EXCLUSIVE: British American to Raise Tobacco Prices in Japan

August 20, 2018

Tokyo- British American Tobacco Japan Ltd. has filed for Japanese Ministry of Finance approval for its plans to raise the prices of its tobacco products in line with the planned tobacco tax hike in Japan on Oct. 1, informed sources told Jiji Press on Monday.

If approved, British American, known for its mainstay Kent brand, will raise its product prices by 30-40 yen per pack. Each pack contains 20 cigarettes.

The company also plans to raise the prices of its glo heat-not-burn tobacco products by a similar margin, but will refrain from a price hike this time and apply for MOF approval later.

The tobacco tax is set to be raised by one yen per cigarette on Oct. 1.

Meanwhile, Philip Morris Japan Ltd. plans to withdraw its price hike application and seek MOF approval for smaller price increases than initially planned, the sources said.

Philip Morris now plans to file for a price increase of 40 yen per pack containing 19 or 20 cigarettes, against its initial plan of 50 yen, out of concerns that the larger price increase may turn off smokers and lead to deterioration of its earnings, the sources said.

The price of its mainstay Marlboro-brand cigarettes is expected to rise from 470 yen to 510 yen.

Philip Morris plans to maintain its price hike plan for the IQOS heat-not-burn tobacco products, aiming for a 40-yen increase per package.

Japan Tobacco Inc. has already filed for MOF approval for almost all of its tobacco products. The price of its mainstay Mevius-brand products will rise by 40 yen to 480 yen, while the price of a capsule for the Ploom Tech heat-not-burn tobacco device will go up by 30 yen to 490 yen. Jiji Press