Foreign Cigarette Manufacturers in Japan

July 6th, 2015 00:00

Imports represent 35 % of local cigarette use with 97 % of the products going from U.S. cigarette manufacturers. The leading international cigarette producers in Japan are Altria Group, holder of the world’s biggest cigarette maker Philip Morris, and British American Tobacco. Cigarette companies are amongst the most prosperous international businesses in Japan. As opposed to products like beef and rice, there are zero tariffs on tobacco products.

JTI

Japan opened its markets to overseas cigarette makers in 1984. Between 1986 and 1996, international cigarette brands increased from 2 % of the market to 22 %. Foreign cigarettes boosted by $7 billion in yearly sales. To compensate the loses encountered at home, American cigarette makers have migrated aggressively into markets abroad. They are primarily interested in the markets in Russia, East Europe and Asia, where there are many cigarette users and American brands are valued. In the middle of 1980, U.S. cigarette makers used the General Agreement of Trade and Tariffs (GATT) to transfer into Asian markets. Supported by the U.S. politicians and trade representatives, they insisted not only that they be granted the power to sell cigarettes and yet also be authorized to advertise their brands with special gifts, sponsorship of shows and sporting events, and marketing inclined to women and children.

In 1986, Senator Jesse Helms wrote a notice to Prime Minister Yasuhiro Nakasone addressing the issue that American cigarettes represented only 2 % of the Japanese market: "Your friends in Congress will have a far better opportunity to control the wave of anti-Japanese trade sentiment if and when you can refer to real examples of your doors being exposed to American products. I encourage that you make a promises to set up a timetable for enabling U.S. cigarettes a certain share of your market. Could I recommend a target of 20 % within the following 18 months.”

Philip Morris wooed potential women cigarette users with Virginia Slims and RJR did the same with potential adolescent smokers with Joe Camel. Japan Tobacco answered back with a slim cigarette for women known as Misty and one for young smokers called Dean.  After the increase of American brands, cigarettes boosted from the 40th to the 2nd most marketed products on TV in Japan

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