Japan Tobacco lags foreign competitor

The capacity constraints that have dogged the domestic launch of Japan Tobacco’s heated tobacco device will take sometime to resolve, according to a company executive, handing a further boost to Philip Morris International in the world’s most advanced market for nextgeneration tobacco products.

Japan Tobacco underestimated the level of demand for its Ploom Tech device since releasing the product in March in its home market, Yasuhiro Nakajima, vice-president of emerging products, said. The cigarette maker is spending tens of billions of yen to relieve the capacity constraints that are preventing it from selling Ploom Tech nationwide.

“We are improving the Ploom Tech supply situation but to be honest, it is taking some time,” Nakajima said. “I cannot tell you that we can resolve the issue very quickly.”

The misstep has left Japan Tobacco a frustrated bystander as Philip Morris has scooped up 5.5% of the country’s cigarette market with a smoking alternative called iQOS since releasing it nationwide in April. British American Tobacco’s device Glo is also set to provide fresh competition. The number of Japanese smokers is on the decline, with only a fifth of the adult population regularly lighting up, according to data. That is down from 26% in 2005.

The sale of e-cigarettes and alternative vapour devices is heavily regulated in Japan, meaning the country has become the foremost global battleground for heated tobacco products. Ploom Tech is a penshaped, battery-powered device that uses vapour from heated liquid to deliver the taste of granulated tobacco leaves in a capsule.