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Electronic Cigarettes Reduce The Sales Of Traditional Japanese Cigarettes By 10%
May 31, 2018

The popularization of e-cigarettes has affected the consumption of traditional cigarettes. In 2017, the sales volume of traditional cigarettes in Japan decreased by 10%, the largest drop since 1989.

According to the statistics of the Japan Cigarette Association, sales of traditional cigarettes in Japan have been declining since reaching a record high of 348.3 billion cigarettes in 1996. By 2016, sales of traditional cigarettes had fallen to less than half of 1996, to only 168 billion. The last time there was a decline of more than 10% in the sales of traditional cigarettes, it also occurred in 2010 when the tobacco tax rose sharply. At the time, the tobacco tax per cigarette increased by 3.5 yen, plus the tobacco company's own price increase. The price of a box of cigarettes eventually rose by about 100 yen (about 5.8 yuan).

Electronic cigarettes have become the leading cause of sales of traditional cigarettes in Japan. Japan is the world's largest e-cigarette market. Euromonitor International's report once stated that 96% of global e-cigarette sales come from Japan, and it is expected that the e-cigarette market in Japan will continue to grow at a rapid rate of 38% by 2018. By the end of December 2017, electronic cigarettes have accounted for nearly 20% of the Japanese tobacco market.

Tobacco company Philip Morris introduced iQOS, an e-cigarette that does not produce smoke and inhibits nicotine intake in Japan in 2014. Due to a lack of competitors, iQOS quickly became the most popular electronic cigarette in the Japanese market. However, the e-cigarette glo, launched by British American in December 2016, has a tendency to come on top of it, with sales exceeding one million units in just 10 months. Japan’s largest tobacco company, Japan Tobacco, also launched its self-developed e-cigarette ploom TECH in 2017.

On the other hand, the smoking population in Japan is indeed decreasing. According to data from Japan Tobacco, the adult smoking population in Japan decreased by 1.1% year-on-year to 18.2% in 2017, which is only half the number 30 years ago.

In the context of the increase in sales of e-cigarettes, tax increases for electronic cigarettes have been put on the agenda. If we use a box of cigarettes priced at 440 yen (about 25.5 yuan), 277 yen (approximately 16 yuan) is used to pay excise duties and various national and local tobacco taxes, that is, about 63% of the money Taxes are paid.

The e-cigarettes iQOS, glo, and ploom TECH have a tax rate of 29.2%, 36.2%, and 14.9%, respectively, which is far lower than traditional tobacco. However, the tax increase rate for e-cigarettes is still in the process of being discussed. According to a tax worker quoted in the “Toyo Economy”, the tax on cigarettes used in a box of ploom TECH may rise from the current value of around 68 yen (about 3.9 yuan) to 190. Before and after the yen (about 11 yuan).

But whether it is traditional cigarettes or electronic cigarettes, the days when a pack of cigarettes are settled with a 500 yen (approx. 29 yuan) coin will end next year, plus the 209% consumption tax in Japan will increase to 10%, and the cost of smoking will increase. The higher.