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Japan Tobacco Inc, the world's No. 3 tobacco maker, said it may raise the price of domestic cigarettes -- its first non-tax linked hike in 15 years -- to help offset nine straight years of a shrinking market.
The increase would come on top of rises in everything from gasoline to beer and noodles that have already burdened consumers in the world's second-largest economy.
Japan Tobacco, which is half-owned by the Japanese government, has seen costs rise even as it grapples with an ageing population and widening health consciousness that have reduced the ranks of smokers.
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Japan Tobacco Inc., the world's third- largest publicly traded cigarette maker, rose the most in two weeks in Tokyo trading after the Nikkei newspaper reported it may raise prices.
The company is considering higher prices because the cost of leaf tobacco and packaging has increased as much as 30 percent, the newspaper said, citing an interview with President Hiroshi Kimura. Japan Tobacco climbed 3.8 percent to 493,000 yen at the 3 p.m. close on Tokyo's stock exchange, its biggest gain since April 25.
Japan Tobacco Inc., the world's third- largest publicly traded cigarette maker, dropped the most in 10 weeks in Tokyo trading after earnings slumped at its domestic tobacco unit.
Operating income from Japan cigarette sales slid 9.4 percent to 222 billion yen ($2.12 billion) in the 12 months through March, the company said yesterday. Japan Tobacco dropped 4.1 percent to 490,000 yen at 3 p.m. on Tokyo's stock exchange, its biggest one-day decline since Feb. 20. . . .
``It looks as though earnings at the domestic cigarette business will deteriorate unless the company takes such measures as reducing the number of Japanese cigarette plants and revising cigarette pricing,'
Operating income from Japan cigarette sales slid 9.4 percent to 222 billion yen ($2.12 billion) in the 12 months through March, the company said yesterday. Japan Tobacco dropped 4.1 percent to 490,000 yen at 3 p.m. on Tokyo's stock exchange, its biggest one-day decline since Feb. 20.
The maker of Camel and Mild Seven cigarettes purchased U.K.-based Gallaher Group Plc last year to increase tobacco sales in Europe and Russia as smoker numbers dwindle in its home market. The contribution of Japanese cigarette sales to total revenue fell to 52 percent from 72 percent a year earlier.
Japan Tobacco Inc., the world's third- largest publicly traded cigarette maker, said full-year profit rose 13 percent after the takeover of Gallaher Group Plc helped increase overseas sales.
Net income was 239 billion yen ($2.3 billion) in the 12 months through March from 211 billion yen a year earlier, Japan Tobacco said in a statement to Tokyo's stock exchange today.
The maker of Camel and Mild Seven cigarettes purchased U.K.-based Gallaher last year to increase tobacco sales in Europe and Russia as smoker numbers fall in its home market. The contribution of overseas cigarette sales to total revenue doubled to 41 percent over the past year.
Japan Tobacco Inc. said Thursday its annual net profits rose 13.3 percent as brisk cigarette sales overseas following the takeover of British rival Gallaher made up for a drop in domestic demand.
But Japan Tobacco (JT) forecast a steep drop in profit in the current fiscal year because of acquisition-related costs, higher raw material prices and the impact of a health scare over dumplings the company imported from China.
For the past year to March, JT posted a net profit of 238.7 billion yen (2.3 billion dollars), a record high.
"The decline in domestic sales was more then offset by brisk sales in overseas tobacco markets," said JT president Hiroshi Kimura.
Japan Tobacco Inc, the world's third-largest cigarette maker, booked a 9 percent gain in quarterly operating profit on expanding sales outside its shrinking home market, but forecast a 28 percent fall this year due to an accounting change, its first drop in eight years.
Japan Tobacco last year acquired Britain's Gallaher Group for about $15 billion to vastly increase its international sales and offset declining revenues at home, where the population is shrinking and health-consciousness is spreading.
But Japan Tobacco, which makes Mild Seven cigarettes and owns the Camel, Winston and Salem brands outside the United States, said profits would sag this year as it begins to amortise goodwill related to the Gallaher acquisition.
Goodwill is the excess paid for a company above the value of its assets and includes intangible assets such as brand names.
Japan Tobacco Inc. (JT) said on Thursday its net profit rose 13.3 percent in the year ended
March as the acquisition of the UK's Gallaher Group Plc boosted overseas earnings, offsetting weaker business at home.
For the current year to March 2009, however, the country's biggest tobacco company is looking at its first net profit drop in five years, because of a stronger yen, goodwill amortization and higher material costs. . . .
'Once one-off factors are out of the way, I'm confident that we will return to a growth track in the year to March 2010, as we will continue to lift our share of the domestic cigarette market and expand our overseas tobacco business,' Kimura said.
The maker of Camel and Mild Seven cigarettes purchased U.K.-based Gallaher last year to increase tobacco sales in Europe and Russia as smoker numbers fall in its home market. The contribution of overseas cigarette sales to total revenue doubled to 41 percent over the past year. . . .
Tobacco sales in Japan fell 1.6 percent to 3.36 trillion yen as an increase in health consciousness reduces the smoking rate. The percentage of Japanese men that smoke has fallen by half over the past 40 years to about 40 percent.
A THREE-YEAR legal battle fought by Gallaher, the British maker of Silk Cut and Benson & Hedges cigarettes, has exposed its own connections with tobacco smuggling, sanctions busting and product dumping in the developing world.
Gallaher won its case in the High Court this month against a distributor when Mr Justice Christopher Clarke ruled that the tobacco company had lawfully terminated its contract with Cyprus-based Tlais Enterprises Limited (TEL) because of concerns over smuggling.
More than 20,000 internal documents were disclosed in the course of litigation. And an investigation by The Sunday Times reveals that many of these "cigarette papers" raise serious questions about Gallaher's own complicity in facilitating worldwide smuggling, sanctions busting in Iraq and the dumping of sub-standard cigarettes in Africa and Afghanistan.
A former Gallaher director at the centre of these allegations has blown the whistle despite attempts by the company to gag and discredit him. His witness statements contradict claims by Gallaher to the court that it "deplores smuggling".
Norman Jack alleges Gallaher's board operated a policy of "wilful blindness" . . .
Correspondence seen by this newspaper shows that Gallaher’s new owner, Japan Tobacco (JT), which bought the company last year for £7.5 billion, was concerned about the Iraq matter and further allegations. It wanted to settle the case before the ruling was made public. No deal was possible and Mr Justice Clarke’s 300-page judgment makes uncomfortable reading for all parties.
Jack was the director Gallaher appointed to implement a new and undeclared “trading policy”. It was laid out in a memo written by then chief executive Peter Wilson to his senior managers in May 1999.
It said: “As a consequence of the disruption to our business in Russia we should be seeking alternative sources of business in the short term in order to provide some compensation and to maintain throughput in our factories.”
From then on, Gallaher’s factory in Northern Ireland pumped out billions of Sovereign and Dorchester cigarettes with English health warnings for Jack to sell outside the European Union at low margins and without attempting to build any brand identity.
Tesco Plc, Imperial Tobacco Group Plc and 11 other companies were accused of coordinating cigarette prices between 2000 and 2003 in the U.K. antitrust regulator's first formal probe of tobacco sales.
The Office of Fair Trading said today it found evidence of 11 retailers and two manufacturers linking the price of tobacco brands made by competing companies. The regulator in London is also examining whether Imperial, Japan Tobacco Inc.'s Gallaher unit and five retailers shared information on prices. . . .
``A manufacturer would ask the retailer to sell his brand X at the same price or at a coordinated price below his competitor's brand Y,'' Gladstone said. ``There were also instances where manufacturers informed retailers about future pricing in the knowledge that retailers would likely tell rival manufacturers.''
The regulator said it may, where applicable, seek to attribute liability to parent companies. The companies can now file arguments refuting the OFT's so-called statement of objections, which lays out the regulator's findings.
Japan Tobacco, which acquired Gallaher last year for $15.4 billion, said it has been fully cooperating with the OFT.
Japan Tobacco International (JTI) increased tobacco production in Russia by 1.4% in 2007, JTI Russia's communications manager, Anatoly Vereschagin, said at press conference.
Japan Tobacco Inc., the country's largest cigarette maker, has decided to close down its cigarette plant in Ishikawa Prefecture, the ninth-biggest of its 10 cigarette factories, as a response to falling domestic demand, the company said Thursday.
Japan Tobacco has been expanding its cigarette sales outside Japan, as well as its other business operations such as food and pharmaceuticals, to compensate for shrinking business opportunities in Japan, where the population is aging and an anti-smoking campaign is gaining ground.
Japan Tobacco Inc., the world's third-largest publicly traded cigarette maker, said nine-month profit rose 15 percent on higher overseas sales, bolstered by last year's takeover of Gallaher Group Plc.
Net income was 222 billion yen ($2.08 billion) in the nine months ended Dec. 31 from 193.5 billion yen a year earlier, the company said in a statement to the Tokyo Stock Exchange today. Sales rose 29 percent to 4.7 trillion yen.
Japan Tobacco Inc. and Nissin Food Products Co. scrapped a $500 million merger of their frozen food units after the cigarette company was accused of selling poisoned China-made dumplings that sickened at least 10 Japanese.
Japan Tobacco scrapped an agreement to sell 49 percent in Katokichi Co. to the instant-noodle maker and then combine their frozen-food units, the three companies said through releases to the Tokyo Stock Exchange today.
Police and health officials from Japan and China are investigating the Chinese plant that produced the dumplings for clues on how the pesticide contaminated the products. The retreat from the merger is a blow to Japan Tobacco's plan to expand food sales and reduce its reliance on revenue from cigarettes in Japan, where the percentage of men that smoke has fallen by half during the past 40 years.