TOKYO — Yusuke Sato says a man walked into his tobacco store in Atsugi, southwest of the Japanese capital, this month and bought 100 cartons of Mild Seven cigarettes. While they may not be good for his health, he may have saved $1,300.
The buyer is one of thousands of smokers across Japan stocking up before Friday to beat a record 40 percent tax increase on tobacco.
Their hoarding may add as much as 1.4 percentage points to this quarter’s annualized economic growth rate, according to estimates from the Japan Research Institute.
“We were afraid we’d run out of stock,” said Sato, who began taking reservations for cartons in August. “Thirty cartons has been the norm.”
Japan is the fourth-largest market for the world’s tobacco makers after China, the United States and Russia.
Japan Tobacco is raising prices on 103 of its 105 brands in October. A pack of its flagship brand Mild Seven will cost $4.88, up $1.31, as the government will raise the duty by 4 cents a cigarette and tobacco companies will charge an extra 2 cents each. That’s still less than half the $10.80 average price for a pack in New York City.
Former Prime Minister Yukio Hatoyama proposed the tax increase last year to discourage the habit in a country where 36.6 percent of men and 12.1 percent of women smoke, according to Japan Tobacco.
