In 2021, cigarettes continued to record a sharp decline in volume sales, following the final stage of tax increases. In December 2017, the government announced a reform of the tobacco tax scheme from 2018 to 2022, to increase the taxes on cigarettes and heated tobacco.
Although volume sales of cigarettes continued to fall in 2021, the rate of the decline was not as sharp as that recorded in 2020. This is partly because cigarettes won consumers back from cigarillos, especially those sold at low prices.
While Japan Tobacco Inc retained its dominant position in cigarettes in 2021, thanks to the domestic producer offering a wide selection of brands, it registered a slight drop in its volume share. This was due to share gains by the company’s main rival, Philip Morris Japan KK.
Cigarettes is expected to see a continuous decline in volume sales in the forecast period, due to a rapidly ageing population and rising health concerns, coupled with a shift to heated tobacco. However, the decline is expected to see a gradual slowdown from 2022 onwards.
While the average income of Japanese consumers remained almost flat in the past 30 years, the price of cigarettes increased almost threefold, from around JPY200 to JPY600. Also, with global inflation, the prices of commodities are expected to keep rising, especially in the early forecast period.
While COVID-19 is expected to shift from pandemic to endemic in the forecast period, the changes brought about by the pandemic in the past two years will continue to have a significant impact on cigarettes. With COVID-19, many indoor smoking rooms, as well as outdoor smoking areas, have been closed, as they were publicised as a risk of infection, as people can be crowded together without wearing masks.
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RETAIL SALES OF DUTY PAID CIGARETTES The definition of cigarettes for the purposes of this study is duty-paid, machine manufactured white-stick products. This does not exclude brands of cigarettes that do not use white paper but it is designed to exclude the volume of non-machine manufactured products such as bidis/beedis (India) and papirosy (Russia), and other smoking products made with tobacco but that either do not resemble cigarettes as recognised in the US or Europe, or those that are not machine manufactured. The exclusion of these products is intended to give a more accurate picture of the "true" market for cigarettes and cigars which has been distorted in official statistics and published reports because of the inclusion of hybrid products. NB Please note that due to its central importance and integration into the industry mainstream, Indonesia’s market data does include hand-rolled kreteks DUTY-FREE sales are excluded from retail sales, as are herbal cigarettes. ILLICIT TRADE CIGARETTES Not included in retail sales, but split out separately in volume terms only. Defined as non-duty paid cigarettes (includes smuggled & counterfeit/fake products combined). Legitimate cross-border sales are considered duty-paid. Sales arising from a foreign national purchasing cheaper cigarettes in bulk in a neighbouring country for personal use and exported back are attributed to the country where the purchase is made (e.g. bulk cigarette sales by British nationals in France are attributed to France).See All of Our Definitions
This report originates from Passport, our Cigarettes research and analysis database.
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