Tag: bat

  • A Platform for Dialogue

    A Platform for Dialogue

    Photos: BAT

    With its Omni tool, BAT has released a dynamic, science-based guide to tobacco harm reduction.

    By Stefanie Rossel

    The concept of tobacco harm reduction (THR) dates back to at least 1976, when Michael Russell made his famous statement that people smoke for the nicotine but die from the tar and suggested that altering the ratio of tar to nicotine could be the way to safer smoking. Almost 50 years on, there is an extensive array of less hazardous alternatives to combustible cigarettes, but misconceptions about nicotine and reduced-risk products (RRPs) continue to be so pervasive that the R Street Institute last year even published a list with the 10 most common misperceptions, arguing that over the past decade, an overwhelming onslaught of misinformation from academics, media outlets and public health agencies had created confusion and significantly slowed THR activities.

    BAT has set out to overcome these misunderstandings with a new tool. At its first-ever Transformation Forum, which took place in London in September, the company introduced Omni, an evidence-based, accessible and dynamic knowledge resource that shows how science and innovation can converge to achieve a smokeless world.

    Under its “A Better Tomorrow” strategy, the company aims to migrate adult smokers who would otherwise continue to smoke from cigarettes to smokeless products and to ultimately consign cigarettes to the dustbin of history. On its transformation journey, however, the company has faced several challenges, including the rejection of THR by key regulatory bodies and nongovernmental organizations, markets that prevent the sale of RRPs, onerous regulatory frameworks that hinder innovation, skepticism toward industry research as well as the already-mentioned misperceptions about nicotine and the relative risks of combustion-free products.

    James Murphy

    Omni, BAT states on its website, is intended to be a compendium of information that underpins the company’s corporate and scientific strategy and offers insights into the work being done at BAT to achieve a world without cigarettes. “The world’s first-of-its-kind resource, Omni explains why THR should be a prominent component of the public health strategy on tobacco,” says James Murphy, director of research and science at BAT. “It draws from hundreds of independent scientific studies, BAT’s own research into its smokeless innovations, and examples of THR in action globally. Beyond that, Omni serves as a dynamic platform for thoughtful, constructive conversations with stakeholders rooted in evidence, where open dialogue around THR is not just welcomed but encouraged.”

    Omni differs from BAT’s Science website, which focuses on the innovations driving the company’s business, Murphy points out. The Science website “serves as a hub for publishing data and peer-reviewed research on our smokeless products such as Vuse, VELO and Glo. The website also provides insights into our global research and development network, which comprises 1,750 R&D specialists across eight different sites worldwide. The emphasis here is on showcasing the science behind our products rather than facilitating discussions on THR policy,” says Murphy.

    Engaging All Stakeholders

    Kingsley Wheaton

    Omni is targeted at scientists, public health authorities, regulators, policymakers and investors, and it aims to spur a dialogue across the wider scientific and regulatory ecosystem related to tobacco and nicotine products. Across nine chapters, it addresses the big questions that the company and the tobacco industry in general are confronted with, among them classics such as what exactly tobacco harm reduction means, whether smokeless products are a gateway to cigarette smoking or what the role of flavors in smokeless tobacco and THR is.

    “We believe that open and constructive dialogue with a broad range of stakeholders is crucial for accelerating the decline in global smoking rates,” says Kingsley Wheaton, BAT’s chief corporate officer. “It is incumbent on regulators, scientists and policymakers to review the scientific and real-world evidence on THR and engage in dialogue on how to encourage smokers to switch completely to smokeless alternatives with a reduced-risk profile. Unfortunately, there are few spaces where these groups can review such evidence and reach common ground on THR science to drive progress.”

    According to Wheaton, Omni demonstrates that the evidence in support of THR is growing daily. “Sweden, which is on the brink of becoming smoke-free, has the lowest adult smoking rates and lung cancer deaths in Europe, which has attributed to the availability, affordability and increased use of smokeless tobacco and nicotine products,” he says. “Yet there is still significant debate on whether THR strategies should be used to reach global smoke-free targets, and more countries are restricting the sale of smokeless alternatives. Our hope is that Omni becomes the platform to engage these stakeholders so that we can create whole-of-society solutions and build smarter regulation that allows THR to flourish.”

    BAT plans to make Omni, which is also available as a PDF download, a fully online, dynamic resource in the coming months. “With THR research rapidly evolving, we want Omni to reflect the latest evidence in support of THR,” says Wheaton. “A team of scientists will regularly update Omni by assessing and collating new academic research, including BAT’s latest peer-reviewed evidence. Omni will both push out information and pull in insights, but the ultimate goal is to create a platform for dialogue. That’s why we are inviting anyone who shares our belief that a smokeless world is possible—and even those who don’t agree with us—to interrogate the evidence and join us on our journey to ‘A Better Tomorrow.’”

    Major Milestone

    BAT will be introducing new tools and technology-enabled platforms to facilitate the interrogation of the latest science and real-world experience of tobacco harm reduction, Wheaton says. “For example, it gives us the opportunity to develop a tech-driven Omni tool to give stakeholders in the THR policy debate more access to our evidence-based answers to the big questions facing our sector and society.”

    “Omni is not a broadcast channel for BAT to talk about tobacco harm reduction,” he stresses. “Our ambition is for Omni to be a platform for a necessary conversation with stakeholders rooted in evidence—a manifesto for change and a call to action, backed by high-quality science and real-world evidence.”

    Omni, Murphy explains, is the result of a major scientific effort, involving over 60 contributors and writers. “It covers products that involve around 9,800 global patents and cites more than 600 pieces of external evidence. This comprehensive compendium reflects over a decade of research—both our own and independent studies—into THR, and we have included the very best of published industry science for assessing the risk profile of smokeless products. We’re incredibly proud of this achievement, and as we’ve said, this is just the beginning.”

    “The launch of Omni marks a major milestone in our transformation toward a smokeless world, and we’re excited about the progress it represents for both us and the industry. By 2030, we aim to have 50 million adult consumers of our smokeless products, and by 2035, for smokeless products to make up at least 50 percent of our global revenue,” says Wheaton. “The ultimate goal we are working toward is a fully smokeless business, hopefully in a fully smokeless world. We believe Omni will be instrumental in achieving this vision, and we’re eager for the next chapter.”

  • BAT Moving Listing Would be ‘Distraction’

    BAT Moving Listing Would be ‘Distraction’

    BAT CEO Tadeu Marroco dismissed the idea of moving the company’s listing to New York from London, stating that it “would create a lot of distraction internally,” according to the Financial Times. Marroco also noted that he wasn’t sure “the benefit would be as evident as some suggest.”        

    In 2023, Rajiv Jain, chair and chief investment officer of U.S. investment group GQG Partners, which at its peak owned 4 percent of BAT stock, urged BAT to switch its primary listing to the U.S. Jain argued that Philip Morris International, which GQG Partners also owns a stake in, trades at a much higher earnings multiple.     

    GQG Partners sold out of BAT in July 2023 due to BAT’s refusal to move its listing.

    Marroco said in regards to the possibility of moving the company’s listing, “I don’t think that in this period of time, we should be focused on this.” He noted that he has “many other things” he needs to do and that “There is nothing to suggest that … it’s a no-brainer to go to the U.S.”

    While Marroco acknowledged that London’s capital markets are struggling to attract and retain listings, he noted that there are advantages to staying in the U.K.

    “If you have a shareholding of a U.K. [listed company] and you are located outside, you don’t pay withholding tax on your dividends, which is different from the U.S.,” he said.

    “Hopefully, we can see that in 10 years’ time, we don’t have this type of discussion. Today, there’s a lot of emotion that relates to it because of the frustration of some that are leaving.”

    BAT recently announced a sale of part of its stake in ITC to restart BAT’s share buyback program. “What’s most important for me is that having restarted the buyback, this should be a consistent feature in terms of our capital allocation,” said Marroco.

    “We have a massive business in the U.S. that we can use to sell [new products],” he said. BAT’s U.S. cigarette sales have fallen, driven by consumers switching to cheaper brands and cigarette alternatives such as heated-tobacco products. By 2035, BAT aims to have 50 percent revenue from alternative products.

  • BAT Share Buyback Begins

    BAT Share Buyback Begins

    Image: maurice norbert

    BAT’s program to buyback BAT ordinary shares using proceeds from its sale of shares in ITC Limited begins Monday, March 18, 2024. The final net proceeds received by the BAT Group from the sale were £1.57 billion ($1.99 billion), and the program will buy back £1.60 billion of BAT ordinary shares starting with £700 million in 2024 and the remaining £900 million in 2025. The program will end no later than Dec. 31, 2025.

    The purpose of the program is to reduce the issued share capital of the company. The purchased shares will be canceled. The company has entered into an agreement with UBS AG London Brance to enable the purchase of ordinary shares for the initial stage of the program. UBS will purchase the company’s ordinary shares as principal, and the company will purchase such number of ordinary shares form UBS in accordance with the terms of the engagement.

    The number of ordinary shares permitted to be purchased by the company is 223,590,721 ordinary shares. The program will be carried out on Recognized Investment Exchanges within the U.K. For the avoidance of doubt, no repurchases will be made in respect of the company’s American Depositary Receipts.

  • BAT Faces Lawsuits Over Impairment

    BAT Faces Lawsuits Over Impairment

    Image: Vitalii Vodolazskyi

    BAT is facing potential shareholder lawsuits targeting the $31.5 billion write-down in the fair market value of R.J. Reynolds Tobacco Co.’s traditional cigarette brands, according to the Winston-Salem Journal.

    The write-down was disclosed in early December 2023. BAT changed the value status of Newport, Camel, Pall Mall and Natural American Spirit to “finite” from “indefinite.” The value lifespan of these brands has shifted to about 30 years from “perpetual,” according to Tadeu Marroco, BAT CEO, in the company’s fiscal 2023 financial update.

    Multiple law firms, including Rosen Law Firm and Kuznicki Law, are soliciting plaintiffs for a class-action lawsuit. Some firms have cited a deadline of March 25, but a new round of solicitations has been made this week.

    The law firms are requesting a class-action period of Feb. 9 to Dec. 6 for purchasers of BAT’s publicly traded securities.

    BAT and certain unnamed current and former executives are potential defendants.

    The potential lawsuits claim that BAT “made false and/or misleading statements and/or failed to disclose that BAT materially understated the risks and potential likelihood of an impairment to its premium American cigarette brands as a result of various longstanding headwinds.”

    Following the write-down, investors sent share prices down 9 percent.

    According to PricewaterhouseCoopers, an indefinite value “has no expiration date barring any significant legal, regulatory, contractual, competitive, economic or other factors that limit its useful life to the reporting entity.” A finite value typically covers brands whose worth is likely to decline over time.

    Reynolds has been under increasing pressure from BAT to improve overall traditional cigarette performance. According to Marroco, BAT’s “performance in U.S. combustibles (traditional cigarettes) has been disappointing. Returning combustibles to consistent value creation is critical to our multi-category strategy in the U.S.”

  • BAT Ups Investment in Organigram

    BAT Ups Investment 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.

  • BAT Appoints CFO

    BAT Appoints CFO

    Image: tonsnoei

    Soraya Benchikh has been appointed to the role of chief financial officer and executive director at BAT. She will join the boards from May 1, 2024, succeeding Javed Iqbal, who will continue to serve as interim finance director until April 30, 2024.

    Benchikh has been president of Europe at Diageo since January 2023, having joined Diageo in July 2020 as managing director for Northern Europe. Benchikh previously spent 20 years at BAT, where she served as president of BAT France, area director for East and Southern Africa and regional finance director for Europe. Earlier in her career, Benchikh worked in finance roles at General Electric and Gillette.

    “I am pleased to welcome Soraya as chief financial officer and to the board,” said BAT chair Luc Jobin in a statement. “She brings a wealth of leadership experience and commercial acumen from across both finance and commercial roles. Soraya’s excellent track record in different geographies and in-depth understanding of the sector make her ideally suited for the role.”

    “I am delighted to welcome Soraya to the management board as our new chief financial officer,” said BAT CEO Tadeu Marroco. “Her extensive senior leadership and financial experience from a range of international fast-moving consumer goods companies represents a great addition to our leadership team. I am grateful to Javed for his continued contribution as interim finance director in addition to his ongoing role as director, digital and information.

    “Following the recent appointment of Dr. Cora Koppe-Stahrenberg as chief people officer, Soraya’s appointment is also a further important step toward building a modern organization. I very much look forward to working with Soraya as we continue our transformation.”

    “I am excited to rejoin the leadership of BAT as chief financial officer and executive director and share their passion for the transformation strategy,” said Benchikh. “I am looking forward to working with my new colleagues, the leadership team, Tadeu and the board and leverage my recent experience within broader FMCG to provide an external lens and support their efforts to accelerate BAT’s strategy to build ‘A Better Tomorrow.’”

  • BAT Taps Arvato for German Vape Logistics

    BAT Taps Arvato for German Vape Logistics

    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.

  • BAT Uses Rooibos Tea in Heat Sticks

    BAT Uses Rooibos Tea in Heat Sticks

    Image: rtvistlive

    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.

    Sales of herbal tobacco-heating products have been growing in Europe.

    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.

  • BAT Appoints Chief People Officer

    BAT Appoints Chief People Officer

    Image: tomertu

    BAT has appointed Cora Koppe-Stahrenberg to the new role of chief people officer. She will join the BAT management board on Nov. 1, 2023.

    Bringing critical experiences from other sectors and industries, Koppe-Stahrenberg was most recently global head of human resources of Fresenius Medical Care, a publicly listed global healthcare company with over 125,000 employees. While at Fresenius Medical Care, Koppe-Stahrenberg established a new global HR function and implemented a global people strategy, which focused on the creation of a collaborative and empowering culture delivered through a number of change initiatives. Previously, Koppe-Stahrenberg held various international senior HR positions at Marsh and McLennan Companies, Emirates Investment Authority and General Electric.

    “I am delighted to welcome Cora to the management board,” said BAT CEO Tadeu Marroco in a statement. “This is a significant management team enhancing appointment for BAT. Culture and collaboration are at the heart of my leadership agenda; Cora shares these values and will play a key role in the group’s transformation to build ‘A Better Tomorrow.’ I have no doubt that Cora will bring a fresh perspective having worked internationally in multiple sectors outside our industry and will bring new insights and capability to our management team.

    “I look forward to working with Cora to deliver a winning culture and a dynamic, modern BAT.”

    The chief people officer will report to the chief executive.

  • Kenya Wants to Ban BAT Nicotine Pouches

    Kenya Wants to Ban BAT Nicotine Pouches

    Image: Tobacco Reporter archive

    Kenyan legislators are urging the government to ban the sale of BAT’s nicotine pouches Velo and Lyft, reports 2Firsts.

    Health Minister Susan Nakhumicha was questioned about the products during a parliamentary address.

    The Kenyan Tobacco Control Act (KTCA) states that all packaging of nicotine pouches and tobacco products must contain warnings in English and Kiswahili. Sabina Chege, Member of Parliament, showed two boxes of Velo nicotine pouches, which only displayed a reminder that Velo contains nicotine, which can be addictive. The argument by experts is that nicotine also poses serious health risks.

    Allowing import and sale of the pouches could jeopardize the well-being of Kenyan youth, according to Chege. In response, Nakhumicha suggested the formation of a technical team to investigate the KTCA and make recommendations.