Wednesday, September 29, 2010

Japanese guys stocking up on cigarettes

As everyone in Japan knows, the price of a pack of cigarettes is about to jump 20% in a few days. That will bring the price of a pack of regular cigarettes to about ¥410 (about $4.80 USD pack). I'm sure glad that I quit smoking a few years ago. 

I smoked from 1998 to May 2009. Yes, I am lame. I didn't smoke at all until I became over 40-years-old. Interestingly enough, I got hooked on cigarettes during a five-week hospital stay in 1998.

How does one get hooked on cigarettes while staying in the hospital? This is Japan, there are still lots of hospitals that have smoking sections inside the hospital. The one where I got hooked on cigarettes had a smoking lounge that seated at least 100 people. While I was staying there, there was not much to do - couldn't really go out (it was winter) so us guys would sit around in the lobby and smoke cigarettes...

That is so Japan...

Back then, a pack of cigarettes cost ¥240 yen (about $2.80). The price of cigarettes has been steadily increasing by about ¥30 a pack every two years or so.

I got fed up with that nonsense and quit when cigarettes hit ¥300 per pack (about $3.60). I wrote about that and how you too can quit easily here.

Now, with the price of cigarettes about to skyrocket, Japanese people are stocking up. I was in my favorite grocery store the other day and over-heard two register clerks saying that they were out of several brands of major cigarettes and that was in the morning just after opening.

Some people are buying hundreds of cartons and storing them like gold. 

Yusuke Sato says a man walked into his tobacco store in Atsugi, southwest of Tokyo, 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 man is one of thousands of smokers across Japan stocking up before Oct. 1 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 would run out of stock,” said Sato, who started taking reservations for cartons last month. “Thirty cartons has been the norm.” Next month, customers would pay 110,000 yen ($1,300) more for the same 20,000-cigarette order after the price of a pack of 20 jumps by a third, he said.  

The headline of the Bloomberg article talks about how the Japanese government is benefitting from this "cigarette rush" due to a jump in tax income from sales.

I'm sure the government needs the money too since the economy is so bad...

But how long will this last?

I asked my best friend, Taro Furukawa, about it. Taro is 38-years-old and has been smoking since he was 14. In the last few years, he's been conserving cigarettes and sometimes smoking the same cigarette twice (he takes a puff then puts it out gently and returns it to the pack to smoke later - they taste rancid that way, but at least you get a nicotine rush, I used to do that too!). Taro is a hard core smoker - like many Japanese his age. Taro says he will not quit smoking even if cigarettes hit ¥1,000 (about $11) per pack!

Taro Furukawa

Taro went to the store and bought several hundred dollars of cigarettes at once... The amazing part is that everywhere in Japan is sold out of cigarettes. Taro had to place an order and wait one week. He will get his cigarettes tomorrow he said.

Taro says he will never quit smoking no matter what the price of cigarettes. Why? Because he likes to smoke.

I quit smoking almost 2 years ago and do not want a cigarette anymore... But I can understand why a guy likes to smoke.

If it helps him to relax and enjoy himself, then why not let him do it?

Life can be difficult enough as it is, full of stress, without having a one minute simple pleasure taken away.

But, after some more prodding, Taro admitted that his wife was not happy at all that his weekly cigarette allowance went from $21 to over $600 in one shot.

Taro said, "I might have to quit smoking at this rate..." If Taro thinks this, then there must be millions of other Japanese guys who think the same thing. Maybe this one time burst of spending helps Japan's GDP but it's going to end and, besides a huge decrease in cigarette taxes, we might see a huge increase in irritated Japanese men.

I hope not.   

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