E-cigarettes: Japan Tobacco International

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Japan Tobacco International (JTI) entered the market for e-cigarettes (also known as electronic nicotine delivery systems, or ENDS) in 2011, when it took a minority share in United States (US) company Ploom Inc. (now known as JUUL Labs). It acquired UK-based e-cigarette company Zandera in 2014, and US company Logic in 2015. Since 2016 it has focussed on marketing its Logic e-cigarettes and as of September 2019 was selling the brand in 19 countries.12

JTI also has interests in heated tobacco products (HTPs), snus and nicotine pouches.  Like other companies, it has referred to its newer nicotine and tobacco products as ‘next generation products’ (NGPs), although its product terminology changes over time.

JTI currently refers to its e-cigarettes as “Reduced Risk Products” (RRP), sometimes preceded by the word “potentially”, as part of its strategy for “Building a Brighter Future”.3456

However, conventional tobacco products such as cigarettes remain central to JTI’s business. A 2019 presentation to investors made clear that the company’s strategy aimed to deliver returns “by strengthening conventional tobacco products, the main driver of our profit growth”.7

Image 1. E-Lites e-cigarette and charger (screen grab www.e-lites.co.uk, June 2014)

Acquired E-Lites and Logic

  • E-Lites Acquired UK e-cigarette company Zandera for an undisclosed amount in 2014.8910 E-Lites was one of the leading e-cigarette brands in the UK, and the first to be available in the four biggest supermarkets.11
  • Logic Acquired in July 2015, JTI described it as “the leading independent US e-cigarette company”.1213

From 2016, E-Lites was rebranded as Logic,13 although according to market research company Euromonitor International, E-Lites remain on sale in Eastern Europe.14

E-cigarette Products

Product Details
Logic Original ‘Cig-a-like’ resembling the original E-Lites device.15
Logic Curv A “refined” cig-a-like. Originally the E-Lites Curve, relaunched ‘Curv’ in 2015.16 Rebranded as Logic in 2016.
Logic LQD Open tank system (developed from the original Logic product), re-launched in the UK in December 2016 with an ad campaign on buses, TV and in cinemas.17
Logic Power A range of rechargeable as well as disposable ‘cig-a-like’ devices sold in the US since 2017.1819
Logic Pro Closed tank system, originally launched by Logic in 2014, using sealed capsules with multiple flavours (see below). An updated version, the Logic Pro 2, was released in Europe in 2018.20]21 It is also available in the US.22
Logic Compact Launched  in the UK in August 2018, with nicotine salt variation and different nicotine concentrations available in different countries (see below).323

While its manufacturing is mostly in China and Japan, in 2018 JTI opened a European factory in Gostkow, Poland, to manufacture e-liquids for both Logic and its HTPs.3

Product Innovation

Image 2. Logic Compact ‘Intense’ nicotine salt product flavours.24

Product innovation is a well-known technique to boost sales. Like other companies JTI regularly releases new flavours with names relating to fruit, sweets and deserts, and coffee, as well as tobacco (image 2). In 2022, JTI listed 18 flavours for Logic Compact capsules on its UK website, many available in different nicotine strengths, and 8 for Logic Pro.25

The Logic Compact is the only JTI device which uses the “Intense” range capsules containing nicotine salts (see Image 2), which are created when ‘freebase’ nicotine is dissolved in acid.26 This can make a higher dose of nicotine more palatable and so allow higher doses of more concentrated nicotine to be consumed. In the EU the highest permissible level of nicotine is 20mg/ml. Whereas other Logic e-liquids have a choice of nicotine level (6, 12 and 18mg/ml), ‘Intense’ capsules all contain 18mg/ml. On the product pages of JTI’s UK website, the Intense range is described as a “smoother, satisfying and enhanced experience”, and “perfect for experienced vapers”.24

In some of JTI’s markets, concentrations of 34 and 58/59 mg/ml are on sale.1

Key Markets

E-cigarettes containing nicotine are banned from sale in Japan. According to Euromonitor, before 2016, key markets for JTI’s e-cigarettes were the UK and US.27 JTI’s share of the global e-cigarette market was just under 3%.14

After E-Lites products were rebranded as Logic in 2016, the company started to expand sales globally.327 In 2018, JTI was the first multinational tobacco company to market an e-cigarette in Switzerland after the Swiss courts lifted a ban on sales.28 By the end of 2018, JTI was selling its products in 11 countries,3 and JTI’s e-cigarettes accounted for 75% of the value of the company’s trade in newer nicotine products (its HTPs having the smaller share).3 By 2018 JTI’s share of the global e-cigarette was just under 3%.27 Like the other international tobacco companies, JTI lost market share in the US to JUUL Labs between 2015 and 2018.27

The Logic Compact product variation appeared to be key to the company’s strategy with expansion planned for a further 13 countries in 2019, “prioritizing the markets that matter the most”.3 In 2019 JTI launched the product in Ireland, Romania, Russia, Canada, Portugal and Switzerland.12930

The device was also launched in Kuwait in April 2019, JTI’s first launch in the Middle East. Tobacco Asia quoted Roger Hambleton, JTI’s newer products brand manager in the Middle East, as saying that “there has emerged a genuine desire for RRPs [in Kuwait] and locals hold a strong belief in the potential health benefits of vaping”.1 In December 2019, JTI launched Compact in the United Arab Emirates (UAE).31

In September 2019, JTI launched Compact in New Zealand.1 At the time, tobacco companies in New Zealand, notably British American Tobacco and Imperial Tobacco, were reported to be aggressively marketing their products (including HTPs) in anticipation of possible regulation being introduced by the New Zealand government.32

By the end of 2019, the company reported that Logic was on sale in over 20 markets.3133 In its 2020 annual report JTI stated that 5 types of e-cigarette were on sale in 27 countries.34 However, while the global e-cigarette market continued to grow (see E-cigarettes), JTI’s share continued to fall, to 2.2% in 2019 and 1.5% in 2021,14 and Japan Tobacco said that it would “adopt a more selective investment posture”.34

In 2021 it reported that it had “prioritized Ireland, Poland, the U.K. and the U.S.”35  It is not clear if the company had withdrawn its products from some markets.

Advertising Strategy

Image 3. JTI’s launch of the Logic Compact in a pop-up ‘vaping lounge’, September 201836

As e-cigarette advertising has become more restricted, in Europe and elsewhere, tobacco companies have been forced to become more creative. JTI, like other companies, is increasingly using social media and influencers to promote its products.373839

The “Vapartment”

Promotion around the launch of Logic Compact, in September 2018, included a collaboration with UK fashion designer Pearl Lowe, who produced a case for the device. This was only available “as part of an online inclusive starter pack”.40 Lowe attended a launch party in a ‘pop-up’ vaping lounge, “the Vapartment” in a London venue associated with art and design, sustainability and healthy living (see image 3). It was held at the start of London Fashion Week, and the first 50 visitors were offered a free product if they provided their e-mail address. They could also try out the device in what was promoted as “the perfect alternate office environment”.36 The creative company who designed the event said that the media launch was followed by “3 days of consumer engagement and sampling, featuring DJ’s and influencers”.41

Retail “Champions”

JTI’s approach in the UK included specialist retail trade websites targeted specifically at shop owners, and recruiting “Logic Champions” to help them maximise their sales.42 It has also lobbied policy makers to limit regulation relating to its products, particularly in Scotland (see below).

For background information on e-cigarette promotion and marketing in the UK, go to Marketing and Marketing Rules.

Lobbying Regulators for Fewer Restrictions

The intended roll out of Logic products in the Middle East and Asia was restricted by existing regulation on e-cigarettes and an increasing number of outright bans, including in Japan.43 Denis Fichot, JTI’s RRPs Corporate Affairs Director, stated the company’s position on regulation to Tobacco Asia in September 2019:

“We advocate for open and regulated markets, because adult consumers should have the opportunity to opt for alternatives to [conventional] smoking”.1

He went on to say that a “a proportionate and evidence-based legislative framework” could help protect consumers and create a “level playing field for competition”.1

For detailed, up to date information at country level, see the searchable database on the Tobacco Control Laws website, published by the Campaign for Tobacco Free Kids (CTFK). For countries that are parties to the WHO Framework Convention on Tobacco Control (FCTC) progress towards implementation of relevant articles, including newer products, is detailed in the FCTC implementation database.44

Lobbying in Australia

JTI has lobbied for e-cigarettes in Australia, despite them being banned from commercial sale. In March 2019, JTI gave a written submission to a consultation on the review of tobacco control legislation in Australia. It urged the government to adopt different regulations for e-cigarettes, and other newer products, offering to “provide information on how tobacco control legislation could be improved in Australia to benefit public health” and cited Better Regulation principles.45

JTI had submitted a response to a previous enquiry in Australia in 2017, using the ‘consumer choice’ argument: “JTI believes in the freedom of adults to choose whether they wish to use electronic cigarettes and that no one should use them unless he or she understands the risks associated with doing so.”46

Lobbying in the UK

JTI has lobbied politicians in Scotland to promote its e-cigarettes and against regulation.

In October 2019, JTI sponsored a fringe event at the Scottish National Party conference. The event was titled “Where Next for Vaping In Scotland” with Scottish Members of Parliament (MSPs) listed as speakers.47 The session was chaired by John Lee from the Scottish Grocers’ Federation (SGF). JTI is a member of the SGF, which lobbies for industry interests in Scotland. In 2018 it attempted to set up a parliamentary group on harm reduction and SGF representatives have attended meetings with MPs and ministers working on tobacco control policy. For details see Scottish Grocers’ Federation. Numerous documented meetings between JTI and Members of the Scottish Parliament (MSPs) since November 2018 relate, at least partly, to e-cigarettes and other newer products.48

JTI is a member of the UK Vaping Industry Association (UKVIA) and has a position on the board.49 UKVIA lobbied against e-cigarette regulation at the 8th WHO FCTC Conference of the Parties (COP 8) in 2018.

TobaccoTactics Resources

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