Let's Eliminate Tobacco from Japan, Part 16

July 1, 2018


JT (Japan Tobacco) serves as a significant post-retirement haven for financial bureaucrats, while the Ministry of Finance also functions as an upper echelon for JT.

There is complete collusion between the Ministry of Finance and JT in terms of personnel.

There are other problematic points as well.

JT can expand its business beyond tobacco with the approval of the Minister of Finance.

If JT, which can be considered a state-owned enterprise, arbitrarily broadens its business scope, it would stifle private industry.

This deviates from the principle of ensuring equal competition among enterprises, and so it is unacceptable.

The general public does not know this vested interest structure and tends to think that JT is a completely privatized, self-sufficient company, but this is entirely superficial.

As long as the "Tobacco Business Act" and the "JT Act" exist, JT will remain a state policy company aimed at protecting the tobacco industry.

Tobacco tax revenue exceeds 2 trillion yen.

The Ministry of Finance does not want to let go of tobacco as it is a valuable source of revenue.

Additionally, as the largest shareholder of JT, the Ministry of Finance receives 30 billion yen in dividends annually.

This is why the Ministry of Finance is reluctant to regulate tobacco.

The Ministry of Finance is concerned that tobacco regulation will reduce tobacco consumption, thereby decreasing tobacco tax revenue and dividends.

To defend this source of revenue, the Ministry of Finance has taken control of the entire domestic tobacco industry, built a collusive relationship with politically influential "tobacco-affiliated legislators," and solidified the vested interests.

"Tobacco-affiliated legislators" is a general term for legislators elected from tobacco-producing regions or those supported by JT labor unions and tobacco retailers' associations.

They engage in political activities to protect the vested interests of stakeholders, that is, the tobacco interests.

On the other hand, the "Tobacco Cultivation Association," composed of leaf tobacco farmers, continues to demand that the tobacco-affiliated legislators maintain the contract in which JT buys all domestically produced leaf tobacco to support farmers' businesses.

They also seek to maintain the high price of domestic leaf tobacco, which is over three times the international price, and for the government to continue holding JT stocks.

In return, the "Tobacco Cultivation Association" has supported tobacco-affiliated legislators in elections.

Furthermore, JT accepts former Ministry of Finance officials as post-retirement positions while sending them upward in return, thus maintaining a mutually beneficial cooperative relationship under the control of the Ministry of Finance.

In this way, centered around the Ministry of Finance and JT, tobacco-affiliated legislators, leaf tobacco farmers, and retailers are firmly connected through the flow of funds related to tobacco.

This is the tobacco vested interest structure.

There is no perspective or concept of public health here.

All that exists is the securing of tobacco tax through maintaining sales volumes and the preservation of vested interests in production and distribution cultivated since the Meiji era.


To be continued in the next issue