Tokyo - Japan Tobacco said Monday domestic sales dipped 6.1 percent from a year earlier to 56.4 billion cigarettes in the December quarter, depressed by growing health concerns and rising prices.

The former government monopoly however left its sales and net loss forecasts for the year to March unchanged. JT's domestic sales in the first three quarters of the fiscal year also declined 5.1 percent to 169 billion cigarettes, said the world's third largest tobacco company and the country's sole tobacco producer. "Japan's aging population, growing health consciousness and the after-effects of the tobacco price hike due to the tax increase in July negatively affected cigarette demand nationwide," JT said in a statement. JT has a share of more than 70 percent in domestic sales. The statement said JT's overseas sales, combined with sales of international brands in Japan, fell 2.2 percent in 2003 from the previous year to 198.8 billion cigarettes mainly due to a continued decline in sales of low-priced products as the company is shifting its focus to "global flagship brands" (GFB) such as Camel, Winston, Mild Seven and Salem. In addition, total demand also declined due to tax increases in mature markets including Western Europe, JT said. But GFB sales worldwide expanded 7.1 percent to 117.5 billion cigarettes last year. For the year to March, JT left its estimates of group sales and net loss unchanged from forecasts made three months ago while upgrading its recurring profit forecast by 13.7 percent to ¥197 billion, "reflecting the development of cost reductions in its domestic tobacco business." But Japan Tobacco is expected to incur a one-off extraordinary loss of ¥10 billion due to an increase in employees accepting early retirement packages. As a result, the group expects to chalk up a net loss of ¥17 billion as previously estimated, plunging from a net profit of ¥75.3 billion in the preceding year. The group's sales forecast was left unchanged at ¥4.64 trillion, up 3.3 percent from the previous year. - AFP

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