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Business trends

New rules in Japan take aim at heated tobacco

Measures are part of efforts aimed at reducing dangers of passive smoking

From left: British American Tobacco's Glo, Philip Morris' IQOS, Japan Tobacco's Ploom Tech (Photo by Akira Kodaka)

TOKYO -- Japanese regulators are preparing to expand the scope of their rules against passive smoking, this time targeting heated tobacco products. This is casting a shadow over the fate of the products, which have managed to increase their share of the tobacco market in the country.

Heated tobacco products allow users to inhale vapors infused with nicotine and other substances by using an electrical device to heat tobacco leaves, instead of burning them as in conventional cigarettes.

Manufacturers say the products do not produce secondhand smoke and have relatively little health impact on people around the user. There are currently no regulations controlling their use in public places such as restaurants.

But the freedom to use them in public locations will be restricted after the Ministry of Health, Labor and Welfare introduces the planned regulations, which are still being drafted.

The nation's tobacco industry has high hopes for the growth of heated tobacco. President Shea Lih Goh of Philip Morris Japan, which markets the IQOS tobacco heating device, estimates that heated tobacco's share of the market will reach 50% by 2020.

Sales of heated tobacco products have grown quickly in Japan since their introduction two years ago, and they now represent nearly 20% of the country's tobacco sales.

The rapid growth of heated tobacco products has been driven partly by their healthier image due to manufacturers' claims that they produce fewer harmful substances compared to cigarettes. As a result, more restaurants and bars permit the devices, compared to cigarette smoking, which is now restricted in most public places.

The health ministry has found, however, that heated tobacco vapors include harmful substances.

As the ministry is still working on the draft regulation, it is not yet known how much the final regulation will restrict heated tobacco smoking. A spokesperson for Japan Tobacco, which sells the Ploom Tech tobacco heater, declined to comment on its outlook on the market or strategy.

For now, heated tobacco product makers have aggressive plans to expand sales. Philip Morris Japan plans to introduce a new IQOS product, while JT said it will expand sales of Ploom Tech, which is available only in selected areas currently, nationwide by mid-2018.

The new regulations may force these companies to rethink their strategies, analysts said.

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