While most tobacco companies have embraced smokeless products to survive ever-tightening controls, the Japanese maker of Winston and Camel cigarettes is pressing ahead with a more low-tech strategy: Selling smokes to emerging markets.
Japan Tobacco Inc., whose domestic market is predicted to shrink 27 percent in the decade through 2021, announced Tuesday plans to buy a second Southeast Asian rival to expand in a region where cigarette prices are lower, smoking rates are higher, and the population is growing.
The $1.6 billion (about ¥174 billion) that the Tokyo-based company said this month it will spend on acquiring traditional cigarette makers is at odds with a global industry shifting away from such products. The U.S. Food and Drug Administration said last month it intends to regulate the level of addiction-causing nicotine in tobacco products. Japan Tobacco, which has fallen behind in the market for next-generation alternatives, is betting emerging markets will take longer to respond to global efforts to prevent tobacco-induced harm, providing opportunities for growth.
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