[Intl-tobacco] Japan Tobacco sales snuffed out by health concerns, higher prices

[rob@essential.org]

Japan Tobacco sales snuffed out by health concerns, higher prices
AFP
February 9, 2004

Tokyo - Japan Tobacco said Monday domestic sales dipped 6.1 percent from a
year earlier to 56.4 billion cigarettes in the December quarter, depressed
by growing health concerns and rising prices.

The former government monopoly however left its sales and net loss forecast=
s
for the year to March unchanged.

JT's domestic sales in the first three quarters of the fiscal year also
declined 5.1 percent to 169 billion cigarettes, said the world's third
largest tobacco company and the country's sole tobacco producer.

"Japan's aging population, growing health consciousness and the
after-effects of the tobacco price hike due to the tax increase in July
negatively affected cigarette demand nationwide," JT said in a statement.

JT has a share of more than 70 percent in domestic sales.

The statement said JT's overseas sales, combined with sales of internationa=
l
brands in Japan, fell 2.2 percent in 2003 from the previous year to 198.8
billion cigarettes mainly due to a continued decline in sales of low-priced
products as the company is shifting its focus to "global flagship brands"
(GFB) such as Camel, Winston, Mild Seven and Salem.

In addition, total demand also declined due to tax increases in mature
markets including Western Europe, JT said. But GFB sales worldwide expanded
7.1 percent to 117.5 billion cigarettes last year.

For the year to March, JT left its estimates of group sales and net loss
unchanged from forecasts made three months ago while upgrading its recurrin=
g
profit forecast by 13.7 percent to =A5197 billion, "reflecting the developm=
ent
of cost reductions in its domestic tobacco business."

But Japan Tobacco is expected to incur a one-off extraordinary loss of =A51=
0
billion due to an increase in employees accepting early retirement packages=
.

As a result, the group expects to chalk up a net loss of =A517 billion as
previously estimated, plunging from a net profit of =A575.3 billion in the
preceding year.

The group's sales forecast was left unchanged at =A54.64 trillion, up 3.3
percent from the previous year.