Philip Morris to stop selling cigarettes in Japan within 10 years

Nikkei -- May 08
Philip Morris International, the U.S. tobacco giant that makes Marlboro and Lark brand cigarettes, plans to stop selling cigarettes in Japan within 10 years, Nikkei has learned.

Revisions to the Health Promotion Law that went into effect last year prohibits smoking cigarettes in restaurants. In response, the company is turning its focus to "heat-not-burn" tobacco products, in which it holds a 70% share of the Japanese market.

Jacek Olczak, who took over as CEO of the tobacco company on May 5, revealed the plan in an online interview with Nikkei. Olczak said Japan will become a smoke-free society within 10 years. Philip Morris expects to gradually pull out of rolled tobacco products elsewhere over the next 10 to 15 years, and Olczak said he wants the transition to happen first in Japan.

Heated products let the user to inhale vapor generated by a heating element that does not release secondhand smoke. According to the tobacco industry, heated products also produce fewer harmful substances than conventional cigarettes.

In 2016, Philip Morris began selling its Iquos heat-not-burn product nationwide in Japan. The company held a 70% share of Japan's market for such products in 2019, according to Euromonitor International, a British market research specialist. That is far higher than rivals Japan Tobacco, with 10%, and British American Tobacco, with 20%.

Smokeless tobacco, which includes heat-not-burn and liquid e-cigarettes, made up 11% of Philip Morris' total shipments of 704.6 billion cigarettes. That is up three percentage points from 2019. The global market for rolled cigarettes has shrunk by just under 10% over the past four years.

- Nikkei