Tobacco firms eye April price hikes

Kyodo

Japan Tobacco Inc. and two of its biggest competitors in the domestic market are considering raising the price of cigarettes by ¥10 or ¥20 a pack after the planned sales tax hike in April, sources said Wednesday.

The envisioned price hikes vary by cigarette brand, with the prices of some products to remain unchanged, the sources said. The two other companies are Philip Morris Japan KK and British American Tobacco Japan Ltd.

Cigarette vending machines currently do not accept ¥1 or ¥5 coins, which would be necessary to exactly append the 3 percentage point tax increase onto current prices.

The companies will make arrangements so prices of cigarettes are raised by 3 percent as a whole, matching the rate of the consumption tax increase, the sources said.

They plan to decide by the end of this year which cigarette brands will be subject to the price hike and the level of increase.

As lifting tobacco prices requires approval of the Finance Ministry, each company plans to apply to the ministry for price increases to obtain approval by early February, the sources said.