ArrowArtboardCreated with Sketch.Title ChevronTitle ChevronEye IconIcon FacebookIcon LinkedinIcon Mail ContactPath LayerIcon MailMenu BurgerPositive ArrowIcon PrintIcon SearchSite TitleTitle ChevronIcon Twitter
Business trends

Restaurateurs hedge their bets on Japan anti-smoking law

Large chains 'need to be selective' on which locations to make entirely smoke-free

Japan's health ministry aims to curb secondhand smoke with a proposed ban in restaurants.

TOKYO -- Japan approved its first national legislation prohibiting smoking inside public facilities on July 18. The move has been welcomed by health campaigners, but also drawn criticism for having numerous caveats and exceptions, and many in the catering industry are unsure about the extent to which they need to comply -- some have already taken matters into their own hands.

The revised health promotion law is designed to make offices, restaurants, schools, hospitals and administrative agencies nonsmoking areas. It does allow for people to light up in certain offices and large restaurants, but only in segregated smoking rooms where food and drink cannot be served.

The law will be implemented in phases through April 2020, coming into full effect shortly before the Japanese capital hosts the Olympic and Paralympic Games.

One notable exception to the regulations will be eating and drinking establishments with a floor space of 100 sq. meters or less that are run by individuals or small and midsize businesses, provided the management puts up signs saying "smoking permitted."

According to the Ministry of Health, Labor and Welfare, only about 45% of restaurants nationwide will be subject to the revised law, a considerably lower figure than the 84% in the capital that will fall foul of regulations passed by Tokyo Metropolitan Government in June.

Japan is at the bottom of the World Health Organization's rankings on anti-smoking measures, as the country currently allows smoking in all eight categories of public spaces.

"It is difficult to prohibit smoking at places that serve alcohol," said Shuichi Nyuta, the 64-year-old owner of Nyu's Bar, an establishment with fewer than 20 seats in Kobe. "A total ban would probably hurt sales, so on the whole I am satisfied with the exceptions in the new law."

The ruling Liberal Democratic Party had been at pains to consider the impact on the tobacco and catering industries. However, most large restaurant chains are one step ahead, having already created smoke-free environments at many of their outlets.

Kushikatsu Tanaka Holdings, the operator of a chain of casual bars where people go to snack on skewers of fried pork, has made 180 of its locations, 92% of the total, nonsmoking since June 1. The company reported that sales in June had fallen by 2.9% compared with June 2017, but the number of customers had increased by 2.2%.

Kushikatsu Tanaka, a chain of inexpensive bars that serve fried pork, has made 92% of its locations nonsmoking as of June 1. (Photo by Ryosuke Eguchi)

"There are fewer groups of men coming, but more families with small children are visiting our restaurants instead," said Monami Nagase, of the company's public relations department. "Hopefully, the smoke-free environment will lead to [families with] children becoming repeat customers."

Other large chains are testing the waters with different measures at various locations.

Sapporo Lion, the operator of the Ginza Lion chain of beer halls has made 47% of its outlets smoke-free, including ones with ventilated separate smoking rooms. One of its oldest and most famous locations in the exclusive Ginza neighborhood of Tokyo has been nonsmoking since it was renovated in 2015, which has made it more popular with tourists and groups of women.

Saizeriya, a chain of inexpensive family-style restaurants, made almost 30% of its branches nonsmoking earlier in July, while Japanese-pub operator Watami introduced segregated smoking rooms to two of its locations last year.

"The impact of the new national law will be minimal," said Nobuyoshi Miura, an analyst at Citigroup Global Markets Japan, "as large food service companies have already started creating smoke-free environments, whereas small bars will be allowed to carry on as they used to. The impact of [regulations specifically governing] Tokyo or other prefectures might be bigger."

In July and August last year, the Tokyo Metropolitan Government conducted a survey of establishments that have taken their own measures to curb exposure to secondhand smoke, ranging from a simple division of seats to banning smoking altogether.

Out of the 1,029 restaurants and cafes that responded, 55% said they had experienced no particular negative effect, while only 12% have seen a drop in sales, suggesting the impact on business would be limited. Among the 305 bars and izakaya, or Japanese-style pubs, taking part, the numbers were 47% and 14%, respectively.

However, the specifications regarding how separate smoking rooms must be ventilated have not been detailed in the new law. Some restaurateurs are concerned that, in addition to the room itself, large extractor fan systems could take up space that would otherwise be used for seats.

"We need to be selective about which restaurants we make smoke-free and in which ones we install smoking rooms, considering the characteristics of the customers and locations," said a press officer of a restaurant chain.

Tobacco companies have responded cautiously to the change. "Since the law takes effect gradually over the next couple of years, it is difficult to estimate the impact on our business," said Takuya Katahara, associate manager of media and investor relations at Japan Tobacco.

E-cigarettes that use liquid containing nicotine will not be affected, as they are classified as medicinal products rather than tobacco.

But the law does make provision for next generation, or heat-not-burn, cigarettes, which are considered to be less harmful in terms of secondhand smoke. Customers will still be allowed to consume heat-not-burn tobacco products in designated areas where food and drink can be consumed. 

"This could accelerate competition among heat-not-burn cigarettes," said Miura at Citigroup.

The tobacco industry has already taken action. Japan Tobacco launched the Ploom Tech product nationwide in June, having announced in February that it would invest 100 billion yen ($899 million) in the technology over the next three years.

Philip Morris Japan has announced that it will discontinue sales of conventional tobacco products, as the company's IQOS brand commands 80% of Japan's heat-not-burn tobacco market.

Both companies lowered their prices of heated tobacco products in June. The cost of a Ploom Tech device was cut to 3,000 yen from 4,000 yen, while that of an IQOS device came down by about 30% to 7,980 yen. British American Tobacco has launched a campaign selling its device for 2,980 yen, a price cut of almost 50%.

Sponsored Content

About Sponsored Content This content was commissioned by Nikkei's Global Business Bureau.

You have {{numberArticlesLeft}} free article{{numberArticlesLeft-plural}} left this monthThis is your last free article this month

Stay ahead with our exclusives on Asia;
the most dynamic market in the world.

Stay ahead with our exclusives on Asia

Get trusted insights from experts within Asia itself.

Get trusted insights from experts
within Asia itself.

Get Unlimited access

You have {{numberArticlesLeft}} free article{{numberArticlesLeft-plural}} left this month

This is your last free article this month

Stay ahead with our exclusives on Asia; the most
dynamic market in the world

Get trusted insights from experts
within Asia itself.

Try 3 months for $9

Offer ends June 30th

Your trial period has expired

You need a subscription to...

  • Read all stories with unlimited access
  • Use our mobile and tablet apps
See all offers and subscribe

Your full access to the Nikkei Asian Review has expired

You need a subscription to:

  • Read all stories with unlimited access
  • Use our mobile and tablet apps
See all offers
NAR on print phone, device, and tablet media