Division on HnB tax

Japanese lawmakers seem divided on a proposal that would raise the tax on heat-not-burn (HnB) products, according to Bloomberg News.

Prime Minister Shinzo Abe’s Liberal Democratic Party supports equalizing the tax rate with regular cigarettes; the LDP’s tobacco caucus is fighting to limit tax hikes on tobacco products; and Abe’s coalition partner Komeito favors a tax increase on both traditional and next-generation products.

Philip Morris International, British American Tobacco and Japan Tobacco are watching the developments closely, given that they have invested heavily in Japan’s HnB segment.

“Whatever happens in Japan now, you’re gonna see that probably put into people’s numbers for the wider global markets,” Owen Bennett, an analyst with Jefferies in London, was quoted as saying.

Japan Tobacco’s outgoing president, Mitsuomi Koizumi, reportedly said that a large increase in tax would be “troublesome for consumers.”