Cigarette Sales Skyrocket Ahead of Price Hike in Japan

A record tobacco tax hike boosted cigarette sales at a last minute rush in Japan by 88 percent from a year earlier to 37.4 billion sticks in September, an industry association said Wednesday.

"There was a rapid rise in demand in August and September in anticipation of the price increases to stock up on cigarettes," Tobacco Institute of Japan manager Tomohiro Noguchi said.

"The sales are expected to decline in October and gradually recover. But it is difficult to predict how much they will recover because the price increases were of an unprecedented scale," he said.

Japan Tobacco (JT), which dominates the country's cigarette market and in which the government has a 50 percent stake, raised prices by around 100 yen (1.2 dollars) for a pack of 20 on October 1 making some brands nearly 40 percent more expensive.

Popular brand Mild Seven rose from 300 yen to 410 yen per pack, up 37 percent.

JT's action was aimed at offsetting the impact of an increase in the tobacco tax by a record 3.5 yen per cigarette, or 70 yen per pack, a move proposed by former Prime Minister Yukio Hatoyama last year to discourage smoking.

The company has predicted that cigarette sales will decrease by around 25 percent in the year from October 1.

Japan has been slower than its counterparts overseas to introduce indoor smoking bans. In Tokyo, smoking in bars and restaurants is welcomed but banned on pavements.

Source: AFP