Tag: bat

BAT Chief Says US Needs Crackdown on Illegal Vapes

Credit: Iama Sing
A surge of illegal vaping products originating from China is negatively impacting the sales of legal alternatives to cigarettes in the U.S., according to the CEO of British American Tobacco.
Tadeu Marroco advocated for stricter penalties for individuals importing unauthorized vapes into the U.S. “What we are seeing with the lack of enforcement is a reduction of the legal market of vapor,” the CEO said.
BAT is one of the tobacco producers waiting for the U.S. Food and Drug Administration’s long-delayed completion of its review of marketing applications for vaping products. BAT is a major player in the vaping industry worldwide and in the U.S. with its Vuse brand.
The delay is leading manufacturers of illicit products to take advantage of the uncertainty by continuing to sell them, Marroco said. The FDA needs to “decide publicly what are the products that are allowed to stay in the market and the products that need to be taken out of the market,” he added, according to Bloomberg.
The FDA and the U.S. Department of Justice have formed a federal task force spanning multiple agencies to stop the distribution of illegal e-cigarettes. As of early June, the FDA had issued 1,100 warning letters to makers, importers and distributors of unauthorized new tobacco products, including e-cigarettes, and fined more than 55 manufacturers and 140 retailers.
BAT has launched two claims with the International Trade Commission, one related to patent infringement and another about the importation and marketing practices of illegal vapes.
The company reported first-half results earlier Thursday, in which it said it’s unlikely to hit a £5 billion ($6.4 billion) revenue target in 2025 for vapes, heated tobacco and nicotine pouches, blaming the lack of a U.S. clampdown on illicit products.
July 25, 2024
BAT Reports First-Half Results, Revenues Down

Photo: BAT
British American Tobacco reported revenue of £12.34 billion ($15.88 billion) for the first half of 2024, down 8.2 percent from the comparable 2023 period. The decline was driven by unfavorable currency exchange rates and the sale of BAT’s businesses in Russia and Belarus following Russia’s invasion of Ukraine.
Reported revenue from new category products, which include vapes, heated tobacco and nicotine pouches, declined 0.4 percent to £1.65 billion. Smokeless brands now account for 17.9 percent of BAT’s group revenue, up 1.4. percentage points from fiscal year 2023
Profit from operations was £4.26 billion on a reported basis, down 28.3 percent from the first half of 2023. BAT attributed the decline to its December 2023 decision to write down the value of some of its traditional cigarette brands in the United States to reflect the diminishing outlook for combustible tobacco products, along with its exit from Russia and Belarus.
The company said it’s unlikely to hit its £5 billion revenue target in 2025 for new category products, blaming fierce competition from illicit vapes in the United States. The U.S. accounted for more than 40 percent of BAT’s revenues in 2023, primarily from traditional tobacco products, according to Reuters.
Tadeu Marroco
In a statement, BAT CEO Tadeu Marroco welcomed the U.S. Food and Drug Administration’s recent marketing authorization of its Vuse Alto device and tobacco flavor consumables, but expressed concern about the continued lack of enforcement against unauthorized single-use vapes, which makes it difficult for authorized brands to compete in that market.
Nonetheless, Marroco said BAT is on track to deliver its full-year guidance. “Focusing on ‘quality growth’ is delivering better returns on more targeted investments across all three new categories,” he said. “In H1 2024, we increased organic new category contribution by £165 million—at constant rates—and I am particularly pleased with the growth of modern oral. We expect to deliver further improvement in revenue and profitability across our new categories for the full year.”
July 25, 2024
Reynolds Launches Disposable Non-Nicotine Vape

Credit: Casimiro
R.J. Reynolds Vapor Company (RJRVC), an operating company of Reynolds American Inc. (Reynolds American), the BAT Group’s U.S. subsidiary, announced today that it is expanding its innovative vapor portfolio with SENSA, a zero-nicotine vapor product.
As the market leader in vapor with its Vuse products, RJRVC is joining the growing marketplace for zero-nicotine vapor products and aims to establish the highest standards in the industry, according ot an emailed press release.
SENSA products include a locking feature to prevent unintended usage, and adult consumers of the device will have access to Call2Recycle’s battery recycling program, which will facilitate the responsible disposal of SENSA batteries.
“Adult tobacco and vapor consumers across the retail marketplace are looking for more options,” said Valerie Mras, senior vice president for RJRVC. “Adding a zero nicotine product to our growing vapor portfolio is driven by deep adult vapor consumer insights and enables us to responsibly compete within a category that is already well established in many countries.”
The SENSA portfolio of flavors is intended for adult tobacco and vapor consumers and does not include flavors intended to appeal to those underage. The product will be responsibly marketed to adult tobacco and vapor consumers, consistent with the Reynolds American organization’s marketing practices for tobacco and nicotine products, according to the release.
SENSA is intended to be sold only to adult tobacco and vapor consumers 21 and older; marketing touchpoints will be adult-oriented, and all web properties will be age-gated.
July 1, 2024
BAT Opens Innovation Center for Reduced Risk Products

BAT has opened a new state-of-the-art Innovation Centre at its global research and development (R&D) headquarters in Southampton. The center will be key in continuing the company’s transformation as it builds “A Better Tomorrow.”
The £30 million ($38.55 million) facility strengthens and deepens BAT’s R&D capabilities. It provides nine specially designed technical spaces to aid the development of BAT’s portfolio of Reduced Risk Products, according to a press release.
These spaces are dedicated to researching modern oral nicotine pouches, liquids, and flavors for vapor products, heated tobacco products, and well-being and stimulation beyond nicotine. The investment will also support work on packaging, engineering, innovation development, and system integration.
“The opening of this new facility marks an important milestone in BAT’s transformation and will play a key role in making a smokeless future a reality. Evidence provided by objective world-class science is essential to facilitate the migration of adult smokers to smokeless products and support public health objectives,” said James Murphy, BAT’s director of Research and Science. “The investment in our Innovation Centre will support the cutting-edge research and product development efforts of our global R&D team for many years to come.”
The new facilities will bring together cross-functional and key R&D teams – with 400 specialized scientists and engineers drawn from various advanced fields, including biotechnology and clinical trials. Intended to accelerate the development of the next generation of BAT’s New Category products, their work includes developing the robust scientific evidence necessary to encourage adult smokers to switch to less risky alternatives.
To date, R&D carried out in BAT’s Southampton facilities has produced over 200 peer reviewed studies for smokeless products published in scientific journals and has contributed to BAT’s filing of hundreds of patents a year. BAT is listed as one of the top patent filers in Europe as the company continues to develop smokeless products.
The new Innovation Centre is the latest example of BAT’s commitment to invest in the highest standards of scientific research and product development to support its ambition to reduce the health impact of its business and deliver “A Better Tomorrow.”
BAT’s refined strategy has committed the company to “Building a Smokeless World” and becoming a predominately smokeless business, with 50 percent of revenue generated from Non-Combustibles by 2035.
BAT’s site in Southampton, the home of its R&D operations since 1956, is one of the largest employers in the region, with over 1,000 current employees drawn predominantly from across the UK, and a local supply chain with over 25 suppliers based within a 30-mile radius.
The company’s UK operations support 7,100 jobs across the wider economy and contribute over £300 million to the UK’s GDP. The opening of the Innovation Centre exemplifies BAT’s commitment to and ongoing investment in the UK, marking the first stage of an eight-part, multi-phase refurbishment program for BAT’s entire Southampton campus.
Globally, BAT has over 1,600 R&D specialists spread across the UK, US, Brazil, Indonesia, Malaysia and China. The £30 million investment in the Southampton facility follows the opening of BAT’s Innovation Centres in Trieste (Italy) in 2021 and in Shenzhen (China) in 2022, and an investment of £300 million a year in R&D to develop New Category products and establish substantiation of their reduced risk potential.
March 11, 2024
Analysts: U.K. Vape Tax Good for Tobacco Stocks

Image: Monster Ztudio
Citi analysts have identified the UK government’s new excise tax on vaping products as an encouraging development for British American Tobacco PLC and Imperial Brands PLC.
The Chancellor, Jeremy Hunt, confirmed in his Spring Budget speech that vaping products would be subject to a new tax from October 2026. According to media reports, this move is designed to maintain a financial incentive for choosing vaping over smoking, complemented by a concurrent increase in tobacco duty, according to media reports.
The taxation framework will be based on nicotine content, with a three-tiered system imposing charges ranging from £1-3 per 10ml, in addition to the current 20 percent VAT.
This structured approach aims to regulate the vaping market further and aligns with the government’s health strategy by providing a less harmful alternative to traditional smoking.
Citi’s short research note said: “Although [Wednesday’s] confirmation of the planned levy on vaping comes as little surprise, we believe that alongside the proposed ban on disposable vapes from April 25, the regulatory risk/reward is skewing to the upside for both BATS and Imperial.”
March 7, 2024
BAT Calls for ‘More Stringent’ Regulations on Vaping

BAT has called for “more stringent” regulations on vaping, including a licensing regime similar to alcohol and cigarettes.
The London-based e-cigarette and traditional tobacco manufacturer also wants a ban on flavors that “uniquely” target children.
The UK government is already considering new regulations amid concerns that many young people are vaping, according to the BBC.
It has promised legislation following a public consultation that is currently underway.
BAT is the third-largest seller of vapes in the UK, according to market research firm NielsenIQ.
It sells Rothmans and Lucky Strike cigarettes and is the most successful of the big western tobacco companies in the UK’s booming market for disposable vapes, thought to be worth at least £3 billion ($3.78 billion) a year.
BAT is calling for vape sellers to be licensed and for licenses to be taken away from firms caught selling to minors. You must be 18 to buy vapes in the UK legally.
The company also wants a ban on soft drinks and sweet or dessert flavors such as gummy bears or cotton candy, which it says appeal “uniquely” to the young.
BAT doesn’t sell these flavors, though they have been a factor in the success of market leader Elfbar, the number two, SKE, and other brands.
November 27, 2023
BAT Invests Another $90.5 Million in Organigram

Credit: Roxxy Photos
Organigram Holdings Inc. has extended its relationship with British American Tobacco. The move boosts the Canadian cannabis producer’s financial strength and positioning it to expand globally.
Organigram said in a statement that BAT is investing a further $90.5 million in the business, building on an initial $160 million injection back in 2021.
Organigram said the investment will allow it to extend its footprint beyond Canada, and also strengthen its financial position for long-term, sustainable growth, according to media reports.
“This investment bolsters an already strong balance sheet and solidifies our position as a leading cannabis company,” said Beena Goldenberg, chief executive of Organigram.
The firm said the deal enables it to invest in growing the topline of its core business, while optimizing operations to deliver on cost-saving efficiencies, thus accelerating earnings growth.
Organigram will use the majority of the investment to create a strategic investment pool, named Jupiter.
Jupiter will target investments in emerging cannabis opportunities that will enable Organigram to apply its industry-leading capabilities to new markets, it said.
November 8, 2023
BAT Germany Selects Arvato as Vape Logistics Provider

Credit: Timon
BAT Germany has selected Arvato as its logistics and fulfillment partner for its e-commerce operations encompassing e-cigarettes and heated tobacco products.
Since the end of June, BAT Germany online orders have been processed centrally from the site in Marienfeld, Guetersloh district. At this site, Arvato, a leading supply chain and e-commerce service provider, operates a state-of-the-art distribution center spanning approximately 32,000 square meters, serving multiple clients in the technology sector, according to the American Journal of Transportation (AJOT).
The comprehensive logistics services provided for BAT Germany at the facility encompass goods receipt, storage, order picking, packing, and shipping, as well as returns management.
“BAT’s goal in awarding the e-commerce logistics contract was to guarantee the most efficient and fastest delivery service for its customers. Our customer-centric approach allowed us to accommodate BAT’s specific processes and requirements,” says Thomas Becker, executive vice president at Arvato.
The logistics service provider commits to delivering within a 48-hour timeframe. To optimize warehouse operations for efficiency and speed, Arvato heavily integrates automation technology. Automated carton setup and closure processes significantly enhance the speed of operation. Moreover, product information is automatically included with orders through flyer dispensers.
“With its experienced team, Arvato provided us with very flexible and reliable support in setting up our logistics and distribution concept,” confirms Robert Juhnke, distribution manager at BAT Germany. “Even throughout the offer and final negotiation phase, the collaboration has been exceptionally cooperative.”
Sustainability is a growing trend in the vaping industry. Arvato is dedicated to doing its part, according to the AJOT story. In an effort to reduce plastic waste, the company adopted wet adhesive tape made from recycled paper, resulting in the annual saving of approximately 16 tons of plastic, as an alternative to polypropylene adhesive tape. Arvato’s approach to optimizing shipment sizing and processing minimizes the consumption of packaging materials.
October 31, 2023
BAT Uses Rooibos Tea in Heat Sticks for IQOS

BAT has begun selling heat sticks made from nicotine-infused substances such as rooibos tea to counter an incoming EU ban on flavored heated-tobacco products, according to Reuters.
Health experts have warned that the safety of the new products is unclear.
BAT has launched heat sticks containing nicotine-infused rooibos tea rather than tobacco in nine European markets, including Germany and Greece. The company plans to roll the product out globally.
BAT stated that the move will provide “adult nicotine users and smokers with the widest possible range of reduced-risk products.”
“Anything that burns or is vaporized … and inhaled into the lungs, probably will cause some effects,” said Erikas Simonavicius, a research associate at King’s College London, of the unknown risk factors of the tea-infused heat sticks. Tobacco companies have not yet published any research showing the health implications of rooibos or other zero-tobacco heat sticks, said Simonavicius.
BAT is the first big tobacco company to publicly state what its zero-tobacco sticks are made from. The company declined to comment on whether it had conducted research on the health implications of the product.
Philip Morris International plans to roll out a zero-tobacco stick later this year, according to statements made during the company’s investor day in September. PMI declined to comment on what the product is made from or its health implications.
According to Jacek Olczak, PMI CEO, the company’s product could avoid the regulatory scrutiny of tobacco products.
According to BAT, its new zero-tobacco heat sticks are not subject to EU tobacco rules, meaning the company can sell its sticks in flavors even after a ban on flavored heated-tobacco products is implemented later this month.
“The obvious advantage these new products should provide is a way to keep menthol and flavor varieties on the EU market,” said Owen Bennett, a Jefferies analyst.
Experts do not think the regulatory advantages will last long, however, according to Bennett and Phil Gorham, senior equity analyst at Morningstar.
“The next generation of regulation is going to target nicotine,” Gorham said.
October 16, 2023
GTNF 2023: BAT Outlines 5-Step Vapor Rules Plan

BAT has released a blueprint for how regulators and governments could better regulate vapor products and help smokers switch to less risky products.
During DTNF 2023, held from Sept 18-20 in Seoul, BAT’s Global Head of Business Communications, Jonathan Atwood, told attendees how BAT’s five-step plan for regulation could support achieving the right balance between harm reduction and the unintended consequences of access, including underage use.
Speaking on behalf of Kingsley Wheaton, BAT’s Chief Strategy & Growth Officer, Atwood said that reckless players in the market need to be penalized when they do not abide by the rules. He said the five suggestions are the areas that regulators should explore and establish “smart regulation” that is right for their market.
“First, on-device technology and functionality: vapor products should be accessible only to adults. Both underage prevention and restriction is crucial. On-device technology, when applied and enforced across entire markets, could help in this regard.
“Second, more recognition is needed that flavors are an important driver of adoption for smokers seeking alternatives. However, flavors in vapor products should not particularly appeal to anyone underage.
“Third is at the manufacturing and import level: ensuring that non-compliant products cannot reach the market in the first place.
“Fourth, where no restrictions exist already, regulators may want to look at who should be able to sell vapor products and where. Reasonable safeguards at the point-of-sale would help ensure these products are sold only to adult consumers. Solutions such as retail licensing and facial recognition technologies should be seriously considered.
“Lastly, enforcement and penalties: governments must wield their power and ensure consumers are purchasing legitimate products. Such measures should be rigorously enforced and those who fail to comply should face meaningful sanctions.”
Atwood said BAT was calling upon governments, regulators, and industry peers to rally towards a sustainable and progressive environment in which vaping products are sold and marketed responsibly.

September 19, 2023