JT mulls raising cigarette prices

JIJI

Japan Tobacco Inc. is considering raising all of its cigarette prices in line with the consumption tax hike next April, according to informed sources.

The price of its mainstay Mevius brand is expected to go up by ¥10 to ¥420 for a pack of 20 cigarettes, the sources said Friday.

The prices of other products would rise by ¥10 or ¥20 per pack, they said, adding it is difficult to raise prices by units of ¥1 because vending machines do not accept coins under ¥10.

The price hikes, to be implemented April 1 if approved, would be the first since October 2010, when the tobacco tax increased by ¥3.5 per cigarette, or ¥70 per standard pack of 20. The company plans to apply to the Finance Ministry to raise prices by the end of January.

Currently, most of Japan Tobaco’s mainstay products, including Mevius, with more than 30 percent of the market, and Seven Stars, with a nearly 8 percent market share, retail at ¥410 or ¥440 per pack. The April 1 sales tax hike to 8 percent from the current 5 percent would lead to price hikes of ¥12 per pack.

The nation’s largest tobacco business is expected to follow requests by the ministry that each producer limit overall price increases to 3 percent of combined product sales.

Rivals Philip Morris Japan KK and British American Tobacco Japan Ltd. are also planning to file price hike applications to the ministry by the end of January, the sources said.