Tag: British American Tobacco

IQOS Pauses Expansion After Patent Ruling

Photo: Kuznietsov Dmitriy
Philip Morris USA has paused U.S. expansion of its IQOS heat-not-burn (HnB) cigarettes following an unfavorable U.S. International Trade Commission (ITC) ruling, reports The Winston-Salem Journal, citing the company’s second-quarter report.
In April 2020, British American Tobacco subsidiaries R.J. Reynolds Tobacco Co., RAI Strategic Holdings and R.J. Reynolds Vapor Co. filed a patent infringement lawsuit against Philip Morris USA.
The complaint focuses on three HnB technology patents held by the company. An additional two patents are involved in a separate legal proceeding before the patent and trademark office.
In May, an ITC administrative law judge found that the IQOS system infringes two of the plaintiff’s patents and recommended imposition of a ban on the importation of the IQOS system.
On July 27, the ITC accepted review of the administrative law judge’s findings and recommendations on certain issues, including issues relating to the patent infringement claims and potential remedies, including a ban on the importation of the IQOS electronic device, Marlboro HeatSticks and component parts into the United States and on the sale of any such products previously imported into the United States.
The ITC’s ultimate order is subject to review by the U.S. Trade Representative and federal court. Due to this uncertainty, PM USA has delayed further expansion of IQOS and Marlboro HeatSticks.
IQOS is the only HnB product authorized for sale in the U.S., where it is sold by Altria. Last year, the U.S. Food and Drug Administration allowed the company to market IQOS as reducing consumers’ exposure to harmful chemicals found in cigarettes.
The IQOS products debuted in test markets in Atlanta, Georgia, in October 2019 and Richmond, Virginia, in November 2019.
During the second quarter, PM USA expanded retail distribution of Marlboro HeatSticks into the Triad and other metro areas of North Carolina as well as northern Virginia and Georgia.
The expansion contributed to Marlboro HeatSticks’ retail sales volume jumping by nearly 40 percent, including reaching a 0.8 percent market share for overall cigarettes in Atlanta as well as 0.5 percent in Charlotte.
July 30, 2021
BAT Invests in Bangladesh

Photo: Piotr Pawinski
BAT is investing BDT322 crore ($38 million) in its Savar, Bangladesh, factory to help meet growing demand from abroad, reports the Daily Star.
It’s the company’s second local investment in six months. In February, the cigarette manufacturer announced an investment of BDT192.50 crore to increase its manufacturing capacity.
Commercial operations at the plant are expected to start in October.
BAT Bangladesh in recent months sent products to China, the Maldives and other countries despite the challenges of the pandemic, according to company Secretary Azizur Rahman.
Net revenue from BAT’s Bangladeshi operations rose 25 percent to BDT3,841 crore. During the same period, its profits rose 43 percent to BDT862 crore.
Performance was driven by growth in volume offset by growth in operating expenses.
July 30, 2021
Growth in New Category Sales for BAT

Photo: BAT
BAT reported revenue of £12.18 billion ($16.89 billion) for the six months that ended June 30, down 0.8 percent (up 8.1 percent on an adjusted basis) from the comparable 2020 period. Revenue from new categories increased by more than 50 percent to £883 million. Profit from operations totaled £4.91 billion, down 3.7 percent (up 5.4 percent on an adjusted basis) from the comparable six months a year earlier.
“This has been an exciting period of growth in new categories, with new category constant currency revenue up by 50 percent in the first half,” said BAT CEO Jack Bowles in a statement. “We added 2.6 million consumers—our highest ever increase—to our noncombustible product consumer base to reach 16.1 million. This demonstrates our accelerating transformation driven by our multi-category portfolio, with continued key market share gains in all three new categories.
“We are building strong, global brands of the future with Vuse, Velo and Glo. These are underpinned by industry-leading multi-category consumer insights and science with increasing digitalization. We have invested a further incremental £346 million in the first half, funded by continued value growth from combustibles and expect to reach our £1 billion Quantum savings target 12 months early. We have now increased our savings target to £1.5 billion by 2022.
“Our rapid growth in new categories is driving significant scale benefits and 2021 is shaping up to be a pivotal year in our journey toward ‘A Better Tomorrow.’”
July 28, 2021
BAT Highlights Vuse’s Carbon Neutral Status
Photo: BAT
BAT’s Vuse e-cigarette celebrated its position as the first global carbon neutral vape brand with a carbon neutral voyage down the Thames in London, home of BAT’s global headquarters.
The event was organized to underscore Vuse’s commitment to carbon neutrality and its various supporting initiatives. For instance, in utilizing substantial sea freight as part of its global supply chain, BAT aims to move the majority of Vuse’s global shipments by sea freight by the end of next year.
“I am proud of the way that Vuse is playing its part in delivering ‘A Better Tomorrow’ by reducing its impact on the environment,” said Kingsley Wheaton, chief marketing officer at BAT, in a statement.
“Vuse is a leading global brand with ever-increasing scale, which allows us to drive global supply chain efficiencies and effectiveness. I am delighted that, in Vuse, we are demonstrating the kind of purposeful behavior expected from leading brands of the world. This commitment will play a part in our vision of ‘A Better Tomorrow’ becoming a reality.”
Research conducted on behalf of BAT’s R.J. Reynolds Vapor Co. subsidiary found that nearly half (46 percent) of consumers said they would prefer using a vapor product from a company that was successful in becoming carbon neutral. A brand’s environmental priorities and impact are increasingly important to consumers in considering their purchasing choices, with nearly a third of consumers broadly viewing a brand more favorably based on their environmental initiatives, according to Reynolds.
Vuse’s carbon neutrality status and ambition to increase sea freight is part of BAT’s bigger ambition to become an environmentally sustainable vape brand with initiatives including:
An ambition to transport the majority of international shipments by sea by the end of 2022 and 100 percent of its consumable pods by the end of 2023
A global device and pod collection scheme; through the “Drop the Pod” campaign, approximately 200,000 pods were collected since the start of the pilot in 2020
Cutting single use plastics from packaging; the “Cut the Wrap” campaign has saved 100 tons of plastic, or the equivalent of 4 million plastic bottles, in 2020
BAT’s sustainability efforts and commitment have received notable independent recognition. These include appearing in the Dow Jones Sustainability Indices for 19 consecutive years (the only tobacco company to be listed in the prestigious World Index in 2020), a MSCI rating of BBB and CDP A-List status for climate change.
July 23, 2021
Call for Inquiry into Illicit Tobacco Market

Photo: Tobacco Reporter archive
British American Tobacco has called for an inquiry into South Africa’s tobacco market following a new report showing surging sales of illicit cigarettes.
The number of shops selling illegal cigarettes in the Eastern Cape has more than doubled in the four months since the last time results were released, according to a recent Ipsos report. In KwaZulu-Natal, the rate has shot up by one-third. Two out of three shops in the hotspot provinces of Free State, Gauteng and Western Cape sell illegal cigarettes, and illegal cigarettes are on sale in nearly half (41 percent) of all shops nationwide.
Five times as many outlets on petrol forecourts now sell illegal cigarettes since the last time results were released, according to BAT. Illegal cigarettes are being sold for as little as ZAR6 ($0.42) per pack, a fraction of the Minimum Collectible Tax (MCT) rate of ZAR21.60 per pack of 20.
“This research is damning proof that authorities have failed to bring South Africa’s colossal criminal market in cigarettes under control,” said BATSA General Manager Johnny Moloto in a statement. “Tax-evading manufacturers who exploited last year’s lockdown ban are now running rampant and costing South Africans huge sums of money at a time when every cent is a lifesaver. It is nothing short of a national emergency that demands a full-scale inquiry into the whole industry.”
According to BAT, brands owned or licensed by members of the Fair-Trade Independent Tobacco Association feature prominently on the black market. The FITA in the past has rejected suggestions that its members are involved in the illicit trade.
The latest Ipsos fieldwork was carried out from June 15–22, 2021, and follows similar studies in March and February of this year.
Moloto urged the government to introduce of a minimum retail sales price of ZAR28 for a pack of 20, ratify the World Health Organization’s illicit trade protocol and introduce a track-and-trace system, among other measures to fight the illegal cigarette trade.
July 7, 2021
Study Confirms HnB Harm Reduction
Photo: BAT
New research published today in Internal and Emergency Medicine provides the first real-world evidence that people switching from cigarettes to exclusive use of glo, BAT’s flagship tobacco-heating product (THP), can significantly reduce their exposure to certain toxicants and indicators of potential harm related to several smoking-related diseases compared with continuing to smoke.
The results, recorded at six months of a 12-month study, showed that switching completely to glo resulted in statistically significant changes across a range of “biomarkers of exposure” (BoE) and indicators of potential harm, known as “biomarkers of potential harm” (BoPH), compared with continuing to smoke.
For most biomarkers measured, the reductions seen in people using glo were similar to those in participants who stopped smoking completely.
Based on the toxicants measured, glo users showed a:
Significant reduction in a biomarker for lung cancer risk;
Significant reduction in white blood cell count, an inflammatory marker indicative of cardiovascular disease (CVD) risk and other smoking-related diseases;
Improvement in HDL cholesterol associated with reduced risk of CVD;
Improvements in two key indicators of lung health; and
Improvement in a key indicator of oxidative stress, a process implicated in several smoking-related diseases, such as CVD and hypertension.
“These are exciting results as they allow us to understand the potential for reduction of risk that switching completely to glo can deliver,” said David O’Reilly, director of scientific research at BAT, in a statement. “The study shows that smokers switching to glo can reduce their exposure to certain toxicants, which reduces their risk of developing certain smoking-related diseases.
“To have shown a significant reduction in measures of BoPH, some comparable to quitting completely, is very encouraging and provides further scientific substantiation of the harm reduction potential of glo and how it supports our ambition to build ‘A Better Tomorrow’ by reducing the health impact of our business.”
Read more about BAT’s glo trial in Tobacco Reporter’s July 2021 issue.
July 1, 2021
Milestone Study

Photos: BAT
A long-term, randomized, controlled trial of BAT’s glo tobacco-heating product lends credibility to the harm reduction potential of the entire category.
By Oliver Porritt
A landmark new clinical study has shown that the health risks of cigarette smoking may be reduced in smokers who completely switch to using tobacco-heating products (THPs).
The research, carried out by BAT, analyzed the changes in a range of biomarkers of exposure (BoE) and biomarkers of potential harm (BoPH). These biomarkers are linked to oxidative stress, cardiovascular and respiratory diseases and cancer, and they were used to compare the potential long-term effects of smoking cigarettes versus THPs and cessation.
Published in the Journal Internal and Emergency Medicine, the results suggest that smokers who switch from cigarettes to exclusive use of BAT’s flagship THP, glo, may benefit from a similar reduction in the risk of developing a number of smoking-related diseases as those who stopped smoking entirely.
To find out more about the study and its implications, Tobacco Reporter caught up with BAT’s director of scientific research, David O’Reilly, whose team led the work.

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Speaking from Liverpool, where he was attending this year’s Global Forum on Nicotine (GFN), O’Reilly said the paper represented a significant moment for both his company and the product category as a whole. “This is a milestone event because this groundbreaking study is the first time the world has seen a successful long-term, randomized, controlled trial of any tobacco-heating product. Until now, no one else has been able to demonstrate over a sustained period that when you switch from cigarette smoking to exclusive use of a THP like glo, the biomarkers of potential harm are reduced to levels similar to that of cessation. This study was long in the planning, and it required careful execution, but when we reviewed the results, we were delighted,” said O’Reilly.
“The biomarkers of exposure go down rapidly, so we weren’t expecting to see any substantial improvements between the positive results we published in an earlier paper, featuring our three-month data, and what we found at six months. But with BoPH, you need to conduct longer studies for beneficial changes to occur. That’s why the six-month data was more important to us than either the three month or even the twelve month time slots. In fact, we aren’t really expecting it to change significantly beyond this point. By the time you get to six months, the cohorts have stabilized in their BoPH. We would anticipate that the 12-month data will provide further validation of this set of results, but the halfway point is therefore absolutely pivotal in this year-long study, and we are very pleased with what we’ve seen,” O’Reilly noted.

While this study focused on our flagship THP, glo, we would be the first to say that this research also importantly supports the category of tobacco-heating products as a whole.
David O’Reilly, director of scientific research, BAT
“Every one of the studies we’ve done on glo, and indeed the work we’ve carried out on our other platforms, is important because they all add to the evidence base for these products, further demonstrating that, while they are not risk-free and are addictive, they are reduced risk if individuals quit smoking and move to them completely. But some types of evidence carry more weight than others, and a long-term, clinical, randomized, controlled study assessing BoPH carries a lot of weight indeed.
“I think this study, along with many others that we and others have published, also adds to the evidence that tobacco harm reduction should be adopted as a tobacco control and public health policy because it’s likely to contribute to the reduction in morbidity and mortality from cigarette smoking.”
He added, “This has been a very successful project, but we have also learned a lot of things that we’ll take into our upcoming studies. Over the next three years, we have around 30 clinical trials planned, and we anticipate that in the future these could be executed in a shorter time period. This is really important because the sooner we obtain this kind of data, the sooner we can engage with external stakeholders and give governments and consumers the confidence that for smokers who would otherwise continue to smoke, switching to these products is a positive thing to do.”

This clinical study was carried out at four sites in the U.K. (Belfast, London, Leeds and Merthyr Tydfil). The participants were healthy smokers or never-smokers of both sexes, aged 23–55, who could go about their day-to-day lives, visiting a clinic just once a month for samples, including blood and urine, to be collected.
The volunteer smokers who did not want to quit were randomly selected to either continue smoking their usual brand of cigarettes or switch to the exclusive use of glo for the duration of the study. A control group of smokers who did want to quit smoking was offered nicotine-replacement therapy (NRT) and/or varenicline provision if requested, together with cessation counselling, while the never-smokers acted as a control. Across these four groups, a total of 339 participants completed the study to six months.
Various BoE and BoPH were assessed at baseline and monthly up to 180 days (six months), and this paper presents the results at the halfway point of the full 12-month study. The use of BoPH, in particular, gives researchers the ability to assess the potential health risks of novel tobacco products in the absence of long-term epidemiological evidence. These newer products have simply not been around long enough to evaluate their impact on clinical outcomes such as cancer, cardiovascular disease and chronic obstructive pulmonary disease. These are conditions that can take decades to develop, but BoPH can provide crucial indicators for these events. Indeed, according to the Institute of Medicine’s 2001 report Clearing the Smoke, BoPH are defined as the “measurement of an effect due to exposure; these include early biological effects, alterations in morphology, structure or function, and clinical symptoms consistent with harm.”
The data from this study show that while the BoE and BoPH remained stable between baseline and six months for the group who continued to smoke, the levels of most BoE reduced significantly for the users of glo, becoming similar to those of the control groups who abstained from cigarette smoking.
More importantly, for those participants who exclusively switched to glo, the following BoPH also saw a favorable change versus continued cigarette smoking: HDL, WBC, FEV1%pred, sICAM, 11-dTx B2, 8-epi-PGF, FeNO and NNAL, and, with the exception of FeNO and NNAL, these changes were comparable to cessation.

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To make sure these results were both reliable and meaningful, the team at BAT told participants about the importance of exclusively using the products they had been assigned, for both the cigarette and glo groups, or abstaining from any nicotine products, other than NRT, in the quitting or never-smoker cohorts. But to ensure the glo users were not smoking cigarettes during the study, the clinics also measured a compound called CEVal. This is a hemoglobin adduct of acrylonitrile (N(2cyanoethyl) valine and, as it is only found in cigarette smoke, O’Reilly says it proved to be a very useful biomarker of compliance.

“In these longer-term studies,” he said, “one of the main challenges has always been knowing whether or not the smokers who have either quit smoking or switched to your test product are compliant because if they’re not, it dilutes the effect of switching in the study and the potential long-term harm reduction associated with switching. To encourage smokers to switch to noncombustible products, you need to have really reliable clinical evidence showing that a complete switch is likely to reduce the risks of developing smoking-related diseases as long as they successfully stay with the product and don’t return to smoking.
“So another breakthrough of this study is the fact we can now use CEVal to ensure compliance among our study participants. Indeed, more people were compliant in this study than we expected, and it is possible that was at least partly down to the fact they were told we would be using CEVal. So going forward, we think CEVal is a really useful tool that we are contributing to the scientific community, and we would recommend others to use it in their future studies to ensure compliance.”

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O’Reilly also said that while this study’s findings were an important step forward, they represented just one aspect of BAT’s stated ambition to build “A Better Tomorrow.” “Our purpose is to reduce the health impact of our business,” he said, “and we are doing that with our product portfolio transformation. So, while this study is part of a broader evidence base for glo, at the same time we’re publishing studies relating to our vaping product, Vuse, and our modern oral product, Velo.
“And while this study focused on our flagship THP, glo, we would be the first to say that this research also importantly supports the category of tobacco-heating products as a whole, and when we’ve completed similar studies on Velo and Vuse, those bodies of evidence will support each of the categories of vaping and modern oral. It’s a really important philosophy at BAT that we build trust in these categories, and that’s not just for our products and brands. With all the current transformation in the tobacco and nicotine landscape, perceptions are changing, but there’s still a long way to go. So I think the fact this study should not just be about one product, but the whole category, is a really important message.”

Oliver Porritt is freelance editorial contributor to Tobacco Reporter. Previously, he worked in the science communications department at BAT.
July 1, 2021
BAT: Modern Oral Comparable to NRT
New research published today indicates that BAT’s modern oral products in the form of tobacco-free nicotine pouches have a toxicant profile that is comparable to nicotine-replacement therapies (NRTs) and much lower than traditional oral snus, a category of products that when used as the sole nicotine product is already established as a reduced-risk product compared with cigarettes.
The study, published in Drug and Chemical Toxicology, analyzed four variants of one of BAT’s modern oral nicotine pouch products Lyft+, three snus products, and two different NRT products in a lozenge and a gum format. Each of these products was tested for a range of known harmful and potentially harmful constituents.
The results showed that the modern oral products had a comparable toxicant profile to NRTs, which are currently considered to be the least risky of all nicotine products. The study also estimated that users of the studied modern oral products are likely to be exposed to far fewer and significantly lower levels of toxicants than those who use snus.
According to BAT, the findings suggest that modern oral products, such as Lyft and Velo, should be placed close to NRTs at the lowest exposure end of the nicotine product toxicant delivery continuum.
“These results add to the growing body of evidence to support the reduced-risk potential of modern oral products compared to continuing to smoke,” said Aaron Williams, head of science and R&D, in a statement.
These results add to the growing body of evidence to support the reduced-risk potential of modern oral products compared to continuing to smoke.
Aaron Williams, head of science and R&D, BAT
“They provide important new evidence to support the role of modern oral products in tobacco harm reduction by demonstrating that they have far fewer and much lower levels of toxicants compared with cigarette smoke and even compared with Swedish-style snus, which is already well established as a reduced-risk product when used as the sole nicotine product.
“This means smokers looking for an alternative nicotine product have another alternative offering greatly reduced exposure to toxicants that comes in an oral format that some may find convenient and easy to use.”
June 16, 2021
BAT Recognized for Supply Chain Excellence

Photo: BAT
BAT has been ranked 19th in the Gartner Supply Chain Top 25 for 2021—marking the first time BAT has made the top 20.
In its second consecutive year in the Gartner rankings, BAT has moved up two places from 21st in 2020. The Gartner rankings recognize companies globally who have demonstrated excellence in supply chain management, effectively navigating through the Covid-19 landscape.
As BAT evolves into a multi-category consumer products and brands business, its transformation is being powered by digital technology. This allows BAT to respond with greater agility and resilience to the complexity of its growing new category portfolio supply chain. According to the company, this transformation is underpinned by BAT’s commitment to put ESG front and center of its operations, with sustainability firmly embedded into its supply chain management strategies.

To move up the ranks during a global pandemic is testament to the hard work and excellence of BAT’s operations teams across the world.
Zafar Khan, group operations director, BAT
“We are honored to have our supply chain operations recognized in the Gartner Supply Chain Top 25 rankings for the second year in a row,” said Zafar Khan, BAT’s group operations director, who joined the company in February, in a statement. “To move up the ranks during a global pandemic is testament to the hard work and excellence of BAT’s operations teams across the world.”
June 9, 2021
BAT: Sales of Noncombustibles Up

Photo: BAT
BAT added more than 1.4 million noncombustible product consumers in the first quarter of 2021 to reach a total of 14.9 million, CEO Jack Bowles announced in a trading update.
“We are investing and building strong, fast-growing international brands in each segment, rapidly accelerating our reach and consumer acquisition, thanks to our digitalization and our multi-category consumer-centric approach, supported by the right resources and products and our agile organization,” said Bowles.
“Our portfolio of noncombustible products is tailored to meet the needs of adult consumers. We are growing New Categories at pace, encouraging more smokers to switch to scientifically substantiated reduced-risk alternatives.”
The company’s New Category products are now sold in 74 markets across 53 countries. Its Vuse/Vype vapor devices have been gaining value share in all Top 5 markets. Vuse is even approaching global leadership in vapor, reaching 31.4 percent category value share in the Top 5 vapor markets year-to-date in April, according to Bowles.

We are growing New Categories at pace, encouraging more smokers to switch to scientifically substantiated reduced-risk alternatives.
Jack Bowles, CEO, BAT
BAT’s Glo tobacco-heating product (THP) recorded positive volume share momentum in many markets, including Japan. The device achieved 16.2 percent category volume share in the Top 9 THP markets year-to-date in April.
According to Bowles, BAT has also been consolidating its international volume share leadership in Modern Oral, with strong Velo volume share growth in the U.S. The company’s category share of Modern Oral in the Top 5 markets reached 40.2 percent year-to-date in April.
BAT’s combustibles segment was characterized by strong pricing and robust volume, the company said. Group value and volume share were both up 10 base points year-to-date, with full-year industry volume expected to be down about 3 percent.
For 2021, BAT now anticipates constant currency revenue growth of above 5 percent, ahead of its 3 percent to 5 percent guidance.
June 8, 2021