Japan Tobacco (JT) said it expects to ship nearly 10 per cent fewer cigarettes to its domestic market in 2017 due to increasing popularity of tobacco vapour products and continuing decline in its traditional market.

Core revenue, including duty-free, JT’s China business and emerging products, is forecast to decline 4.6 per cent in 2017. Japan is a major market for next generation products (NGPs) by major manufacturers, in particular heat-not-burn devices. JT said its entry in the category, Ploom Tech, would post higher sales in 2017.
JT said it expects shipment volume at its Japan Tobacco International unit to increase about 1 per cent with its key global brands posting a 1.5 per cent rise despite ongoing problems in the Russian market. JTI adjusted operating profit should increase 1.8 per cent in 2017.
Last year cigarette shipments to the domestic market fell 2.8 per cent to 106.2 billion sticks, JT said. Adjusted operating profit from the domestic business rose 2.4 per cent on sales that gained 1.2 per cent. Reported profit from its JTI unit, where results are reported in US dollars, was down nearly 15 per cent due to the strength of the yen against the dollar, JT said.