JTI’s Ploom device, a key growth driver for the company, saw volumes rise more than 38% over the year, reaching a 14.4% share of Japan’s heated tobacco market. Photo credit: JTI.
Japan Tobacco International (JTI) finance chief Vassilis Vovos told Reuters that a planned tax increase on heated tobacco products in Japan could slow market growth this year. The company plans to increase prices on its brands throughout the year to offset the impact.
Heated tobacco products currently face lower tax rates than traditional cigarettes in Japan. A government proposal would eliminate that advantage and tax heated tobacco at the same level as traditional tobacco, which would drive price increases, Vovos said.
“This increase is a significant one, and it could be in the area of ¥70-90,” he said, referring to the effect on retail prices. He added that the rise could reach ¥100 (US$0.65) after sales tax.
Lower prices have helped boost demand for heated tobacco products, and the tax change could slow growth in the category, Vovos said. However, he expects any impact would be temporary.
JTI raised prices on its heated tobacco products by ¥30 (US$0.20) in January and plans to introduce smaller increases over the rest of the year to reflect the tax change, rather than raise prices all at once.
The company reported strong financial results in 2025, with adjusted operating profit rising 23.5% at constant currency. Higher sales and pricing for traditional tobacco products and continued growth in newer categories, including heated tobacco and vaping products, supported the increase.
Ploom, which JTI views as a key source of future revenue, recorded volume growth of more than 38% over the year. The device gained ground in Japan, where it captured a 14.4% share of the