Cigarette sales volume in Japan FY 2012-2021

In fiscal year 2021, almost 94 billion sticks of cigarettes were sold in Japan. Referred to as a smokers’ paradise in the past, cigarette sales reached record lows in recent years. The tobacco industry used to be able to thrive unobstructed with the support of the Japanese government in the past, generating trillions in tax revenue. But reforms in the recent decade have been encroaching on the success of cigarettes as the go-to tobacco product.

One monopoly to face outside competition

The Japanese tobacco market is dominated by the formerly state-owned monopoly Japan Tobacco. While the Government of Japan still owns one-third of the company’s outstanding shares under the supervision of the Ministry of Finance, the domestic market has been opened to foreign cigarette brands. British American Tobacco and Philip Morris International were successfully establishing their presence in the market, but the businesses are not authorized to manufacture tobacco products in the country. As such, Japan Tobacco remains the sole authorized manufacturer within the country, while foreign competitors distribute their brands as imported products. In turn, the Japanese company is obliged to purchase the entire harvest of tobacco leaves produced within the domestic agriculture industry.

Bringing a shift into tobacco control policymaking

Japan used to have lenient smoking regulations, particularly for indoor smoking, where it was mostly unregulated unless it infringed on fire safety codes. But with Japan’s role as a host to the 2019 Rugby World Cup, 2020 Summer Olympics, and 2020 Summer Paralympics, policymaking shifted towards regulations to reduce passive smoking. While outdoor smoking is still frowned upon outside of dedicated smoking areas, indoor smoking bans were enforced for public buildings like schools and hospitals. Enclosed smoking rooms became a solution for other places like food service establishments, but the majority of businesses have a ban enforced on their entire premises. As a factor pushing smokers to look for alternatives to their cigarette consumption habits, stick sales remain on a continuous decline.