Japan cigarette prices should rise 75%: Health Minister

Enlarge image Yoko Komiyama, Japan's health, labor and welfare minister.

Yoko Komiyama, Japan's health, labor and welfare minister. Photographer: Akio Kon/Bloomberg

Enlarge image Yoko Komiyama, Japan's health, labor and welfare minister.

Yoko Komiyama, Japan's health, labor and welfare minister. Photographer: Akio Kon/Bloomberg

Japan Tobacco Inc. (2914), the world’s third-biggest publicly traded cigarette maker, climbed to the highest in three years on speculation it can lift prices more than the tax increases proposed by the health minister.

Japan Tobacco rallied 5.4 percent to 368,000 yen, the highest since October 2008, at the 3 p.m. close of trading in Tokyo. It had the second-biggest advance today on the broader Topix index, which declined 1.7 percent.

Tobacco taxes in Japan should be raised until the average price of a pack of cigarettes is about 700 yen ($9.15), or 75 percent higher than the current level, to cut medical costs, Health MinisterYoko Komiyama said. Smoking in Japan was responsible for at least 4.3 trillion yen in medical costs and economic losses in 2005, according to the Institute for Health Economics and Policy.

“Tax increases will lead to Japan Tobacco’s profit growth,” said Mikihiko Yamato, a research partner at Japan Invest KK who recommends buying the stock. “If the price is over 500 yen, it will damage the sales of tobacco, but cigarette companies can still raise profit when their price increases reflect the higher costs.”

The ministry, which is participating in a tax panel session, will push for increasing tobacco levies by 100 yen annually for three years, Komiyama said in a Sept. 16 interview. Most panel members agreed with the idea last year, she said.

“At that level, we can expect people who want to quit smoking to stop, while maintaining the level of tax revenue,” said Komiyama, 63, who became minister on Sept. 2. “It’s also the best way to prevent underage smoking.”

Almost 10 percent of Japanese under 20 years old had smoked at least once, with 1.2 percent of them smoking every day, according to a study funded by the health ministry in 2007.

Efforts to raise duties have been complicated by government ownership of a controlling stake in Japan Tobacco and concerns that tax revenue may decline for a country facing the world’s largest public debt.

“When raising prices because of a tax increase, Japan Tobacco will offer prices that obviously exceed taxes they pay,” Yoshifumi Kikuchi, head of dealing at Nissan Century Securities Co., said today by phone. “If there’s a tax increase this time, though unrealistic, sales volumes will decline, but the amount of sales will grow.”

The tax panel, led by Finance Minister Jun Azumi, proposes reducing the government’s stake in Japan Tobacco to a third from about half, he said Sept. 16. The maker of Mild Seven and Camel cigarettes has gained 22 percent this year in Tokyo trading, giving it a market value of 3.7 trillion yen, or $48 billion.

A sale of the government stake in Japan Tobacco “will make it easier for the company to do business,” Japan Invest KK’s Yamato said.

The average price of a pack of 20 cigarettes increased by 33 percent last October to 400 yen, or about $5.20. That compares with the average price of $10.80 in New York City, where taxes were raised in July 2010.

Japan Tobacco forecast an 11 percent increase in profit this fiscal year after raising prices in Russia and other overseas markets. Net income in the year ended March rose 4.7 percent to 145 billion yen, beating analysts’ estimates.

Japan Tobacco Executive Deputy President Masakazu Shimizu said the government should “think cautiously” before raising taxes. Tobacco consumption is declining by 4 percent to 5 percent annually, and this may accelerate to as much as 7 percent if taxes are raised, he said.

One of every four adults in Japan smoked in 2009, according to Japan Tobacco. That’s down from one in three in 2000. Cigarette sales volume fell after a tax increase in October pushed up prices, Japan Tobacco has said.

The proposal to increase taxes is in accordance with the manifesto of the ruling Democratic Party of Japan, Komiyama said. The manifesto calls for abolishing a law that the government own more than half of Japan Tobacco’s outstanding shares and says tobacco-related issues should be included in the “health agenda,” she said.

The cigarette maker said Sept. 6 it wants the government to sell its shares and use the funds to finance reconstruction after a March 11 earthquake and tsunami left more than 20,000 people dead or missing. The Children’s Investment Fund Management UK LLP, the London hedge fund founded by Christopher Cooper-Hohn, has been lobbying for Japan Tobacco to buy back shares and raise dividends.

Central and regional governments raise about 2 trillion yen in tax revenue each year from tobacco, according to the finance ministry.

In the U.S., one of every five adults smokes cigarettes, according to the U.S. Centers for Disease Control and Prevention. Smoking was estimated to be responsible for $193 billion in annual health-related economic losses in the U.S. between 2000 and 2004, according to the CDC.

Tobacco-related illnesses comprise one of the biggest public-health threats and kill almost 6 million people a year, including 600,000 non-smokers, according to the World Health Organization.

Japan’s health ministry also will submit legislation at the session requiring businesses to ban smoking or provide separate smoking sections, Komiyama said. “I’m not stopping people from shortening their lives themselves,” she said. “But I don’t want to let them cause trouble for others.”

Komiyama, an anchorwoman for public broadcaster NHK for more than 20 years, began advocating anti-smoking measures when she became a lawmaker in 1998 and found other legislators smoked in the parliament buildings and at meetings.

“I walked around with a sign that said ‘no smoking at my table’ to every meeting I attended,” Komiyama said. “Then many lawmakers who didn’t enjoy the smoke began sitting near me. That’s how this started.”

To contact the reporters on this story: Kanoko Matsuyama in Tokyo at kmatsuyama2@bloomberg.net; Shunichi Ozasa in Tokyo at sozasa@bloomberg.net

To contact the editors responsible for this story: Frank Longid at flongid@bloomberg.net; Jason Gale at j.gale@bloomberg.net

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New health minister eyes big jump in cigarette tax

New health minister eyes big jump in cigarette tax Health minister Yoko Komiyama will seek increases in cigarette taxes that could almost double the current price of a pack--but she says the measure is not aimed at bolstering government coffers. It's simply because she cares about the health of smokers. In an interview with media organizations on Sept. 5, Komiyama said she would push for the increase as part of overall reform of the taxation system to be implemented in fiscal 2012. She said she would continue to seek further increases in the cigarette tax.
7 Sep With television entertainer Shinsuke Shimada revealing last month that he had ties to organized crime, Zakzak (Sep. 6) speculates that gravure idols (pin-up models often appearing in magazines and on variety shows) will soon find difficulties as police work to eradicate the underworld from the entertainment industry. Starting in October, new anti-gang legislation will prohibit ordinary citizens from doing business transactions with gangsters. Years ago, it was not unusual for organized crime groups, or boryokudan, to associate in public with enka and kabuki performers, but today that is no longer allowable. Nowadays the relations exist through offices that employ models. (Tokyo Reporter)
7 Sep An 81-year-old man who sexually abused two pre-teen girls visiting his home to take part in an English conversation group was sentenced on Sept.6 by the Tokyo District Court to 18 years imprisonment, a year longer than prosecutors had sought. Yasutomo Obana was found guilty of a number of charges, including rape resulting in injury. "You used your position to take advantage of the lack of sexual awareness and immature judgment ability on the part of the girls to carry out what was a foul crime," Presiding Judge Ikuo Toishi told Obana. Toishi praised the girls for their testimony in court and slammed Obana for his behavior. (majirox news)
7 Sep Kyoko Ogawa wore the brave face the world associated with Japan's tsunami survivors. The March 11 catastrophe washed away all her earthly possessions. She watched as her hotel burned to the ground in a gas explosion triggered by the tsunami; a hotel that had been in her family for generations. She was determined not to let the disaster break her. But after the elation of finding her son alive, the reality of losing her livelihood started to erode the calm facade. She was in turmoil. She was afraid to talk to other people about it because she knew everyone was suffering as much as her, if not more. (CNN)
6 Sep In mid-August, Tsuneko Iwakura was finally moved into temporary housing, after five moves in as many months since evacuating her home near a damaged nuclear plant. 'We hear we can stay here for at least two years, so we are now relieved,' said Iwakura, 78. She and her husband left their home in north-eastern Japan when the Fukushima Daichi Nuclear Power Station started leaking radioactive material, only 5 kilometres away. When the magnitude-9 earthquake struck the area on March 11, Iwakura watched as the walls of her house cracked and tiles fell from the roof. (monstersandcritics.com)
6 Sep More than 30,000 fashionistas flocked to Japan's largest fashion event, the Tokyo Girl's Collection -- or TGC this weekend -- a bi-annual show that combines the country's top fashion brands with popular music acts. Now in its sixth year, the six hour show has established itself as the epicenter of Japan's "kawaii," or cute culture, a culture that has gained a global following in recent years. On Saturday, the Saitama Super Arena, just outside of Tokyo, looked more like a cross between a concert and circus than a fashion show. Popular models strutted their looks down the runway, as adoring fans screamed their names, while other show-goers crowded booths featuring everything from makeup to a foot massage. In between, the TGC stage featured a mini ballet performance, and an appearance by Cirque de Soleil. (ABC News)

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Health Minister proposes raising cigarette taxes

TOKYO (majirox news) — Minister for Health, Labor and Welfare Yoko Komiyama proposed Sept. 5 to raise taxes on cigarettes to help fund recovery from the March 11 disasters.

“Last year I proposed raising cigarette taxes by 100 yen a year,” the minister told a news conference. “We’ve got all sorts of data that shows we could raise taxes up to the 700 yen level before it would start to affect tax revenues, so I’d like to at least get that far.”

Cigarettes in Japan currently cost around 410 yen to 440 yen ($5.33 to $5.72) for a box of 20, making them the least expensive in the industrialized world.

Komiyama is the former secretariat head of the bipartisan Anti-Smoking Promotion League of Parliamentarians. She criticized Japan’s policy of having the Finance Ministry control tax revenues obtained from cigarettes.

“It’s ridiculous,” she said. “The Health Ministry should be in control to try and protect people’s health. I want to talk to those concerned about this.”

Komiyama may face opposition in her anti-smoking crusade from Prime Minister Yoshihiko Noda. In July, while Finance Minister, Noda ruled out increasing taxes on cigarettes and liquor to help fund disaster recover, calling the suggestion a form of oyaji gyari, literally “old codger hunting,” as such a move would target mainly middle-aged men.

Japan raised taxes on cigarettes by about 30% in October last year by increasing the levy paid on each cigarette by 3.5 yen ($0.05).

Tags: cigarette taxes, Japan anti-smoking, Japan cigarettes, Japan Health Minister, Tokyo, Yoko Komiyama

This entry was posted on 09/06/2011 at 8:49 am and is filed under NEWS. You can follow any responses to this entry through the RSS 2.0 feed.

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Japan's life expectancy 'down to equality and public health measures'

Elderly Japanese people exercise in the grounds of a Tokyo temple. Public health campaigns seems to contribute significantly to life expectancy. Photograph: Yoshikazu Tsuno/AFP/Getty Images

It's not just the sushi – and it's definitely not the sake. Japan has the highest life expectancy in the world but the reasons, says an analysis, are as much to do with equality and public health measures as diet.

A baby girl born in Japan today can expect to live to 86 and a boy to nearly 80. But it has not always been so.

According to a paper in a Lancet series on healthcare in Japan, this is a rise of 30 years from the expected lifespan in 1947. While Japanese diet has contributed, it is far from the only factor.

The remarkable improvement in Japanese health began with the rapid economic growth of the late 1950s and 1960s. The government invested heavily in public health, introducing universal health insurance in 1961, free treatment for tuberculosis and cutting childhood deaths through vaccination and treatment of intestinal and respiratory infections.

Following the control of infectious diseases, Japan tackled its high death rate from stroke with salt reduction campaigns and the use of drugs to control blood pressure.

But beyond the government's initiatives, there are attitudes and cultural practices among the people of Japan that have also helped, says the article by Professor Kenji Shibuya, of the department of global health policy at the University of Tokyo, and colleagues.

"First, Japanese people give attention to hygiene in all aspects of their daily life," they write. "This attitude might partly be attributable to a complex interaction of culture, education, climate [eg humidity, temperature], environment [eg having plenty of water and being a rice-eating nation] and the old Shinto tradition of purifying the body and mind before meeting others.

"Second, they are health conscious. In Japan, regular check-ups are the norm. Mass screening is provided for everyone at school and work or in the community by local government authorities. A systematic check-up of the whole body, referred to as a human dry dock, is another type of health screening, which is popular amiong business people - they stay at clinics or hospitals for several days to undergo thorough physical examinations.

"Third, Japanese food has a balanced nutritional benefit and the diet of the Japanese population has improved in tandem with economic development over the past five decades."

The downside of Japan's success in keeping its people healthy is that the population is unbalanced and becoming more so. At the moment, 23% of the population is over 65 but by 2050, that will rise to 40% in a population shrinking from 127 million to 95 million. Other problems include drinking and smoking among overworking business people and a high suicide rate partly attributable to rising unemployment. Unless these issues are tackled, the paper suggests, Japan could lose its position at the top of the longevity table.

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