AIthough during the financial year to March 31, 2003 (FY2003), Japan Tobacco Inc enjoyed growth in the sales of its 'global flagship brands' (GFBs) outside Japan, its total volumes were negatively affected by weak demand for its non-GFBs and, generally, on its domestic market. And the rate of decline in domestic demand is set to accelerate during FY2004 as consumers take stock of the first tax increase on cigarettes since December 1998. JT forecasts that the 11.6% tax increase due to be introduced on July 1 will cause a 5.2% fall in its domestic cigarette volumes, equivalent to 12bn pieces. And this is despite the fact that the tax rise was reduced, from the ￥2.00 per cigarette initially proposed, to ￥0.82, following lobbying by JT, tobacco growers and retail groups,
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