As governments around the world move toward tighter smoking regulations, the race is on for tobacco companies to offer products that deliver a nicotine hit without all the smoke and tar of traditional cigarettes. The industry was rocked last summer by the U.S. Food and Drug Administration’s plan to mandate nicotine cuts in tobacco products to non-addictive levels.
Japan Tobacco Inc., which has seen domestic cigarette sales fall for 17 straight months, is playing catch-up in adapting to the changing environment. The company’s Ploom Tech smokeless tobacco device lags behind Philip Morris International Inc.’s IQOS in the Japan market, which is one of the early adopters of next-generation technology. Japan Tobacco’s stock has dropped more than 20 percent over the past 12 months.
New CEO Masamichi Terabatake is determined to close the gap. He said last month the Japanese company will introduce a new heated tobacco product that more closely resembles the technology of its rivals. Japan Tobacco will invest more than 100 billion yen ($943 million) over three years to develop next-generation devices, Terabatake said.
This article was provided by Bloomberg News.