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Japan's Smoking Population Drops To Record Low; Under 25%

TOKYO -(Dow Jones)- The percentage of smokers in Japan has fallen below a quarter of the adult population for the first time, with both men and women lighting up less, according to the results of a nationwide survey released Friday by Japan Tobacco Inc. (2914.TO).

In the annual survey, carried out in May by the world's third-largest tobacco producer by volume, 24.9% of respondents considered themselves to be smokers. The result is lower than last year's figure of 25.7%, and marks the lowest level since the company, known as JT, started compiling such data in 1965.

Japan had long been considered a smokers' paradise, with smoking rates hitting a peak of 49.4% in 1966. But the country has experienced a gradual decline in the number of smokers, due in part to an aging population, increased health consciousness and more stringent smoking regulations.

With slowing sales in Japan keeping a lid on revenue, JT is looking to gain a greater share of growing markets such as Russia and the Middle East, with its GBP7.5 billion purchase of U.K. tobacco maker Gallaher Group PLC. in 2007 falling within this strategy.

It is also seeking to diversify its sources of revenue to food and pharmaceuticals, as shown by its Y109.2 billion acquisition in 2008 of Japanese frozen food maker Katokichi Co.

The survey showed that the smoking rate among Japanese men declined to 38.9% from 39.5% in the previous year, while the rate among women dropped to 11.9% from 12.9%.

The JT questionnaire was mailed to 32,000 adult men and women, of which 20, 807, or 65%, responded.

In the global tobacco industry, JT is ranked third after Philip Morris International Inc. and British American Tobacco PLC.

-By Hiroyuki Kachi, Dow Jones Newswires; 813-6895-7562; hiroyuki.kachi@ dowjones.com

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