Tag: Japan

JT’s volume plummets
Japan Tobacco Inc. reported today that its domestic cigarette sales volume during the six months to the end of June, at 46.8 billion, was down by 11.2 percent on that of the six months to the end of June 2016, 52.7 billion.
At the same time, industry volume was said to have been down by 11.0 percent from 86.2 billion to 76.8 billion.
JT said that its volume and that of the industry had been affected mainly by the expansion of the tobacco vapor category and a continuing market decline.
JT’s market share during the period was said to have been 61.0 percent, unchanged from the level of the previous year.
Core revenue for the domestic tobacco business fell by 7.6 per cent to ¥294.4 billion and adjusted operating profit was down by 7.4 percent to ¥12.0 billion.
Meanwhile, Japan Tobacco International’s total tobacco (including cigarettes, fine-cut, cigars, pipe tobacco and snus, but excluding water-pipe tobacco, emerging products and contract manufactured goods) shipment volume during the six months to the end of June, at 193.2 billion, was down by 3.3 percent on that of the six months to the end of June 2016, 199.7 billion.
JTI’s Global Flagship Brand (GFB) shipment volume was unchanged at 140.8 billion.
JT reported that a strong performance, primarily in Iran and Taiwan, had been unable to offset the impact of industry volume contractions in several markets and the unfavorable inventory comparisons of the first quarter. GFB shipment volume had remained stable because of market share gains in several key markets.
JTI’s core revenue fell by 1.2 percent to ¥577.2 billion, while adjusted operating profit rose by 1.0 percent to ¥195.1 billion.
“In the first half, we achieved continued growth in the group’s adjusted operating profit at constant currency driven by the international tobacco and pharmaceutical businesses, despite an increasingly uncertain and challenging operating environment,” said Mitsuomi Koizumi, president and CEO of JT, in commenting on the consolidated results.
“We’ve seen high earnings growth in the international tobacco business, for which our well-planned and executed cost optimization initiative is bearing fruit, as well as higher royalty revenues in the pharmaceutical business which also contributed to the group’s profit increase.
“In the Japanese tobacco business, cigarette industry volume decline puts further pressure on us, resulting in adjustments to our business performance.
“In the meantime, our promising tobacco vapor product, Ploom TECH, continues to receive strong interest from consumers in Tokyo, where we launched at the end of June. Given the unique features of Ploom TECH as well as our commitment and resources, we are confident to win in the increasingly competitive Japanese tobacco vapor category in the mid-term.
“As announced, 2017 has proved to be a particularly difficult year for us, however, we remain committed to investing for future sustainable profit growth and will continue to do so during the rest of this year.”
August 2, 2017
Smoking ban opposed
Legislation aimed at banning public-places tobacco-smoking in Japan is in limbo because of disagreement between the health ministry and the ruling Liberal Democratic Party, according to a story by Yumiko Doi and Miyuki Wakabayashi Kyodo for the Japan Times.
After an attempt to submit the bill to the Diet failed earlier this year, the Health, Labor and Welfare Ministry is reportedly hoping to submit such a bill to an extra session of the Diet that is expected to convene this fall.
The Times piece said that though Japan was to host the 2020 Olympics and though it lagged many of its peers in taking steps to eradicate passive smoking, the prospects for a legislative compromise were dim.
“We were unable to hold sufficient science-based discussions,” health minister Yasuhisa Shiozaki was quoted as saying after the Diet session ended earlier this year.
Shiozaki, who belongs to the LDP but is a key proponent of curbing second-hand smoking, read out a three-page statement explaining how Japan fell short in this area and what measures were needed.
The health ministry in October 2016 proposed imposing an indoor smoking ban on restaurants that would have allowed them to set up smoking sections, but many of the LDP’s politicians protested against the idea.
Tobacco farmers are traditionally major LDP supporters, and the party has a 280-strong group that lobbies heavily for smoking rights.
At a meeting of the LDP’s health policy board in February, one member said, “I have been smoking for more than 50 years but I’m healthy”, while another said, “Car exhaust is more harmful”.
The ministry made a concession and submitted a new proposal in March that suggested exempting small bars with up to 30 m² of floor space from the proposed indoor smoking ban.
The LDP countered that the exemption should be expanded to restaurants and bars of up to 150 m²on condition that they put up signs saying smoking was allowed, or if they set up separate smoking areas. But this would have effectively left most of the nation’s restaurants exempt.
The Japan Society for Tobacco Control and its supporters have begun a petition to urge Prime Minister Shinzo Abe to retain Shiozaki as health minister when he reshuffles his Cabinet as expected in early August.
Without Shiozaki in the Cabinet, “the party will take the initiative and water down the measures” to counter second-hand smoking, an LDP lawmaker said.
July 31, 2017
Japan’s smoking rate falls
The prevalence of smoking among Japan’s adult population fell from 19.3 percent in May 2016 to 18.2 percent in May 2017, according to Japan Tobacco Inc.’s annual survey.
Smoking among men fell from 29.7 percent to 28.2 percent, while smoking among women fell from 9.7 percent to 9.0 percent.
Based on population figures provided by the Statistics Bureau of the Ministry of Internal Affairs and Communications, Japan’s smoking population fell from 20.27 million in 2016 to 19.17 million in 2017.
The number of male smokers fell from 14.98 million to 14.26 million, while the number of female smokers fell from 5.28 million to 4.91 million. As of April 1, 2017, Japan’s population comprised 50.56 million men and 54.53 million women, while, as of April 1, 2016, it comprised 50.45 million men and 54.45 million women.
The JT study has been carried out annually since 1965.
The May 2017 survey was conducted using a stratified two-stage sampling method. Questionnaires were mailed to about 32,000 adult men and women (20 years or older) nationwide. JT collected 19,875 (61.9 percent) valid responses from the total population surveyed.
In publishing the results, JTI said it was of the view that the smoking rate in Japan had been and was on a declining trend due to various factors, including the country’s aging population, people’s growing awareness of the health risks associated with smoking, the tightening of smoking-related regulations, and tax and price hikes.
JT said it would ‘continue its efforts to realize a society in which smokers and non-smokers can co-exist in harmony’.
July 27, 2017
New end game in sight
Due to the rapid take-up of alternative tobacco devices in Japan and South Korea, Philip Morris International is looking to begin talks with governments within five years on phasing out traditional cigarettes, according to a story by Jackie Horne for asia.nikkei.com.
Horne said the time frame was based on projections of when the number of people using ‘new smoke-free devices’ would overtake the number of people smoking traditional cigarettes in those two countries.
“If you extrapolate the figures, then logically we could reach the tipping point in five years,” CEO Andre Calantzopoulos reportedly told the Nikkei Asian Review in a recent interview in Seoul.
“That is when we could start talking to governments about phasing out combustible cigarettes entirely.”
‘Calantzopoulos, who became chief executive in 2013, has staked his company’s future on next-generation devices it claims can reduce toxicity by as much as 90 percent,’ said Horne. ‘These include the IQOS device, which heats, rather than burns, tobacco packed into what resemble mini cigarettes.’
Calantzopoulos was quoted as saying that Asia was extremely important to the company as it implemented its strategy of phasing out conventional cigarettes.
The region was home to 60 percent of the world’s more than one billion smokers and Japan was the first and still the most successful market for IQOS.
Consumer take-up in South Korea, where sales began on a limited basis in late May, had also been encouraging.
Horne’s piece is at: http://asia.nikkei.com/Business/Companies/Japan-South-Korea-face-tipping-point-Philip-Morris-CEO?page=1.
July 18, 2017
Quit-services remote
The Japanese health ministry has approved a rule change that allows doctors to treat remotely, through smartphones or personal computers, patients who wish to quit smoking, according to a story in Japan Today.
The Health, Labor and Welfare Ministry has informed all 47 prefectures of the change, which took effect on Friday.
Under normal circumstances, the Medical Practitioners Act requires that initial examinations must be carried out face-to-face before treatment can begin.
But, under the change, no initial face-to-face examination is required in the case of a person seeking treatment to stop smoking, as long as the person undergoes regular medical check-ups.
Under the change, also, people will not have to see a doctor before getting a new prescription for drugs to stop smoking.
The ministry has approved doctors and smoking cessation patients communicating through emails, social network services, videophones, smartphones and personal computers, officials said.
National health insurance does not cover telemedicine consultations and treatment, but the ministry has said that it will ask the appropriate advisory panel to study the matter, the officials added.
July 17, 2017
JT’s June sales decimated
Japan Tobacco Inc.’s domestic cigarette sales volume during June, at 8.0 billion, was down by 10.1 percent on that of June 2016, 8.8 billion, according to preliminary figures issued by the company today. The June 2016 figure was down by 4.6 percent on that of June 2015.
Volume during January-June, at 46.8 billion, was down by 11.2 percent on that of January-June 2016, 52.7 billion. The January-June 2016 volume was down by 0.7 percent on that of January-June 2015.
JT’s market share stood at 61.3 percent during June, at 61.0 percent during January-June, and at 61.1 percent during January-December 2016.
JT’s domestic cigarette revenue during June, at ¥47.5 billion, was down by 9.7 percent on its June 2016 revenue, ¥52.6 billion, which was up by 0.2 percent on its revenue of June 2015.
Revenue during January-June, at ¥278.7 billion, was down by 9.0 percent on that of January-June 2016, ¥306.2 billion, which was increased by 1.8 percent on its revenue of January-June 2015.
July 14, 2017
Ploom Tech on sale in Japan
Japan Tobacco Inc said yesterday it hoped to catch up with Philip Morris International in respect of smokeless tobacco by expanding the number of smoke-free restaurants and public places that allowed its vaping product to be used, according to a story by Taiga Uranaka for Reuters.
Tobacco firms see Japan as a test ground for alternative vaping products because the country’s pharmaceutical regulations ban the nicotine e-liquids used with electronic cigarettes.
While PMI’s heated-tobacco product IQOS is already enjoying strong demand in Japan, JT’s launch of its Ploom Tech product has run into delays due to production shortages.
But JT was due to start selling Ploom Tech at its flagship shops today and at 100 tobacco stores in Tokyo on July 10. The company says it plans to sell the product nation-wide during the first half of the next year.
The company test-launched the product in Fukuoka in March last year and at its online shop, but it had to suspend sales after demand overwhelmed supply. It had apparently sold 250,000 Ploom Tech devices by the end of last year.
Unlike Philip Morris’s IQOS, Ploom Tech does not directly heat tobacco leaves. Instead, the battery-powered device generates vapor that goes through a capsule packed with tobacco leaves.
Japan Tobacco said the mechanism produced less smell than heated tobacco products produced, and the company hopes this will be a strong differentiating factor against its rivals’ products.
The Reuters story is at: http://uk.mobile.reuters.com/article/businessNews/idUKKBN19J0EP.
June 29, 2017
Smoking incidence down
The prevalence of smoking among Japanese people aged 20 years or older has fallen below 20 percent for the first time on record, according to a story in The Japan Times citing the results of a government survey published yesterday.
The fall in smoking prevalence was said to have given a boost to a health ministry proposal to ban smoking in enclosed public spaces.
During the survey, 19.8 percent of respondents said they smoked, a figure that was down 1.8 percentage points from that of a 2013 survey.
The downward trend was said to have been observed in most age groups and in respect of both men and women.
The percentage of people who said they smoke every day was down by 2.4 percentage points to 29.1 percent in the case of men, and down by 0.9 of a percentage point to 8.6 percent in the case of women.
The prevalence of smoking, including occasional smoking, among men in their 20s saw the biggest drop since 2013: 5.4 percentage points to 31.1 percent. The figure for men in their 20s in 2001 was 55.6 percent.
The group with the highest smoking prevalence is that comprising men in their 30s, 39.9 percent of whom are smokers, while the group with the lowest smoking prevalence is that comprising women aged 80 and older, 1.7 percent of whom smoke.
The Times reported that, as Japan prepares to welcome more foreign visitors ahead of the 2020 Tokyo Olympics, the Ministry of Health, Labor and Welfare had been promoting a bill that would strengthen measures protecting people from second-hand smoke.
June 28, 2017
JT’s domestic volume down
Japan Tobacco Inc.’s domestic cigarette sales volume during May, at 8.2 billion, was down by 6.4 percent on that of May 2016, 8.7 billion, according to preliminary figures issued by the company on Friday. The May 2016 figure was down by 4.5 percent on that of May 2015.
Volume during January-May, at 38.9 billion, was down by 11.9 percent on that of January-May 2016, 43.9 billion. The January-May 2016 volume was increased by 0.1 percent on that of January-May 2015.
JT’s market share stood at 60.7 percent during May, at 60.9 percent during January-May, and at 61.1 percent during January-December 2016.
JT’s domestic cigarette revenue during May, at ¥48.9 billion, was down by 6.0 percent on its May 2016 revenue, ¥52.0 billion, which was up by 0.3 percent on its revenue of May 2015.
Revenue during January-May, at ¥231.3 billion, was down by 8.8 percent on that of January-May 2016, ¥253.6 billion, which was increased by 2.1 percent on its revenue of January-May 2015.
June 19, 2017
JT playing catch up
Japan Tobacco Inc. plans to spend $500 million to quadruple its production capacity of smokeless-tobacco devices by the end of 2018 as it competes with Philip Morris for a bigger share of the Japanese vaping-products market, according to a story by Taiga Uranaka and Ritsuko Shimizu for Reuters.
Nicotine-containing e-liquids are banned in Japan under the country’s pharmaceutical regulations; so PM’s heated-tobacco product, iQOS, has created strong demand, while JT’s Ploom Tech device has been beset by delays.
JT’s CEO, Mitsuomi Koizumi, admitted that he had not foreseen the success of iQOS, which had captured about a 10 percent market share in April, up from 7.6 percent in January.
With more people shifting to heated-tobacco products such as iQOS, JT’s domestic cigarette sales volume is likely to fall 9.6 percent this year.
“It’s shocking,” Koizumi was quoted as saying. “I am doing this business for more than 35 years but I have never experienced losing 10 percent in volume in one year.”
The Reuters story is at: http://www.reuters.com/article/us-japan-tobacco-strategy-idUSKBN18P12F
May 30, 2017