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Japan Tobacco Inc. said the country’s government will “eventually” sell its stake in the maker of Benson & Hedges cigarettes as Prime Minister Yukio Hatoyama may want to raise funds to stem rising public debt.
“What we hear is that they think about privatization, which includes us,” Munetaka Takeda, executive deputy president, told a briefing in London yesterday. “So, eventually it’s likely to happen.”
Japan’s government owns 50.01 percent of the cigarette maker, having sold stock three times since the company was founded in 1985. Shares of Japan Tobacco, the world’s third- largest publicly traded cigarette maker, have fallen 14 percent since Hatoyama came to office on Sept. 16, as the government debates whether to raise taxes on cigarettes.
“In the future, privatization has to be done,” said Yasuhiro Matsumoto, a senior analyst at Shinsei Securities Co. in Tokyo. Still, “the government wants to keep some control over Japan Tobacco to raise taxes.”
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Japan Tobacco (2914.T) is to take advantage of the growing popularity of its British cigarette brands, such as number one seller Mayfair, by raising the price of a 20-pack by 10-12 pence from Nov. 24.
"The momentum is with us, the wind is behind us, and we should harvest that," UK managing director of JT International Daniel Torras told reporters on Wednesday, adding higher tobacco leaf costs were behind the price rises.
The maker of Benson & Hedges and Silk Cut cigarettes in Britain said market share gains had prompted it to go ahead with price rises of nearly 3 percent now, as it looks to take the lead on pricing from arch-rival Imperial Tobacco (IMT.L).
"Our goal is to be number one in the UK and we expect to close the gap over the next few years," Torras said.
Japan Tobacco Inc.'s (2914.TO) U.K. business is closing the gap on market leader Imperial Tobacco PLC (IMT.LN) and will retain its recent market share gains, despite pushing up prices at the end of this month, JT's U.K. managing director said Wednesday.
Daniel Torras told reporters at a briefing in London that the company had increased its U.K. cigarette market share to 40.8% in September, up 1.8 percentage points on a year earlier. Imperial Tobacco's share meanwhile fell 1.5 percentage points in the same period to 42.3%, he said.
"Since Oct. 2008, we've seen very dramatic share growth," he said, "we've had share growth in every single segment."
Torras said he was confident these gains can be retained despite the company's planned price increases on Nov. 24. "We don't expect any share loss," he said.
He said the company's momentum in the U.K. allowed it to take a lead with price increases rather than following Imperial's pricing action.
Japan Tobacco Inc. said the country’s government will sell its stake in the company “eventually” as Prime Minister Yukio Hatoyama may want to raise funds to stem rising public debt.
“What we hear is that they think about privatization, which includes us,” Japan Tobacco’s executive deputy president Munetaka Takeda told a briefing in London today. “So, eventually it’s likely to happen.”
Japan’s government owns 50.01 percent of the cigarette maker, having sold shares three times since the company was founded in 1985. Most recently, the state sold a 14.5 percent stake in June 2004. Public debt in Japan is approaching twice the size of gross domestic product, according to the Organization for Economic Cooperation and Development.
“The government will look cautiously at the stock market, so it’s unlikely there’ll be a sale overnight or tomorrow, nor will they dispose of everything at once,” Takeda said.
A deadline for lawsuits seeking to recoup smokers’ health-care costs from a Japan Tobacco Inc. unit that had been sought by British Columbia, Ontario and New Brunswick was rejected by a judge for coming prematurely.
The Canadian provinces want their claims for treating people with smoking-related illnesses included among those of creditors for Japan Tobacco’s insolvent JTI-MacDonald unit. The provinces said they feared nothing would remain if JTI settled a federal lawsuit that seeks to recover lost taxes from cigarette smuggling in the 1990s.
Ontario Superior Court Judge Peter Cumming called the request premature in an Oct. 30 ruling. The provinces may challenge the company’s plan to exit bankruptcy when it is submitted, the judge said.
“There is no plan of arrangement being put forth or even seen at this point on the distant horizon,” Cumming wrote.
Japan's new administration is considering raising cigarette taxes to European levels to help pay for an ambitious domestic spending plan, in a potential threat to partially state-owned Japan Tobacco Inc.
Shares of Japan Tobacco—the world's third largest cigarette company by sales volume, after Altria Group Inc. of the U.S. and British American Tobacco PLC of the U.K.—fell more than 4% Monday before recovering and ending down 0.9% to 254,300 yen, or $2,824.93.
The sharp moves followed comments Sunday by a top Japanese health official during a television interview that raised the possibility of the tax increase.
"Tobacco poses health problems. It may be necessary to raise [the tobacco tax] to the levels in Europe," said Akira Nagatsuma, minister of health, labor and welfare.
The health ministry already has asked the government's tax panel to increase the tobacco tax as part of tax reforms for fiscal 2010.
Meanwhile, Japan Tobacco, which on Thursday reported a 5 per cent drop in net profits in the first half, also expects overseas markets to be its growth engine.
The group said that in addition to a downturn in domestic demand, the yen’s strength was a major factor behind its disappointing performance.
JT, which acquired Gallaher in 2007, said that if the impact of currency fluctuations was discounted, overseas sales were forecast to grow 13 per cent this year.
Furthermore, JT raised its sales and operating forecast for the full year, due to the impact of currency shifts.
Japan Tobacco Inc., the world’s third-largest publicly traded cigarette maker, raised its full- year profit forecast 8 percent on projected currency gains and increasing market share for brands including Camel and Winston.
Net income may be 108 billion yen ($1.2 billion) for the year ending March, compared with its previous estimate of 100 billion yen, the company said in a statement today. Annual sales may total 6.09 trillion yen, compared with its previous forecast of 6 trillion yen.
“We are changing our forecast mainly because we have changed our exchange-rate assumptions,” Executive Deputy President Munetaka Takeda said in a briefing in Tokyo today.
The maker of Mild Seven cigarettes seeks to boost overseas sales as a declining smoking rate shrinks its home market.
Canadian provinces, seeking more than C$80 billion ($76 billion) from tobacco companies for treatment of smoking-related illnesses, are attempting to improperly use the bankruptcy process to force Japan Tobacco Inc.’s JTI-MacDonald unit to settle, a company lawyer said.
“The strategy is to force JTI into an expedited settlement,” David Scott, a lawyer for the tobacco company, told Superior Court Judge Peter Cumming in Toronto today. “It’s a lever to force JTI to settle these health-care claims.”
JTI-MacDonald, the maker of Export A cigarettes in Canada, filed for bankruptcy protection in 2004, after a Quebec judge ordered the company to pay C$1.4 billion that the province claims it lost in taxes when tobacco companies exported cigarettes to the U.S. in the 1990s, knowing they would be smuggled back into Canada for resale on the black market.
British Columbia, Ontario and New Brunswick today asked Cumming to put a time limit on new lawsuits seeking to recoup health-care costs from JTI-MacDonald and allow their claims to be included in the company’s restructuring process. The request put the provinces at odds with the federal government, which sided with the tobacco company and urged the judge to either dismiss it or put it on hold indefinitely.
JTI Leaf Services' decision to process American-grown tobacco in Danville doesn't just mean 39 new full-time jobs and 150 seasonal jobs.
It's about more opportunities for the Dan River Region's tobacco farmers -- and a potential shot in the arm for the local agricultural economy.
"They're here. They never left," Commissioner Todd Haymore of the Virginia Department of Agriculture and Consumer Services said of local tobacco farmers last week. "They have the land and the infrastructure. They have the knowledge and the know-how." . . .
we think it's a smart investment in jobs that can be filled quickly by a company that recognizes the quality product grown here.
The Dan River Region needs every good job it can get, and growth in the tobacco sector through JTI Leaf Services' commitment to our community is great news.
Japan Tobacco International (JTI) has attacked the UK government for its plan to ban retailers from displaying tobacco.
In advance of the third reading of the UK Health Bill, in the House of Commons today (Monday 12 October 2009), Daniel Torras, JTI's UK managing director, said:
"The UK Government continues to demonstrate that it fails to recognise or listen to the evidence provided by key stakeholders that hiding cigarette packs from view in retail outlets will not achieve its goal of further reducing youth smoking. There is no credible evidence that tobacco display bans reduce youth smoking."
Japan Tobacco International developed a partnership with Hail & Cotton and J.E.B. International to form JTI Leaf Services, which will process domestic tobacco in Danville, president Steven Daniels of the new company announced Thursday morning.
JTI Leaf Services' offices, tobacco receiving, processing and finished product storage will be located in the Riverview Industrial Park at 202 Stinson Drive in the former Dan River Distribution Center.
Japan Tobacco's $19.5 million investment will bring 39 full-time jobs and 150 seasonal jobs by the time the facility is up and running in August 2010.
"We're excited to be a part of the community and we look forward to a long and successful partnership," Daniels said.
«Japan Tobacco International» company suggests to the government of RK using new methods of estimating of laws’ influence on markets
In Astana this issues has been discussed during round-table meeting organized by «Economist» magazine for business circles. Anastasios Sitsas, general manager of JTI Kazakhstan says the main advantage of innovation will be reducing of risks and expenses of regulating and unjustified load on business is also decreases. These methods allow to foresee all possible consequences of changes until the laws come into force. Its basis is expanded discussing of regulatory measures with experts and interested sides. Currently the company together with acknowledged international academic institutions is ready to organize trainings on methods for state employees.
This databook provides key data and information on the tobacco market in Singapore. This report is a comprehensive resource for market, category and segment level data including value, volume, distribution share and company & brand share. This report also provides expenditure and consumption data for the historic and forecast periods.
Further to the comments of Japan Tobacco International's Daniel Torras (Letters, 17 September), the Canadian province of Saskatchewan has had seven years' experience with a retail display ban.
A government survey shows our youth smoking rate has decreased from 29 per cent in 2002 to 20 per cent in 2008. All parties supported this and other measures, and the law has had good public support. Ex-smokers also say it is easier to resist the temptation to resume smoking when not faced with tobacco displays.
The negative economic impact claimed by the tobacco industry and others has not happened. Neither has there been an increase in smuggling.
We commend the Scottish Government for putting the interests of Scotland's children first. Please ignore the fear-mongering of an industry that is only interested in garnering new customers. It will fight to keep its product in front of the next generation of smokers – the children and youth of Scotland.