Japan Tobacco – Key Cigarette Maker in Japan

May 28th, 2015 00:00
Japan Tobacco

Japan Tobacco (JT) is the world third biggest tobacco maker. It kept a 10.9 % share of the world market with regards to amount of cigarettes sold in the middle of the 2000s. Other market leaders are Philip Morris with 17.9 % share and British American Tobacco with 12.1 % share.

JT owns a 64.9 share of the Japanese cigarette market. It owned a net revenue of ¥239 billion in fiscal 2010. Its key brand is Mild Seven. According to statistics, in the 1990s JT's Mild Seven was the second bestselling cigarette brand worldwide after top Marlboro brand.

Japan Tobacco is 67 % government operated and was a government monopoly until eventually it was privatized in 1985. Numerous JT managers are ex - government bureaucrats. Most of the tax money that government gets from cigarettes derives from JT cigarettes.

JT has been failing to keep its market share due to foreign competitors. It has laid off workers and attempted to make up for cutbacks by widening abroad. In latest years, JT has been engaged in several takeovers. In 1999, it acquired the international business of RJR Nabisco, which manufactures Winstons and Camels, for ¥940 billion. Moreover, it has tried to acquire Tekel, Turkey’s state-owned cigarette producer. In 2007, Japan Tobacco acquired the British cigarette producer Gallagher Group for ¥2.25 trillion. It was the major ever purchase by a Japanese company. The step was made with the aim of extending into Russia and Eastern Europe. Gallagher manufactures Silk Cut, Benson and Hedges and some other brands and owns a 3.1 % share of the world tobacco market. The merge would offer JT 10.9 share of the world market.

JT founded the Tobacco and Salt Museum in Tokyo and runs an Ashtray “museum” at its company head offices to teach smoking manners. Lots of JT cigarettes are sold effectively abroad, mainly in Asia. According to estimates, in 2005, the amount of cigarettes sold by JT outside of Japan surpassed those sold in Japan for the first time.

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