July 25, 2010 - Back in April we reported that Japan Tobacco, Inc. (JT) will increase cigarette prices in line with a hike in the cigarette tax slated for October but Philip Morris International and British American Tobacco will not.
Tobacco companies need the Finance Ministry's permission to change their prices in Japan.
The Finance Ministry has now approved JT's application for raising prices on around 100 cigarette brands October 1st in line with an increase in the cigarette tax to take effect the same day. JT will raise the price of its Mild Seven brand to 410 yen (4.68 USD) a pack from 300 yen (3.42 USD), that of Seven Stars to 440 yen (5.02 USD) from 300 yen (3.42 USD), and that of Caster to 410 yen (4.68 USD) from 290 yen (3.31
The tax increase will impose a levy of 3.5 yen (0.04 USD) per cigarette, or 70 yen (0.80 USD) per pack. JT’s price increase will exceed the additional tax and is aimed at maintaining the quality of its products despite expected sharp declines in sales to be caused by the tax hike, the company said. (Gov't OKs plan to raise cigarette prices by up to Y110 a pack, JapanToday.com, 7/19/2010)
Also, Philip Morris Japan KK said Thursday, July 15th it has now asked the Ministry of Finance to approve its plan to increase the prices of 76 cigarette products, in line with a tobacco tax hike taking effect in October 1st. Philip Morris Japan, the No. 2 player in the nation's tobacco market after Japan Tobacco Inc., plans to raise prices by 110-120 yen (1.25-1.37 USD) a pack. Its popular Marlboro brand will sell for 440 yen (5.018 USD) a pack, up from 320 yen (3.65 USD), while Lark smokers will have to shell out 410 yen (4.68 USD) for a pack instead of the 300 yen (3.42 USD) they have been paying.
The additional tax amounts to 3.5 yen (0.04 USD) per cigarette, or 70 yen (0.80 USD) for a standard pack of 20. With sales expected to decline after the tax increase, Philip Morris aims to maintain revenue through aggressive price hikes. (Philip Morris Seeks Cigarette Price Hikes In Japan, Nikkei.com, 7/23/2010 morning edition)