August 1, 2018

 

Japan Tobacco Inc. (JT) traces its origins back to the former Tobacco Monopoly Corporation.

In the early Meiji period, the tobacco industry was privately operated.

However, under the policy of enriching the country and strengthening its military, the government at the time abolished private operation of the tobacco industry and established a monopoly (state-owned).

The revenue generated from there was allocated to military expansion.

In 1985 (Showa 60), Prime Minister Yasuhiro Nakasone abolished the Tobacco Monopoly Corporation and established JT, privatizing it.

However, even though it was privatized, it did not become a fully private company.

As it inherited the "tobacco industry as a national policy," it assumed legal obligations that could not be found in a pure private enterprise, while also receiving legal protection.

In other words, JT was allowed to monopolize the tobacco industry in exchange for being obligated to pay tobacco taxes.

The Ministry of Finance, which holds tremendous power in budgeting and tax policy even among the ministries and agencies in Kasumigaseki, also oversees tobacco administration.

Despite being privatized, JT, under the management of the Ministry of Finance, dominates the manufacture and sale of tobacco as a "national policy company."

Tobacco leaf farmers, whose productivity does not improve due to their reliance on the "full purchase" policy.

Tobacco retailers continue their business under government regulations.

And tobacco industry politicians work hard to maintain these vested interests.

These stakeholders in tobacco are intertwined and firmly connected by funds related to tobacco.

This is the huge and robust vested interest structure that exists in Japan.

As long as the tobacco vested interest structure exists, there will be no cessation of smoking promotion by the government.

Without breaking this vested interest structure, it is impossible to proceed with tobacco regulations to comply with the Framework Convention on Tobacco Control and protect the health of the people.

What is needed for this is the abolition of the "Tobacco Industry Law" and the "JT Law."

And the government should sell off all its shares in JT and fully privatize JT.

By abolishing these laws that stipulate placing all aspects of the tobacco industry under the control of the Ministry of Finance, it becomes possible to dismantle the legal foundation of the tobacco vested interest structure.

If JT is fully privatized and the full purchase system is abolished, tobacco leaf farmers will be forced to switch crops or go out of business.

Tobacco retailers are also likely to experience a decline in revenue.

But there's no need to worry.

The market capitalization of JT shares held by the government is approximately ¥2 trillion.

With the proceeds from selling these shares, support can be provided for tobacco leaf farmers to switch crops and for retailers to transition their businesses.

By abolishing the "Tobacco Industry Law" and the "JT Law," it will also be possible to enact tobacco regulations in accordance with the Framework Convention on Tobacco Control.

As part of this, it would be good to establish a "Passive Smoking Prevention Law."

And in the not-too-distant future, we had planned to put an end to discussions about tobacco expulsion and dream of the day when the "Tobacco Abolition Law" would be enacted to eradicate tobacco from Japan, but,・・・.

As a supplement, I will discuss the rapidly spreading "new tobacco" in the next issue.

 

To be continued