Tag: Japan

  • JT Approves Domestic Burley for Consumption

    JT Approves Domestic Burley for Consumption

    Japan Tobacco (JT) has cleared this year’s burley harvest in Japan for use in its cigarettes.

    Since the accident at the Tepco Fukushima Daiichi nuclear plant in 2011, JT has been conducting pre-purchase radioactive material tests of domestic leaf tobacco and several other tests at each stage of its production process.

    Tests for this year’s burley have now been completed. None of the leaf tobacco had traces of radioactive material exceeding the JT standard value (radioactive cesium: 100Bq/kg), the company confirmed in a statement.

    JT will continue with its scheme of testing domestic leaf tobacco after purchase, to test and monitor at each stage of the productions process several times.

    In related news, JT announced that it will discontinue disclosure of pre-purchase test results for domestic leaf tobacco after this report (2020).

    Recently, in radioactive material testing on agricultural products conducted by Fukushima Prefecture and other prefectures, there have been virtually no cases where the traces of radioactive material exceeded the standard values, and the company’s survey is on the decline.

    In addition, no cases exceeding JT standard value have been observed in the company’s test results.

    JT will continue with its scheme of testing domestic leaf tobacco upon purchase.

  • JT Completes Head Office Relocation

    JT Completes Head Office Relocation

    Photo: Taco Tuinstra

    Japan Tobacco (JT) has completed the relocation of its head office to the Kamiyacho Trust Tower from the JT Building.

    JT will occupy five floors from the 26th floor upward, with JT’s general reception located on the 30th floor, the company wrote in a press release.

  • Ministry OKs Japan Tobacco Price Increases

    Ministry OKs Japan Tobacco Price Increases

    Photo: Colleen Williams

    Japan Tobacco (JT) has received approval from the Ministry of Finance for its application dated July 31, 2020 to amend retail prices of its Japanese tobacco products.

    The new retail prices will be effective on Oct. 1, 2020 for a total of 224 products, including 136 cigarette products, 16 cigarillo products, three pipe tobacco products, three cut tobacco products, 18 snuff tobacco products and 48 tobacco vapor products.

    In a statement, JT said it will strive to continue to improve the quality of its products and services, in line with the expectations of its consumers.

    The retail price amendments are already included in the 2020 consolidated forecast announced on July 31, 2020, along with certain assumptions.

    Under the Tobacco Business Act, list prices for any tobacco products in Japan must be approved by the Ministry of Finance.

     

  • Japan: Male Smoking Drops to Historic Low

    Japan: Male Smoking Drops to Historic Low

    Photo: Colleen Williams

    Fewer than one third of Japanese men are smoking. Male cigarette consumption slipped to 28.8 percent last year, according to the national livelihood survey, a study conducted every three years by the Health, Labor and Welfare Ministry. In 2016, the male smoking figure was 31.1 percent. The female smoking rate fell 0.7 points to 8.8 percent over the same period.
     
    By age bracket, smokers in their 20s saw the biggest drops, with the ratio for men falling 4.1 points to 27 percent and the ratio for women dropping 1.9 points to 8.3 percent.
     
    Most smokers in Japan are in their 40s, with rates of 37.6 percent for men and 13.4 percent for women.
     
    The male smoking rate has been declining since hitting 48.4 percent in 2001. The downtrend is likely driven by growing health awareness and stricter anti-tobacco policies. In April, Japan banned smoking indoors at restaurants, offices, in hotel lobbies and other public places.
     
     The survey of people aged 20 or over counted as smokers those who smoke “every day” or “sometimes.”

  • JT Requests Permission to Raise Prices

    JT Requests Permission to Raise Prices

    Japenese smokers congregating in an outdoor smoking area in Tokyo
    Photo: Colleen Williams

    Japan Tobacco (JT) has applied to the Ministry of Finance for approval to amend the retail prices of its tobacco products in Japan in conjunction with the planned excise tax increase on Oct. 1, 2020, and the increase of excise tax on tobacco vapor products.

    The company has applied for the retail price amendment for a total of 224 products, including 136 cigarette products, 16 cigarillo products, three pipe tobacco products, three cut tobacco products, 18 snuff tobacco products and 48 tobacco vapor products.

    The proposed retail prices will take effect on Oct. 1, 2020, subject to approval from the Ministry of Finance.

  • Japan Tobacco Lowers Forecast

    Japan Tobacco Lowers Forecast

    Photo: Tobacco Reporter archive

    Japan Tobacco’s (JT) reported revenue of ¥1.03 trillion ($9.84 billion) in the first six months of 2020, 2.7 percent less than in the first half of 2019. Growth in the international tobacco business was unable to offset declines in other business, according to the company. JT estimates the Covid-19 pandemic to have had an unfavorable impact on its business of around ¥35 billion.

    JT’s adjusted operating profit was ¥287.6 billion over the six months (down 0.1 percent over the 2019 period) while its operating profit declined by 19.1 percent to ¥252 billion. Profit declined by 23.8 percent over the reporting period.

    The company enjoyed significant favorable pricing gains in the international business, but robust currency-neutral performance was offset by stronger currency headwinds than initially assumed.

    Operating profit and profit were impacted by a non-recurring one-time 2019 gain in JT’s pharmaceutical business, along with higher financing cost.

    Volume trends in Japan returned to levels prior to the Covid-19-related state of emergency declaration after significant declines in April and May.

    Anticipating lower tobacco volumes due to the Covid-19 impact and stronger currency headwinds, JT adjusted its fiscal 2020 forecast downward. The company now anticipates revenue of ¥2.01 trillion and adjusted operating profit of ¥457 billion for the full year.

    “Although the tobacco industry was not immune to the impact of the pandemic, our performance was resilient during the first half of 2020,” said Masamichi Terabatake, president and CEO of the JT Group. “JT Group maintained solid business momentum and delivered robust growth in adjusted operating profit at constant currency driven by pricing gains in the international tobacco business.

    “We have revised our forecasts based on reasonable assumption to date considering the current momentum, business environment and widening impact of currency volatility among other aspects. We believe that our solid business momentum will continue, despite of the Covid-19 challenges on our top-line.”

     

  • Japan Tobacco to Move Tokyo Headquarters

    Japan Tobacco to Move Tokyo Headquarters

    Photo: Taco Tuinstra
    Japan Tobacco’s new headquarters

    Japan Tobacco (JT) will relocate its headquarters to a new location in Tokyo on Oct. 5.

    The new address is: Kamiyacho Trust Tower, 24-6, Toranomon 4-chome, Minato-ku, Tokyo.

    JT will lease the 26th to 30th floors of the building and occupy 19,253.06 square meters of office space.

    The company has approximately 62,000 employees in more than 130 countries.

  • Unidentical Twins

    Unidentical Twins

    Photo: Keechuan | Dreamstime.com

    South Korea and Japan, the world’s leading heat-not-burn markets, have different views on the technology’s potential for tobacco harm reduction.

    By Stefanie Rossel

    Six years after Philip Morris International’s (PMI) IQOS device hit the shelves, Japan and South Korea are the world’s two leading markets for heated-tobacco products (HTP). Euromonitor International valued Japan’s HTP market at $8.59 billion in 2019, up from $7.76 billion in 2018. South Korea’s HTP market totaled $1.61 billion in 2019, up from $1.53 in 2018 and more than $1 billion above third-ranking Italy. In contrast to South Korea’s overall tobacco sector, which is expected to grow only modestly through 2023, the country’s HTP market may increase by 21 percent annually to reach $4.4 billion, according to Euromonitor.

    That South Korea followed in the footsteps of Japan surprised few. Both countries are perfect breeding grounds for high-tech reduced-risk tobacco products. Before the arrival of HTPs, their tobacco markets were dominated by combustible cigarettes. Both nations are health-conscious and tech savvy, sporting a love of gadgets. And both are economic powerhouses. With a population of 51 million, South Korea is the world’s 11th largest economy; Japan (population: 126.5 million) ranks third behind the U.S. and China. Both cultures value discretion and politeness, meaning that smokers are keen to avoid disturbing others, for example with secondhand smoke.

    There are, of course, differences between the two markets. Japan has often been cited as a special case in its rapid adoption of HTPs as there is little competition from other reduced-risk products (RRPs). Nicotine-containing vapor products are banned in Japan.

    Nonetheless, South Korea’s smokers eagerly embraced HTPs when they entered the market in 2017. Three types of electronic nicotine-delivery systems (ENDS) are sold in the country: e-cigarettes, HTPs and a hybrid product combining elements of both. Although e-liquid vapes were introduced earlier, HTPs quickly became much more popular. According to The Korea Herald, HTPs represented 13.5 percent of the country’s tobacco market in 2019 while e-cigarettes had a share of 4 percent. By comparison, the share of HTPs in Japan, where the products have been on the market since 2014, was estimated at 23 percent in 2019.

    In both countries, the HTP market is dominated by first-mover IQOS although other players have joined the race over the past few years. In Japan, IQOS held 17.7 percent of the country’s tobacco market in the first quarter of 2020. Other products include Glo (British American Tobacco) and Ploom (Japan Tobacco).

    In South Korea, HTPs include IQOS, Glo and KT&G’s Lil. With an estimated 50 to 60 percent, IQOS has the largest slice of the market.

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    Japanese success

    South Korea appears to offer even greater potential for lowering the overall smoking rate than Japan. Smoking is predominantly a male habit in South Korea, and although prevalence has slowly fallen over the past decades, it is still high compared with the Organization for Economic Cooperation and Development average of 23 percent. According to statista.com, 40.6 percent of male adults in South Korea smoked in 2018 whereas the figure for female smokers was 6 percent according to the most recent available data, from 2017. In total, the average smoking prevalence stood at 21.7 percent in 2018, down from 26.1 percent 10 years earlier, according to a study by the Korea Centers for Disease Control and Prevention.

    Until it became a testing ground for HTPs, Japan had similar figures. The share of men smoking decreased from 50 percent in 2001 to around 25 percent in 2018, with about 10 percent of Japanese women smoking, according to japan-guide.com. While sluggish at first, the decline accelerated spectacularly after the nationwide introduction of HTPs in late 2015. A study published in May 2020 on behalf of the Coalition of Asia-Pacific Tobacco Harm Reduction Advocates (CAPHRA) based on data from the Tobacco Institute of Japan and PMI confirmed that the remarkable reduction in combustible cigarette sales was triggered by the entry of HTPs.

    David Sweanor, a professor at the Faculty of Law of the University of Ottawa and one of the study’s authors, calls Japan a success story in tobacco harm reduction. The Japanese experience, he says, proves how consumers’ interest and the regulatory environment shape markets. While Japanese regulations precluded alternatives to combustible cigarettes, such as nicotine vapor products, HTPs generated huge interest among smokers in Japan.

    “As more [smokers] adopted the alternative, they helped speed switching by others,” says Sweanor. “I think this gives us an indication of just how much more rapidly countries could reduce cigarette use if there were many different low-risk alternatives available and policies and public education campaigns facilitated a widespread move away from [combustible] cigarettes. We have seen the most rapid decline in cigarette sales ever witnessed in a major market. A third of the cigarette market was gone in a remarkably short period of time, and this was accomplished with a noncoercive measure. People who smoke cigarettes were simply provided with a viable alternative.”

    Sweanor insists there now is evidence that a range of low-risk products could help rapidly achieve the smoking rate targets of the World Health Organization’s (WHO) sustainable development goals. “To seek to ban or limit access to such products protects the cigarette industry rather than public health,” he says.

    RRPs are the most disruptive influence on smoking in decades, according to CAPHRA Executive Director Nancy Loucas. In northern Asia, HTPs are the most popular form of safer nicotine products, she says. “So it is very disheartening that countries in Asia Pacific, like Korea and the Philippines, are looking to either ban and/or reduce access and choice of all forms of tobacco harm-reduced products for their smoking citizens.”

    South Korea’s home-grown heat-not-burn device, Lil by KT&G (Photo: KT&G)

    Different stance

    South Korea’s government, however, turned out to be less receptive to the harm reduction potential of HTPs than Japanese authorities. In June 2018, the country’s ministry of food and drug safety announced the results of its own study of HTPs, claiming that five cancer-causing substances had been found in the products, with the level of tar in some of them exceeding that of conventional cigarettes. The public health agency also ruled out that HTPs could serve as smoking cessation tools if they produced similar levels of nicotine as traditional cigarettes. The announcement sparked a legal battle with PMI and an ongoing conflict between tobacco manufacturers and South Korea’s government over the latter’s attempts to impose stricter regulations on HTPs.

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    The product category also saw a significant tax hike. Unsure about how to treat HTPs, regulators initially taxed them at half the per-pack rate of combustible cigarettes and required them to carry a dedicated health warning featuring a syringe. After category growth and a WHO recommendation, the government increased the tax rate to 90 percent of that of cigarettes and changed the warning labels to match those of traditional cigarettes.

    KT&G in January 2020 announced an agreement with PMI for the distribution of three HTPs and a vapor product outside of South Korea. Although the target markets have yet to be revealed, Japan is likely to be among them as it accounts for more than 90 percent of the global $5 billion HTP market, according to Euromonitor. And the category is expected to grow further in the country. The Japanese Ministry of Health, Labour and Welfare’s 2018 National Health and Nutrition Survey, which was published in January 2020, found that 30.6 percent of Japanese male current adult smoker and 23.6 percent of Japanese female current adult smokers were already using HTPs.

  • Japan Tobacco to Launch Ploom S 2.0

    Japan Tobacco to Launch Ploom S 2.0

    Image: Japan Tobacco

    Japan Tobacco (JT) is rolling out its Ploom S 2.0, an upgraded heated-tobacco device specialized for menthol. In addition, JT will launch two new menthol tobacco stick products under the Camel brand—Camel Menthol Red and Camel Menthol Yellow. These products will gradually be available at convenience stores and select tobacco retail stores across Japan beginning July 2, 2020.

    Ploom S 2.0 is equipped with a new heating mode that lengthens the duration of the peak heating temperature compared to that of the current Ploom S. According to JT, this allows for a balance among the freshness of menthol, rich vapor and clear tobacco taste.

    “The two biggest factors that influence the flavor of T-Vapor products are heating temperature and its duration,” explained Toru Takahashi, vice president of the marketing group product and brand division for reduced-risk products.

    “Ploom S 2.0 is capable of tailoring the device to heat the sticks at an optimal temperature and for an optimal duration with respect to the different stages from the first inhalation to the last rather than heating at a steady temperature,” he said. “This is the key to delivering the best flavor in T-Vapor products.”
     

  • Restrictions forcing Japanese smokers outside

    Restrictions forcing Japanese smokers outside

    Outdoor smoking is on the rise in Japan as a law is set to take effect April 1 to ban indoor smoking.

    Japanese smokers are finding it increasingly harder to secure indoor smoking areas, causing them to revert to smoking outdoors, often in parks and other public places where smoking is banned. This is also creating an issue with cigarette butt litter, which has led to some companies reinstating smoking facilities to combat the issue.

    Smoking indoors in places such as government agencies, schools and hospitals was banned under the revised Health Promotion Law, which partially took effect July 2019. In April 2020, more establishments, such as bars and restaurants, will be affected by the ban. Smokers caught breaking the law could face fines up to ¥300,000 ($2,694), and facility managers caught breaking the law could face fines up to ¥500,000.

    There will be exemptions to the ban, however. Restaurants and bars with initial capital up to ¥50 million and customer seating up to 100 square meters will be exempt if they display “smoking allowed” signs at the entrance.