Japan Tobacco (JT) is planning to stop the production and sale of JT beverage products by September end due to tough market conditions.

JT, which entered the beverage business in 1998, produces Roots canned coffee and Momono Tennen-sui flavoured bottled water.

The company claims that the operating environment of the country’s beverage business has become increasingly challenging as the market has matured and expanding business scale within a short time is not possible.

The Wall Street Journal reports that the domestic demand for drinks has reached saturation level due to decreasing population in the country.

Additionally, the increase of sales tax by the government in April 2014 curbed consumer spending.

JT executive deputy president Noriaki Okubo was quoted by the publication as saying: "It has been difficult to obtain customers, and competition has become more intense, as the scale of the business has become more important."

The company claims that its beverage products business has generated around JPY50bn ($425m) in the fiscal year ended 31 March 2014.

Japan Tobacco will continue to operate its two vending machine subsidiarie. However, it plans to explore options to sell these units as well.

The company intends to focus on tobacco, pharmaceutical and processed food businesses.