Tag: British American Tobacco

Organigram Closes Second BAT Tranche

Photo: krishnadasekm
Organigram Holdings closed the second of three tranches of a CAD124.56 million ($92.2 million) equity investment by British American Tobacco’s BT DE Investments subsidiary.
Pursuant to the second tranche closing, the investor acquired 4,429,740 common shares and 8,463,435 Class A preferred shares at a price of CAD3.22 per share for gross proceeds of $30.82 million. The remaining 12,893,175 shares subscribed for are due to be issued at the per share price in the final tranche on or around Feb. 28, 2025.
“With two tranches of the Jupiter pool now funded, combined with our strong balance sheet and targeted investment strategy, Organigram is well on its way to executing on its ambitious growth plan focusing on international, technological and product expansion,” said Organigram CEP Paolo De Luca in a statement.
“Our inaugural Jupiter investment in Open Book Extracts marked our second investment in the U.S. market, and our first international investment in Sanity Group represents a significant first step in our ambitions to grow our footprint in the fast-growing German market,” he added.
September 5, 2024
BAT Kenya Sells Pouch Equipment

Photo: BAT
BAT Kenya is selling the equipment at its oral nicotine pouch factory in Nairobi, reports Business Daily.
The facility has been idle for nearly five years due to the government’s failure to issue a license for commercialization of the new product.
The cigarette maker announced the decision on July 25, in a commentary accompanying its financial results for the six months ended June 2024, in which net profit dropped by 24.3 percent to KES2.14 billion ($16.4 million) on lower sales and higher finance costs.
July 29, 2024
BAT Reports Results
BAT 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.”

Photo: BAT
July 25, 2024
BAT Pays Fine in Nigeria

Photo: Confidence
BAT and several of its affiliates have paid a $110 million fine for violating Nigerian competition laws, reports Independent.
Speaking during a media briefing, Adamu Abdullahi, acting executive vice chairman of the Federal Competition and Consumer Protection Commission (FCCPC), said the full $110 million had been paid at the official exchange rate at that time through the Central Bank of Nigeria.
“The federal government received 40 percent of the amount while 60 percent went to the FCCPC,” Abdullahi was quoted as saying.
He described the case as watertight, adding that the FCCPC conducted thorough investigations on the tobacco company.
Abdullahi further revealed that the FCCPC is currently monitoring the activities of another major tobacco company for compliance with international conventions, the National Tobacco Control Act and other regulations, and to prevent potential anti-competitive practices.
“The commission has launched a multifaceted campaign to combat underage tobacco use and protect vulnerable populations,” he said.
July 24, 2024
New South Africa Urged to Tackle Illicit Trade

Photo: Tobacco Reporter archive
BAT has called on South Africa to crack down on the country’s rampant illicit tobacco trade. The multinational estimates that the government loses an estimated ZAR24 billion ($1.32 billion) in excise tax revenue to the illegal cigarette business every year.
In a recent Ipsos study cited by BAT, 59 percent of stores sampled sold illicit cigarettes for a little as ZAR5 per pack of 20.
The study also revealed that new manufacturers have entered the business, fueling intense competition at the bottom end of the market.
“The entrance of new players raises some serious concerns about government’s commitment to address illicit trade. Nothing justifies licensing new manufacturers in a sector already ravaged by high levels of noncompliance without conducting proper due diligence,” said Johnny Moloto, area head of corporate and regulatory affairs for BAT Sub-Saharan Africa, in a statement.

The Ipsos study highlights the challenge facing the new government in getting to grips with illicit trade and cross-border illicit financial flows, which are wreaking havoc with our economy and tax revenues.
Johnny Moloto, area head of corporate and regulatory affairs, BAT Sub-Saharan Africa
“The Ipsos study highlights the challenge facing the new government in getting to grips with illicit trade and cross-border illicit financial flows, which are wreaking havoc with our economy and tax revenues. To right the ship, authorities urgently need to prioritize the fight against illicit tobacco and secure convictions against the ring leaders,” Moloto said.
In the past few years, the availability of cigarette packs selling below the minimum collectable tax has fluctuated in retail outlets: from 44 percent in March 2021, it dropped to 27 percent in October 2022, before surging to 59 percent in 2024. The recent Ipsos research showed a high level of cigarette packs available below ZAR25.05 in the wholesale and informal trade, at 83 percent and 72 percent respectively.
BAT urged the Ministry of Finance to introduce a minimum retail price, which would make it illegal to sell cigarettes for less than a stated amount.
July 18, 2024
BAT Expanding in Serbia

Photo: www.akolosov.art
BAT is expanding in Serbia, reports SeeNews.
“We are very pleased and very happy with the business environment in Serbia,” said Jorge Araya, head of BAT’s South-Eastern Europe division.
According to Araya, the company plans to expand its Serbian manufacturing capacity by 20 percent and export approximately half of its domestic production.
In 2003, BAT bought Duvanska Industrija Vranje. By late 2020, it had invested €270 million ($290 million) in the factory.
BAT’s competitors in Serbia include the local units of Philip Morris International and Japan Tobacco International.
Araya said BAT is the only tobacco company competing locally in all new category products. Its portfolio covers not only heated-tobacco but also herbal products, e-cigarettes and nicotine pouches, he said.
July 12, 2024
Pakistan Urged to Block Small Pack Exports

Image: Maksym Kapliuk
The African Tobacco Control Alliance (ATCA) has urged Pakistan to prevent British American Tobacco from exporting cigarettes in packs of 10 sticks to Sudan, reports The Independent.
Pakistan prohibits the sale of cigarettes in such packs on its domestic market. BAT subsidiary Pakistan Tobacco Co. (PTC) has asked the government to make an exemption for a large order from Sudan, which permits the sale of 10-stick packs on its territory.
In its statement, the ATCA urged the Pakistani government to reject PTC’s request, emphasizing the need to protect children from the dangers of smoking.
According to the ATCA, the 20-cigarette per-pack rule is the global standard for the protection of children. Because packs with fewer than 20 cigarettes are less expensive, the argument goes, it is more likely that underage buyers will purchase them. The ATCA refers to such packs as “kiddie packs.”
At least 82 countries have laws requiring a minimum of 20 cigarettes a pack.
“BAT is pushing you to change regulations so that it can manufacture 10-stick cigarette packs and export them to Sudan, the ATCA wrote in its letter to the government of Pakistan. “However, the WHO Framework Convention on Tobacco Control in its Article 16 calls on parties to prohibit the sale of cigarettes in small packets, which increases the affordability of such products to minors. Consequently, Pakistan as a party to the convention should not allow manufacturing of 10-stick cigarette packs.”
The organization condemned BAT’s explanation that the 10-stick packs will be sold only in Sudan, noting that if the tobacco giant is allowed to succeed with this plan in Sudan, other African countries would be next. “It is unconscionable that BAT thinks it is ok to change a law on one continent in order to target vulnerable populations on another,” ATCA wrote.
“In Sudan and other countries in Africa, people need food, medicine and other lifesaving supports. What they do not need is kiddie packs of cigarettes that put them at increased risk of tobacco addiction, diseases and death. And we know that once BAT gets kiddie packs into one country, they will make their way across Africa.”
July 7, 2024
BAT to Introduce Vape Vending Machines

Photo: evannovostro
BAT plans to introduce vape and nicotine pouch vending machines in pubs in the U.K., according to Better Retailing.
The company is hiring at least 12 representatives to target on-trade establishments with the aim of “securing new locations for vending machine and other business development solutions to ultimately increase sellout of specific BAT-related products.”
Areas being targeted include Basingstoke, Birmingham, Bury St. Edmunds, Cambridge, Coventry, Crawley, Edinburgh, Exeter, Maidstone, Reading, Royal Tunbridge and Sevenoaks.
Six-month trial contracts are set to start on June 24 “with ambition to extend into 2025 and beyond.”
“BAT U.K. is excited to be working on a project to sell our Vuse and Velo brands via age-gated vending machines,” said a BAT spokesperson. “At BAT, our purpose is bold: to build A Better Tomorrow. We will do this by reducing the health impact of our business, including by reaching our adult consumers where they use our alternative nicotine products. Vending machines represent an exciting opportunity to further deliver on our purpose.”
In response to concerns about underage use, BAT stated that their “machines will use best-in-class age verification to ensure that this essential principle is maintained.”
June 20, 2024
China Tobacco and BAT Meet in Beijing

Photo: Stephen Finn
Zhang Jianmin, director of China’s State Tobacco Monopoly Administration and general manager of China National Tobacco Corporation, met with a high-level BAT delegation in Beijing, according to Weixin
The companies reportedly held “friendly talks.”
Others in attendance included Wang Gongcheng, member of the Party Leadership Group of the National Bureau and deputy director, heads of the State Administration Office (foreign affairs department), the development planning department, China Tobacco Sales Corp. and China Tobacco International.
June 13, 2024
Pakistan Urged to OK Small Packs for Exports

Photo: Alexandr Byerdugin
Pakistan Tobacco Co. (PTC), a BAT subsidiary, is lobbying the Pakistan government to allow export of 10-piece cigarettes packs to Sudan, reports The Guardian. Pakistan is one of more than 80 countries that prohibits the sale or manufacture of 10-piece cigarette packs. Sudan, by contrast, permits such packs.
In a letter to the government, PTC said it “received a new export order to manufacture for Sudan, which includes packs of 10 cigarettes.”
PTC told the government that exempting export orders from the 10-cigaratte pack ban would benefit Pakistan as the order is worth $20.5 million and could be repeated.
Health activists urged the government to deny the request. “It is beyond shameful that British American Tobacco is seeking to alter the law in Pakistan so that it can flood an African country in crisis with cheap cigarettes,” said Mark Hurley, vice president of the Campaign for Tobacco-Free Kids. Sudan is currently in the midst of a civil war.
According to Hurley, over 80 countries have banned sales of small packs, requiring at least 20 cigarettes per pack, “because evidence shows these cheap packs are used to target kids and vulnerable populations.”
“Exploiting not only this knowledge but a country facing a humanitarian crisis is the behavior of a company that will truly stop at nothing to sell and addict more people to cigarettes,” he said.
BAT countered that the export order was intended to replace domestic manufacturing by its Sudanese subsidiary Blue Nile Cigarette Co. (BNCC), which is based in Madani, where there has been heavy fighting in the civil war.
“To ensure the continuity of products to meet consumer demands in Sudan, which predominantly operates in cigarette packs of 10, Pakistan was given the export order to supply to BNCC,” said a BAT spokesperson. “The clearance for the export order of cigarette packs of 10 from Pakistan to Sudan is pending regulatory approval by the government of Pakistan. The clearance complies with all local laws and regulations in Sudan.
“For any products manufactured by BAT, we abide by strict marketing principles to prevent marketing and sales to underage [consumers]. These measures include prominent 18-plus age warnings on packaging as well as our communications.”
June 11, 2024