Japan Tobacco Wants Fewer of Nation's Farmers to Grow Crop

Source from:  Bloomberg News 08/05/2004

Japan Tobacco Inc., the world's third- biggest cigarette maker, is asking half of the country's almost 19,000 tobacco farmers to stop growing the crop because Japanese are smoking less. The company's domestic sales may decline 4 percent to 210 billion cigarettes this year from 218.3 billion last year, according to spokeswoman Yukiko Seto. Japan Tobacco is required by law to purchase all domestically grown tobacco leaf. As stricter anti-smoking laws and higher taxes cut cigarette demand, the Tokyo-based company is expanding its food and beverage businesses. It will ask 9,700 farmers to consider ending cultivation as it closes 14 cigarette factories. "Cigarette consumption is declining and we see this as a trend," Seto said in an interview. "That's why we are asking some producers to stop growing the crop." Farmers can decide whether to stop growing tobacco by February 2005. Japan Tobacco plans to compensate them if they end cultivation. This is the first time the company has asked growers to end production, Seto said. The cigarette maker is trying to raise sales in Russia, Turkey and other countries where the number of smokers is increasing. Enditem