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Japan rejects calls to increase cigarette tax
World Report
Japan rejects calls to increase cigarette tax Anti-smoking campaigners in Japan are dismayed at the government’s decision to put economic concerns ahead of health worries by not increasing tax on cigarettes. Justin McCurry reports. Anti-smoking campaigners in Japan have accused the government of fomenting a public health crisis after it rejected demands from health experts and Members of Parliament (MP) to increase the price of cigarettes. Their proposal to more than triple the price of a packet of 20 cigarettes— from 300 yen (US$3) to 1000 yen ($11)—and to use the revenue to fund soaring social security and health costs failed amid fierce opposition from industry lobbyists. Representatives of Japan’s 13 000 tobacco farmers warned that the proposed increase would ruin their livelihoods, while Japan Tobacco (JT), the world’s third biggest tobacco maker, said that sales would collapse. Health campaigners’ hopes were raised last year when Yohei Sasakawa, a WHO ambassador and president of the Japan Foundation, gave his backing to the price hike. His proposal was taken up by a group of MPs who pressed to include the hike in the fiscal year 2009 in the hope of persuading Japan’s 30 million smokers that their addiction would soon become financially unsustainable. Although the number of Japanese smokers has fallen since the mid-1960s,
AP
The printed journal includes an image merely for illustration
Campaigners failed to convince the government to raise the price of cigarettes
710
when more than 80% of men indulged, awareness of the health dangers posed by smoking remains low compared with the USA and Europe, despite the introduction of bigger health warnings on cigarette packets and local bans on smoking in public places. According to a recent survey by the Japan Health Promotion and Fitness Foundation, 39·5% of Japanese men smoked last year compared with 55·2% 10 years ago. Among women, the rate has dropped slightly from 13·3% in 1998 to 12·9% last year. But a closer look at the data reveals some
“Campaigners point to evidence that price rises deter smokers more than health warnings...” worrying trends. Among men aged 30–39 years the rate increases to 53%, and to more than 17% among women in their 20s. Although no official data are available for teenagers—it is illegal for people under 20 to buy cigarettes in Japan—surveys suggest the rate among minors is rising. In a flurry of press conferences held late last year as the government was putting the finishing touches to its draft budget, industry officials warned of dire consequences if the tax increase went ahead. “[It] could destroy Japan’s tobacco industry”, JT president Hiroshi Kimura said at the time. Campaigners point to evidence that price rises deter smokers more than health warnings: according to one Japanese study, every 10% rise in prices results in a 2–3% fall in demand. But the tobacco lobby fought against the prospect of a sharp slowdown in sales. In contrast to many other Japanese firms, JT is having a good recession. Earlier this month it said it was looking forward to record sales through to the end of March. The company’s higher
sales mean more revenues for the finance ministry, which continues to retain a 50·2% stake in JT even though it was privatised in 1995. With annual profits of about $3 billion a year, JT is expected to continue its resistance to price hikes, even as the cost of treating smoking-related diseases continues to rise. As a result, proposals for even a modest rise were dismissed amid intense pressure from tobacco farmers and cigarette sellers and makers. JT says price rises hand an unfair advantage to its competitors on the international market. In addition, the government already claims 190 yen per packet—the highest rate of tax on any consumer product in Japan and substantially higher per packet than in the UK. “Raising the price per packet to 1000 yen would make our products much more expensive than those in neighbouring countries”, the company said in a statement. “Tripling cigarette prices is detrimental to one segment of consumers—smokers—as well as to tobacco growers, retailers and local communities. It also conflicts with the fundamental role of taxes, which should be fair and unbiased.” The government found the fair taxation argument more compelling than the public health warnings. Although they are dismayed by the decision, campaigners are planning a year of action to ensure more smokers are priced out of their fatal habit when the next budget is drawn up. “Cigarettes in Japan are far too cheap”, says Kazushige Masuda of the Japan Health Promotion and Fitness Foundation. “It takes the average salaryman about 10 minutes to earn enough money to buy a packet of cigarettes, even though smoking is by far the most serious risk to health in Japan.”
Justin McCurry www.thelancet.com Vol 373 February 28, 2009
Japan rejects calls to increase cigarette tax Anti-smoking campaigners in Japan are dismayed at the government’s decision to put economic concerns ahead of health worries by not increasing tax on cigarettes. Justin McCurry reports. Anti-smoking campaigners in Japan have accused the government of fomenting a public health crisis after it rejected demands from health experts and Members of Parliament (MP) to increase the price of cigarettes. Their proposal to more than triple the price of a packet of 20 cigarettes— from 300 yen (US$3) to 1000 yen ($11)—and to use the revenue to fund soaring social security and health costs failed amid fierce opposition from industry lobbyists. Representatives of Japan’s 13 000 tobacco farmers warned that the proposed increase would ruin their livelihoods, while Japan Tobacco (JT), the world’s third biggest tobacco maker, said that sales would collapse. Health campaigners’ hopes were raised last year when Yohei Sasakawa, a WHO ambassador and president of the Japan Foundation, gave his backing to the price hike. His proposal was taken up by a group of MPs who pressed to include the hike in the fiscal year 2009 in the hope of persuading Japan’s 30 million smokers that their addiction would soon become financially unsustainable. Although the number of Japanese smokers has fallen since the mid-1960s,
AP
The printed journal includes an image merely for illustration
Campaigners failed to convince the government to raise the price of cigarettes
710
when more than 80% of men indulged, awareness of the health dangers posed by smoking remains low compared with the USA and Europe, despite the introduction of bigger health warnings on cigarette packets and local bans on smoking in public places. According to a recent survey by the Japan Health Promotion and Fitness Foundation, 39·5% of Japanese men smoked last year compared with 55·2% 10 years ago. Among women, the rate has dropped slightly from 13·3% in 1998 to 12·9% last year. But a closer look at the data reveals some
“Campaigners point to evidence that price rises deter smokers more than health warnings...” worrying trends. Among men aged 30–39 years the rate increases to 53%, and to more than 17% among women in their 20s. Although no official data are available for teenagers—it is illegal for people under 20 to buy cigarettes in Japan—surveys suggest the rate among minors is rising. In a flurry of press conferences held late last year as the government was putting the finishing touches to its draft budget, industry officials warned of dire consequences if the tax increase went ahead. “[It] could destroy Japan’s tobacco industry”, JT president Hiroshi Kimura said at the time. Campaigners point to evidence that price rises deter smokers more than health warnings: according to one Japanese study, every 10% rise in prices results in a 2–3% fall in demand. But the tobacco lobby fought against the prospect of a sharp slowdown in sales. In contrast to many other Japanese firms, JT is having a good recession. Earlier this month it said it was looking forward to record sales through to the end of March. The company’s higher
sales mean more revenues for the finance ministry, which continues to retain a 50·2% stake in JT even though it was privatised in 1995. With annual profits of about $3 billion a year, JT is expected to continue its resistance to price hikes, even as the cost of treating smoking-related diseases continues to rise. As a result, proposals for even a modest rise were dismissed amid intense pressure from tobacco farmers and cigarette sellers and makers. JT says price rises hand an unfair advantage to its competitors on the international market. In addition, the government already claims 190 yen per packet—the highest rate of tax on any consumer product in Japan and substantially higher per packet than in the UK. “Raising the price per packet to 1000 yen would make our products much more expensive than those in neighbouring countries”, the company said in a statement. “Tripling cigarette prices is detrimental to one segment of consumers—smokers—as well as to tobacco growers, retailers and local communities. It also conflicts with the fundamental role of taxes, which should be fair and unbiased.” The government found the fair taxation argument more compelling than the public health warnings. Although they are dismayed by the decision, campaigners are planning a year of action to ensure more smokers are priced out of their fatal habit when the next budget is drawn up. “Cigarettes in Japan are far too cheap”, says Kazushige Masuda of the Japan Health Promotion and Fitness Foundation. “It takes the average salaryman about 10 minutes to earn enough money to buy a packet of cigarettes, even though smoking is by far the most serious risk to health in Japan.”
Justin McCurry www.thelancet.com Vol 373 February 28, 2009