Japan Tobacco Starts Petition To Fight Tax Increase..

October 4, 2008 - Japan Tobacco Inc. (JTL), the world's third- largest publicly traded cigarette maker, will enlist customers in a campaign to stop the government from raising cigarette taxes. Back in July 2008 Chief Executive Hiroshi Kimura of JTL in a Reuters interview stated that most Japanese smokers would quit if the price of cigarettes were to triple.

The company is enlisting customers in a campaign to stop the proposed tax hike. It has asked consumers opposed to the proposal to fill in a petition at tobacco retailers, by mobile phone or on the Internet. Japan Tobacco said it will submit its petition to the government after the campaign, which the company plans to end in December, in time for the Japanese government's internal discussions on proposed taxes.

The campaign comes as the maker of Camel and Mild Seven cigarettes battles higher tobacco prices, a falling smoking rate and controls on vending-machine purchases that account for more than half its $31.4 billion in domestic tobacco sales. JTL's operating income from cigarette sales in the country slid 9.4 percent to 222 billion yen ($2.1 billion) in the 12 months through March 2008.

Besides JTL, organizations representing tobacco farmers and stores have jointly voiced opposition to a possible tobacco tax hike, arguing that higher tobacco prices would dampen consumption and not lead to increased tax revenue.

JTI claims that the tax hike could destroy Japan's tobacco industry; 50% of JTI is owned by the Japanese government.

References: “Tax hike could destroy Japan’s tobacco industry”, Tobacco Reporter, 10/3/2008 and Japan Tobacco Starts Petition Against Cigarette Tax Increase by Maki Shiraki, Bloomberg.com, 10/1/2008.