Japanese tobacco giants focus on point-of-sales cigarette purchases..

October 22, 2008 - In Japan is the land of vending machines. It is possible to get pretty much anything out of a vending machine. There are more than half a million cigarette vending machines.

The retail cigarette landscape across Japan is changing, as a result of a new type of cigarette vending machine that can actually count your wrinkles. In an effort to prevent underage smokers from illegally purchasing cigarettes, a Japanese company has developed a vending machine that can check a smoker's age by studying the lines on their face. Since July 1, 2008 the 'tobacco access passport' TASP ID card is required to purchase a pack of cigarettes.

Instead, the electronic ID system has led to a shift in the way cigarettes are purchased: smokers are unwilling to go through the process of applying for a card now feed their habit in convenience stores. “Before Taspo, the channel share was 50 per cent vending machines to 30 per cent convenience stores,” said Masaru Yoshimoto, project manager at Synovate (Synovate is one of the world's top research firms.) “Now convenience stores have 50 per cent and vending machines 20 per cent.” Marketing activity is growing in this environment - at the counter, there are promotions with, say, a limited-edition box with a unique lighter. They are trying to drive sales from the convenience stores.

Overall cigarette consumption is falling. The Japanese puffed 260 billion cigarettes last year (2007), a 17.1 per cent decrease compared to 2002, according to Euromonitor International, which forecasts an additional 16.3 percent decline to 218.2 billion sticks by 2012. The smoking population is also heavily male: in 2006, 48 per cent of males aged 15-plus and 18 per cent of women smoked.

Dominating this contracting market is Japan Tobacco. Last year, it had a 66.2 percent market share, followed by Philip Morris International with 24.3 percent and BAT with 8.4 percent.

Reference: Sector Insight..Japanese tobacco giants focus on point-of-sale by Glenn Smith, MEDIA, 10/16/2008.

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