Tobacco giant BAT reports ‘disappointing’ US cigarette sales but gains vapers

British American Tobacco insisted its strategy has not changed since new boss Tadeu Marroco took over last month.

Anna Wise
Tuesday 06 June 2023 08:19 BST
British American Tobacco has hailed gaining 900,000 customers using new products like vapes during the first quarter (Jason Alden/PA)
British American Tobacco has hailed gaining 900,000 customers using new products like vapes during the first quarter (Jason Alden/PA) (PA Media)

Your support helps us to tell the story

From reproductive rights to climate change to Big Tech, The Independent is on the ground when the story is developing. Whether it's investigating the financials of Elon Musk's pro-Trump PAC or producing our latest documentary, 'The A Word', which shines a light on the American women fighting for reproductive rights, we know how important it is to parse out the facts from the messaging.

At such a critical moment in US history, we need reporters on the ground. Your donation allows us to keep sending journalists to speak to both sides of the story.

The Independent is trusted by Americans across the entire political spectrum. And unlike many other quality news outlets, we choose not to lock Americans out of our reporting and analysis with paywalls. We believe quality journalism should be available to everyone, paid for by those who can afford it.

Your support makes all the difference.

British American Tobacco (BAT) has hailed gaining 900,000 customers using new products like vapes in its first financial quarter, amid plans to encourage smokers away from traditional cigarettes.

But the company admitted it saw a “disappointing” performance in the US for cigarette brands like Camel, and an “underwhelming” start to the year for its Glo e-cigarette brand.

The FTSE 100-listed group has been steaming ahead with growing its portfolio of so-called reduced-risk products, which includes vapes, e-cigarettes and nicotine pouches.

It said it is on track to make £5 billion in revenue from tobacco alternatives by 2025 and for the category to be profitable by 2024.

Our performance in US combustibles has been disappointing

Tadeu Marroco, BAT

New chief executive Tadeu Marroco insisted that BAT’s strategy has not changed since he took over at the helm last month, and pledged to reduce the “health impact” of the business.

“Put simply, smokers must have access to better choices,” he said.

“This is already a reality for smokers who have made the switch to our reduced-risk products. It also represents a commitment to our consumers who continue to smoke and are yet to make that transition.”

Nevertheless, he said that traditional cigarettes, known as combustibles, are a critical part of the group’s “multi-category strategy” in the US.

Mr Marocco added: “Our performance in US combustibles has been disappointing. We are taking action, and, while it will take some time to carefully and thoroughly implement our plans, our volume share has grown sequentially since the start of the year.”

Outside the US, BAT said its cigarette brands like Lucky Strike and Dunhill have been performing well after it raised prices.

BAT’s e-cigarette brand, Glo, also saw a slow start to the year with its volume share down 1.1 percentage points over the first quarter.

Sales momentum in Europe was offset by highly competitive e-cigarette markets in Japan and Italy.

The global tobacco industry volume is expected to decline by around 3% in the year ahead, BAT said.

But the firm expects to see organic revenue growth across its own products of 3% to 5% for the 2023 financial year.

It predicts its performance will be weighted in the second half of the financial year, with sales affected by the sale of its Russian and Belarusian businesses set to close this year.

The firm stuck by its guidance for the financial year.

Thank you for registering

Please refresh the page or navigate to another page on the site to be automatically logged inPlease refresh your browser to be logged in