December 7, 2023
Leading cigarette firm British American Tobacco (BAT) has declared that it wants to become “smokeless” as it shifts to vapes.
BAT, which makes Dunhill and Vuse, said the rapid rise of vaping meant it would be writing £ 25billion off the expected value of its cigarette business in the next 30 years.
Publishing 2023 second half pre-close trading update, Tadeu Marroco, BAT Chief Executive, stated on Wednesday (6), “In 2023 we continue to expect another year of delivery in line with our guidance. I am encouraged by the strong performances of Vuse and Velo, delivering strong volume led revenue growth, and increased profitability. As a result, we now expect New Categories to be broadly breakeven in 2023, two years ahead of our original target.
“In combustibles, while the U.S. macro-economic environment remains challenging, I am encouraged that our commercial plans are starting to deliver early signs of portfolio recovery. In AME and APMEA we expect to deliver another strong revenue and profit performance, driven by the strength of our well-balanced portfolio of global brands. Together, this performance demonstrates the benefit of our global footprint, and multi-category strategy.
“To accelerate the next phase of our transformation journey, we are now committing to ‘Building a Smokeless World’. We will deploy our global multi-category portfolio to actively encourage smokers to ‘Switch to Better’ nicotine products, realising the multi-stakeholder benefits of ‘A Better Tomorrow’.”
Marroco added that BAT is committed to a multi-category strategy from the outset, recognising that consumer tastes and preferences are not homogenous.
“In less than a decade, we have built a portfolio of three powerful brands, Vuse, glo and Velo, delivering more than £3bn of revenue. After significant early-stage investment, we are delighted that we now expect our New Categories to be broadly breakeven in 2023, and to be profitable from 2024 onwards.”
BAT hopes to become a predominantly smokeless business, with 50 per cent of its revenue from non-combustibles by 2035.
This follows BAT’s call for tougher laws to stop the rise in young vapers and brands that target kids with sweet flavours.