Japan Tobacco Group

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Japan Tobacco Group is headquartered in Tokyo, Japan, and has interests in tobacco, pharmaceuticals,1 and processed food.2 Here we focus on the tobacco side of its business and refer to the company as Japan Tobacco (JT).

JT is a privately-owned enterprise, with the Japanese government holding a 33.3% share.3 While JT retains autonomy in its international business, there are some restrictions on its activities in Japan.3

Its international tobacco operations are conducted via Japan Tobacco International (JTI). However, in 2022, JT brought its domestic and international tobacco business under the same management team.4

Background

History

The company’s origins date back to 1898, when the Japanese government established a bureau responsible for operating a monopoly for the exclusive sale of domestic tobacco leaf. In the early 1900s, this monopoly was extended to include all tobacco products in Japan, as well as the domestic salt industry. By 1949, the bureau was reorganised into the Japan Tobacco and Salt Public Corporation (JTS). In April 1985, JT was incorporated as a joint-stock corporation.5

Ownership

At incorporation, the Japanese government owned 100% of the shares in JT.356 In the mid-1990s the Japanese government began selling its shares, reducing its stake to 66.7% by 1996.7 In April 2002, the JT Act (which defines the purpose of JT and its scope of  business), was modified to allow for decreasing state ownership to a minimum of one third of the total shares.3 In 2004, the government stake was reduced to 50%. In July 2012, the Japanese government sold further shares, to support financial recovery in Japan after the Tohoku earthquake of 2011, retaining the minimum of 33.3% as per the JT Act.3

According to the company’s 2023 integrated report the Ministry of Finance is the largest single shareholder with 38% of the government share, followed by individuals (28%), financial institutions (16%), foreign institutions (11%), securities companies (5%), and other institutions (2%).89 (All figures rounded.)

Operations

The 1984 Tobacco Business Act, which dictates how the tobacco business is managed,310 requires JT to purchase the entire domestic tobacco leaf crop.6  It also requires that all applications to establish a tobacco retail business are approved by the Ministry of Finance, and that tobacco manufacturing in Japan remains exclusively controlled by JT.3

When JT was incorporated in 1985 as a joint-stock corporation, the Japanese market became fully open to foreign tobacco products. In 1987, all import duties on foreign cigarettes were removed, after pressure from the United States Trade Office to ease the trade imbalance between the two countries.5 Foreign tobacco manufacturers including Philip Morris International (PMI), British American Tobacco (BAT) and Brown & Williamson (B&W) promptly entered the Japanese domestic market, collaborating with leading Japanese trading companies.3 There was an increase in the market share of foreign cigarettes as they became much cheaper.65

In 2005, JT had to return the Marlboro brand license, which it had held since 1973, to PM Japan. The license allowed JT exclusive right to manufacture and sell  Marlboro products and use the Marlboro trademark in Japan, and in international market 311

JT responded to increasing competition at home by strengthening its tobacco business through expansion into the international market, as well as diversifying into other sectors (see below)6 Despite this diversification the tobacco sector (both national and international) still accounts for over 90% of JT revenues.8

Acquisitions & subsidiaries

In 1991 JT acquired The Manchester Tobacco Company (UK) making it its first acquisition of a company producing local tobacco products in a country outside Japan.3 This was in response to the failure of JT’s tobacco product export strategy in the European market.3

In 1999 it acquired the non-US operations of RJ Reynolds,11 owner of premium international tobacco brands Camel, Winston, and Salem.5 Reynolds was merged with parts of JT to form Japan Tobacco International (JTI), a transnational tobacco company (TTC) headquartered in Geneva.12 This merger enabled JT to expand into new markets in Africa, Asia, and Europe.6 For more information on international acquisitions from 2000, and JT’s global markets, see Japan Tobacco International

Key subsidiaries in the Japanese tobacco market include:13

  • TS Network: distribution of JT tobacco products; wholesale of imported products
  • Japan Filter Technology: manufactures materials
  • Fuji Flavor

For more on other subsidiaries and affiliated companies see: Tobacco Supply Chain

Products

The JT Group generates roughly 40% of its operating profits in the domestic tobacco market, where its products hold a market share of approximately 60% of Japanese cigarettes sales.14

JT primarily sells the same brands in Japan that it sells in the international market, including flagship brand MEVIUS, Seven Stars, Natural American Spirit, Winston, and Camel.1516

It also sells Ploom heated tobacco products (HTPs), named with2 in Japan, and Nordic Spirit nicotine pouches.17

The sale of e-cigarettes containing nicotine are banned in Japan by the Pharmaceutical Affairs Law, introduced in 2010.18 For more on  international sales of e-cigarettes through JTI, see E-cigarettes: Japan Tobacco International.

Market Strategy

JT has adopted a pricing strategy within its domestic market to retain price-sensitive customers by offering lower-priced products or, discounted brands  thus encouraging “downtrading” (consumers switching to lower-priced options)   instead of  quitting. . For example, between 2018-2019, JT launched three cheaper Camel brands,.1519 Similarly, in 2020, JT also introduced MEVIUS slim cigarettes at a cheaper price. Its integrated report 2020 stated that:

“We maintain our position as the cigarette market leader through continuous investments in the sub-premium, premium and prestige segments to raise brand equity. In the value and super value segment we are taking prompt, necessary action to adapt to environmental changes.” 20

In its integrated report 2021 JT indicated that the total tobacco industry volume and combustible market in particular witnessed a decrease due to the growth in its “risk reduced product”. It stated:

“In combustibles, given the current trends, we have strengthened our efforts to capture downtrading by developing the lower-priced MEVIUS S Slim line and E series. In addition, we have positioned Camel in the value price range to capture the outflow from cigarillos.”4

Another pricing strategy adopted by JT to increase its profits is overshifting tax increase; i.e. shifting the burden of tax increase on to the consumers, particularly on premium products which leads to increase in their prices. In July 2021, JT said that it had applied to the Ministry of Finance “to Amend Retail Prices of Tobacco Products in Japan in Response to a Planned Excise Tax Increase”, stating that  “it has become even more challenging to maintain the same quality and services that meet our consumer’s satisfaction” so the price increase is to   maintain good quality products thus satisfy consumers.21 However,  JT’s 2020 and 2021 Integrated Report suggests that the primary motivation was to protect its profits by “raising prices to pass [on] the tax increase to consumers.”22

Influence in Japan

JT maintains close ties with the Japanese government through government shareholdings in the company, lobbying and other mechanisms of influence such as the ‘revolving door’ between policymakers and JT. This has resulted in tobacco control policies being undermined.

Close ties with government

As the Ministry of Finance is listed as a principal shareholder of JT,158 it has both direct and indirect influence over the company235

In 2018, the Ministry of Finance stated it had no plans to sell its stake in JT, and that there is no conflict of interest, given that the Ministry of Health drafted the tobacco law in the country.24 According to the Ministry of Foreign Affairs,  the Ministry of Finance considers tobacco tax revenue a crucial source of government income and aims to preserve it and promote the tobacco industry.24

JT frequently provides financial and technical support to local government in Japan on tobacco-related issues, such as establishing public smoking areas and promoting cleaner streets.25 JT state that it supports the Japanese government in implementing the WHO FCTC and claims that its “expertise, knowledge, and experience are invaluable to the policy making process related to our industry”.23  For example, JT has stated that it seeks to “[P]romote understanding among relevant authorities” around taxation and illicit trade.20

Tobacco control researchers note that in countries with national tobacco monopolies, discussions take place behind closed doors where the tobacco industry is known to have influence over legislation, policy making and other decision-making processes.26627

Research has highlighted the role of government, hospitality industry groups, and politicians in  resisting smoking regulation.28 The annual Global Tobacco Industry Interference Index has highlighted these political ties and consistently ranked Japan at the very lowest end of the international league table for protection against industry interference.29

Revolving doors

The revolving door is Known in Japan as ama-kudari (“descending from heaven”) and this movement of individuals between government roles and senior JT positions is common.30

The board of JT includes former diplomats, state broadcasters, public prosecutors, and Ministry of Finance officials.30 Three of JT’s former CEOs previously held high-ranking positions at the Minister of Finance and National Tax Agency.5

Officials from the Ministry of Finance often retire into senior roles at JT, and legal approval from the Minister of Finance is required for JT to appoint senior personnel and make significant business decisions.28

Lobbying and influencing policy

Undermining national laws

In 1987, the Tobacco Institute of Japan (TIOJ) was founded by JT, Phillip Morris, R.J Reynolds, Brown & Williamson, and Rothmans Marubeni to coordinate the entry of cigarette companies into the Japanese market.28 TIOJ formed a Smoking and Health Subcommittee with U.S. law firms to unify industry positions. Soon after, it issued ‘[t]he Japanese Smoking & Health Controversy: TIOJ Plan’, a confidential plan, focused on delaying the formulation of regulations and maintaining the social acceptance of smoking in the country.30

In 2000, the Japanese government introduced the National Health Promotion project known as “Health Japan 21st”.31 A 13-year nationwide health programme designed to prevent and manage non-communicable diseases (NCDs) and their underlying risk factors31. It included goals relating to exercise, mental health, alcohol use, and smoking prevention,31 but excluded smoking cessation.5 The Ministry of Health had plans aimed to halve smoking rates by 2010, but this aspiration was dropped from the programme due to strong opposition from the tobacco industry, the Ministry of Agriculture, and the Ministry of Finance.5 The programme only supported smoking cessation for individuals choosing to quit, while a specific objective to help people quit smoking was not adopted.5 Japan cannot declare a reduction in smoking under Health Japan 21 due to the Tobacco Business Law, which aims to promote the country’s economic growth.5

In 2016, the Ministry of Health proposed an amendment to the Health Promotion Act banning smoking in all public places, but it was rejected in 2017 following strong opposition by the tobacco industry.32 Pressure from lawmakers who support the hospitality industries, and influential politicians who supported industry positions, led to a weakened version of the law, which permitted designated smoking rooms and excluded over half of Japan’s restaurants.10283334 In response to the revised law, JT provided free sessions with a separate-smoking (‘bun’en’) consultant, to help businesses set up designated smoking areas, therefore ensuring that smoking could continue despite the new restrictions.28

Ahead of the Tokyo Olympics and Paralympics in 2020, in response to international calls for smoke-free events, a national indoor smoking ban was passed, revised smoke-free regulations under the 2020 Japan Health Promotion Act. However, it was weakened to exempt over half of Japan’s restaurants after lawmakers again gave in to industry pressure.3335

The amended Health Promotion Act also covers HTPs, allowing their use in designated smoking rooms alongside cigarettes. However, unlike cigarettes, HTPs are also allowed in areas where people are eating and drinking.3236 JT promotes HTPs as “reduced-exposure” alternatives in the country. It encouraged home use through an intensified marketing campaign online and in newspapers during the COVID-19 pandemic, when Japanese citizens were following stay-at-home orders.36

Promoting “smoking manners”

JT has supported street smoking bans but strongly opposed indoor smoking bans.37 Japan’s National Cancer Centre has suggested that the industry’s support for street bans might be a strategic move to prevent stricter indoor regulations, as street bans lead to fewer smoking hours and thus a smaller reduction in cigarette use compared to indoor bans.37

Since the 1990s, JT, the Tobacco Institute of Japan, and Philip Morris Japan have been organising campaigns to promote “smoking manners” in public places, to support the social acceptability of smoking in the absence of strong smoke-free laws.38 They leveraged Japan’s culture of courtesy to build networks to resist smoking restrictions.28 This approach attempts to frame public smoking as a matter of manners, individual behaviour, cleanliness, and safety, while downplaying the health impacts. 2838  A survey conducted in 2007 by the health department of Kanagawa Prefecture revealed that smoking is mostly perceived as bad manners and not a health issue.38

This narrative has been promoted through mass media campaigns, street cleaning activities and the establishment of designated smoking areas.3837  By 2019, JT had established 943 “smoking spaces” in collaboration with 212 municipalities.39

In 2014 JT was reported to be spending ¥20 billion (aroundUS$14 million) a year on advertising, mostly to promote the concept of “manners”.40

Funding pro-tobacco research

In 1986, JT established the Smoking Research Foundation (SRF), under protection of the Japanese Ministry of Finance, to fund industry-friendly research and influence policy.2830SRF continues to fund research linked to ‘smoking and health’ (kitsuen to kenkō).30

Corporate social responsibility

Tobacco industry Corporate Social Responsibility (CSR) initiatives are opposing the WHO FCTC, as they promote voluntary measures that mask the industry’s true impact on public health.41 JT uses  what it calls a ‘4S’ (CSR) model, with its four stakeholders being consumers, society, shareholders and employees.42

In 2023, JT spent US$50 million on its CSR activities, distributed to 400,000 individual beneficiaries, and 514 organisations.43 It also  reported supporting over 400 programmes in 51 countries where it operates.43

JT’s numerous tobacco related CSR activities include sponsoring education, music and art, sports tournaments, environmental activities, and health related CSR. In addition, it conducted activities linked to SDGs, and targeted minorities.

Education

In 1978 JT opened the Tobacco & Salt Museum.44 It hosts a “Summer Salt Seminar,” where children learn about salt through experiments and exhibits.44 The museum also showcases smoking devices, product packages, and commercial posters about the history of tobacco.44

Music, art, and sport

JT supports arts and culture through developing musicians and professional orchestras, organising JT Forum cultural events, and running the Affinis Arts Foundation.44

JT sponsors the professional men’s volleyball team ‘JT Thunder’ and women’s team ‘JT Marvelous’ as well as volleyball events in schools. The professional games are shown on television which helps promote the JT logo. This has been criticised by the WHO.45

Environment

JT collaborated with local communities on the ’JT Forest’ initiative for reforestation in nine sites, from Hokkaido in the north to Kagoshima in the south.44

Since 2004 JT has led a community-wide cleanup campaign in Japan called “Pick up the Litter and You Will Love Your City, with the participation of local authorities, schools, and volunteers.46

Health

JT donated money to local governments during the COVID-19 pandemic, which the Japanese Society for Tobacco Control (JSTC) flagged as a breach of Article 5.3 and Article 13 of the World Health Organization Framework Convention on Tobacco Control (WHO FCTC). A letter from JSTC to local government heads highlighted that several municipalities received donations from JT for “support for parents of children with the coronavirus disease” and “medical support.” The JSTC also referenced a previous incident in 2011, when JT donated money to the Japanese Red Cross Society and the Nippon Foundation after the Tōhoku earthquake and tsunami, donations which were retracted due to international backlash citing a violation of the WHO FCTC.47

Sustainable Development Goals

Despite claims that it supports the UN Sustainable Development Goals (SDGs) to curb smoking, JT continues to expand its tobacco operations.

JT has promoted SDG-oriented initiatives in Japanese regional print and broadcast media to try to create a positive public perception of the company. 48

CSR related awards and certifications

On its website, JT lists awards it has received for activities relating to the environment and sustainability, diversity and human resources.49  and certifications  from the Japanese government.4950

For example, JT has been recognised as a Certified Health and Productivity Management Outstanding Organization (“White 500”) by The Ministry of Economy, Trade and Industry for its “health-conscious management” since 2017.49 JT is also certified as an “Eco Rail mark company” by the Ministry of Land, Infrastructure, Transport, and Tourism in Japan.  Similarly, Kansai Factory received two awards from Kyoto City and Kyoto Prefecture government in recognition of an emission reduction initiative.51 These awards help JT present itself as a responsible corporate citizen and foster positive relationships with government.

JT has made a series of efforts to promote inclusivity to the minority LGBT community, promoting and receiving awards, and taking part in Tokyo Rainbow Pride.52[Diversity Works, Japan Tobacco page, Diversity Works website, undated, accessed March 2022[/ref]5354

Activities targeting minority communities are perceived as a strategy used by the tobacco industry to divert attention from  the sale of  harmful products and to  rehabilitate its  public image without addressing the associated health harm.55

Non-nicotine subsidiaries & investments

In 2003, JT developed Plan-V (with “V” symbolising both the target year of 2005 and “Victory” in the market), aiming to establish three key strategic business units by 2013: tobacco, food, and pharmaceuticals. The pharmaceutical division focuses on R&D for international markets, and the food division concentrates on the domestic market and select Asian markets.3 Previous investments and key developments in these two industries are listed below.

Pharmaceuticals

1987: JT established its pharmaceutical division to develop drugs to treat medical conditions, including heart disease and lung cancer.5657

1993: Built its Central Pharmaceutical Research Institute in Osaka.56

1998:, Partnered with Torii Pharmaceuticals, which primarily manufacturers drugs for kidney disease, skin disease and allergies, taking charge of the R&D department.58 As of December 2021, JT owned 55% of Torri.59

1999: Purchased the rights to lung cancer vaccines that were being developed by American biotech companies Cell Genesys and Corixa.57

2013/2016: Launched anti-HIV drugs.11

2020: Launched a treatment for atopic dermatitis.11

2024: Announced a strategic partnership with Quantum Simulation Technologies, Inc. (QSimulate) to “accelerate AI-driven small molecule drug discovery technologies”.60

2025: JT announced that it was transferring its pharmaceutical business to Shionogi & Co., Ltd. This transfer included its stake in its “consolidated subsidiary” Torii Pharmaceutical.61

Food and drink

1998: JT entered into an agreement with Unimat Corporation and subsequently acquired the company, renamed Japan Beverage Holdings Inc.11

JT withdraw from the beverage industry in 2015, transferring its shares to Suntory Foods.62
1999: Acquired Asahi Foods and seven other subsidiaries of Asahi Kasei Corporation.63

2007: Took over Katokichi Co. Ltd., a Japanese frozen foods company (renamed Tablemark in 2010,364 65 and Fuji Foods, a Japanese seasoning maker.65

People

In November 2025, JT announced changes to its senior leadership “[t]o drive sustainable profit growth and increase the JT Group’s corporate value”.6667

Masamichi Terabatake, current President and CEO, since 201868 will become Deputy Chairperson of the Board.67 Takehiko Tsutsui, Executive Vice President of JTI, will take over as President, CEO, and Representative Director.67 Mutsuo Iwai remained Chairperson of the Board of Directors.68

For an up-to-date list of board and executive team see the JT website

Previous board members include:

 

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References

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  2. ↑Japan Tobacco Inc., Processed food, website, undated, archived 15 September 2024, accessed July 2025
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