant price gap. Legal cigarettes cost over RM20 ($5) per pack compared to illicit products that sell for as little as RM4 to RM8 ($1 to $2), following recent excise tax increases and retail restrictions. In Sarawak, where the average monthly household income is RM5,504 ($1,376) and rural incomes are significantly lower, Janting said the price gap is not a minor consideration; it is the difference between affording cigarettes and not affording them.
JTI identified three primary categories of illicit products: counterfeit tax-stamp cigarettes, which have doubled to 16% market share since 2023; smuggled “whites” lacking tax stamps; and illegally imported kretek cigarettes. Officials said expansion of the illicit trade is contributing to an estimated RM4 billion in annual lost tax revenue, with enforcement challenges compounded by cross-border smuggling and counterfeit production networks.
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JTI Adding €300M Factory in Romania
Japan Tobacco International announced a €300 million investment to build a new, state-of-the-art factory in Ștefăneștii de Jos, marking its next step after more than 30 years of operations in Romania. In a LinkedIn post, JTI said the facility will add nearly 70,000 square meters of production space and feature advanced equipment, 100% renewable energy operations, expanded waste management, and a dedicated water treatment system, underscoring the company’s long-term commitment to sustainable manufacturing in the country.
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Japanese Consumers Facing Double Hit
The first phase of Japan’s tax increases on tobacco products and corporate income will take effect April 1, marking the first phase of a broader revenue plan to finance expanded defense spending, with additional increases planned for October and January 2027. Both conventional cigarettes and heated tobacco products will be affected, with the long-standing tax gap between the two categories set to narrow. The government aims to raise ¥1.3 trillion ($8.2 billion) in fiscal 2027 through staged hikes on tobacco, corporate, and personal income taxes to help fund a ¥43 trillion ($271 billion), five-year defense buildup that began in 2023.
In response to the new corporate taxes, Philip Morris Japan said it will raise prices by ¥40–¥50 (25 to 32 cents) per pack on 50 heated tobacco products from April 1, while Japan Tobacco plans ¥20–¥30 (13 to 19 cent) increases on 37 products. Manufacturers have not yet outlined pricing responses for October’s tax hike.
The Finance Ministry estimates tobacco tax revenue will increase by ¥44 billion ($277 million) in fiscal 2026, ¥116 billion in 2027 ($731 million), and ¥212 billion ($1.3 billion) annually thereafter as additional levies take effect. The measures come as Japan seeks to secure more than ¥9 trillion ($56.7 billion) in defense spending for fiscal 2026, reaching its 2% of GDP target ahead of schedule.
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JT Takes $710M Dividend, Little Impact on Consolidated Results
Japan Tobacco Inc. announced that its consolidated subsidiary, JT International Holding B.V., will distribute a dividend of approximately JPY 110.1 billion ($710 million) to Japan Tobacco, with receipt planned for March 26. The dividend will be recorded as non-operating income in JT’s non-consolidated financial statements for FY2026, but it is not expected to materially affect the company’s consolidated financial results for the year.
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JTI Posts 12% Revenue Increase in Posting 2025 Financials
Japan Tobacco published its financial statements and independent auditor’s report for the 2025 fiscal year yesterday (March 24). The company reported strong year-on-year growth in 2025, with revenue rising to ¥3.5 trillion ($21.9 billion) from ¥3.06 trillion ($19.3 billion) in 2024 and gross profit increasing to ¥2 trillion ($12.3 billion). Operating profit more than doubled to ¥867 billion ($5.5 billion), driven by higher income and significantly lower selling and administrative expenses, while profit before tax climbed to ¥739.8 billion ($4.7 billion). Net profit for the period surged to ¥513.2 billion ($3.2 billion), up from ¥182.6 billion ($1.2 billion) the previous year, with earnings per share nearly tripling. Comprehensive income also rose sharply to ¥686.4 billion ($4.3 billion), reflecting stronger foreign exchange gains and overall improved performance.
According to Investing.com, JT’s outlook for 2026 remains optimistic, with an expected core revenue increase of 3.6% and an 8.9% rise in adjusted operating profit at constant currency. The company plans to invest ¥800 billion ($5 billion) in reduced-risk products (RRP) from 2026 to 2028, focusing on consumer acquisition and retention. JT is also exploring mergers and acquisitions opportunities to further strengthen its position in both combustibles and RRP markets.