Japan Tobacco Starts Petition Against Cigarette Tax Increase

Oct. 1 (Bloomberg) -- Japan Tobacco Inc., the world's third- largest publicly traded cigarette maker, will enlist customers in a campaign to stop the government from raising cigarette taxes.

Consumers opposed to the proposal to increase retail cigarette prices by as much as threefold should fill in a petition at tobacco retailers, by mobile phone or on the Internet, the Tokyo-based company, which is 50 percent owned by the government, said today.

The campaign comes as the maker of Camel and Mild Seven cigarettes battles higher tobacco prices, a falling smoking rate and controls on vending-machine purchases that account for more than half its $31.4 billion in domestic tobacco sales. Lawmakers in June proposed raising taxes on cigarettes, which sell for less than a third of the U.K. price, to fund rising welfare costs.

``A tax increase could destroy Japan's tobacco industry,'' President Hiroshi Kimura told reporters in Tokyo today. ``It's unfair to increase tobacco tax to raise general revenue.''

Higher taxes could quicken a decline in cigarette sales in Japan, where the percentage of men who smoke has fallen by half over the past 40 years to about 40 percent because of an increase in health consciousness. Japan Tobacco's operating income from cigarette sales in the country slid 9.4 percent to 222 billion yen ($2.1 billion) in the 12 months through March.

Japan Tobacco said it will submit its petition to the government after the campaign, which the company plans to end in December, in time for the Japanese government's internal discussions on proposed taxes.

To contact the reporter on the story: Maki Shiraki at in the Tokyo or at mshiraki1@bloomberg.net

To contact the editor responsible for this story: Frank Longid at flongid@bloomberg.net