JT to End its Beverage Business Owing to Lack of Scale

Published By : 04 Feb 2015 | Published By : QYRESEARCH

Japan Tobacco Inc., also known as JT, is getting out of the beverage industry after deteriorating to attain the scale in the grown-up domestic soft drinks industry, and as the previous state monopoly targets on its abroad tobacco operations.

JT, famous for its Roots, which is a canned coffee product and Momono Tennen-sui, which is flavor bottled water in Japan, stated on Wednesday that it will finish the manufacturing and sales of the beverages by the end of September, 2015. The decision taken by JT could drive moves for the consolidation in the Japanese beverage market, wherein the industry officials state too many participants vie for ledge space and vending machine windows.

Executive deputy president of JT, Mr. Noriaki Okubo, stated in a news conference that seller favored only the best products in all beverage categories and that competition was on the rise owing to the insistent promotional efforts of organizations in pursuit of scale. He said that they are not in one of the top market places. The beverage business of JT is the tenth largest market in terms of domestic sales volume, holding only 1.6% of the Japanese beverage market, as stated in a release by business magazine publisher, Inryosouken.

It has been outshined by giant rivals such as Suntory Beverage & Food Ltd and Coca-Cola Co., which had domestic market shares of 20.5% and 27.6%, in 2014, respectively. The beverage manufacturing and sales of JT generated about US$425.68 million that is 50 billion yen, of revenues for the previous fiscal year.
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