Tag: British American Tobacco

Malaysia: Action Urged Against Illicit Market

Photo: BAT
British American Tobacco (BAT) Malaysia has urged its shareholders to speak up against the illicit trade in cigarettes, which has severely impacted the company’s financial performance in the country, reports the New Straits Times.
BAT Malaysia’s profit from operations declined 24.9 percent to MYR478 million ($111.8 million) for the financial year 2019.
According to BAT Malaysia Managing Director Jonathan Reed, continued growth of the black market has forced the company to aggressively manage its cost base.
“This is not sustainable in the long term,” said Reed at BAT Malaysia’s 59th annual general meeting on June 15. “To effectively stop the black market, more drastic and radical actions are required.”
For 2020, BAT Malaysia said its growth strategy would depend on the recovery of the legal tobacco market, a regulated nicotine landscape, sensible fiscal policies and a resolution to the affordability issues affecting consumers.
“We are ready to invest our resources to continue tackling this issue,” said Reed. “However, full recovery can only happen if we are able to work hand-in-hand with all relevant parties to implement effective structural reforms to manage the extraordinarily high levels of illegal trade.”
June 16, 2020
Reintroduction of Zim Dollar Dampens Cigarette Sales

Zimbabwe’s previous currency was rendered worthless by hyperinflation.
Photo: Taco Tuinstra
The reintroduction of the Zimbabwean dollar late last year has taken a toll on legal cigarette sales, reports New Zimbabwe.
Market leader British American Tobacco experienced a 17 percent drop in sales for the fiscal year that ended Dec. 31, 2019. The company attributed the decline to the weakening of the Zimbabwe dollar, which has eroded disposable incomes and forced people to cut down on smoking.
“It was a challenging year for the business mainly driven by significant changes to the macroeconomic policies and in particular, the introduction of the Zimbabwe dollar that was floated against the U.S. dollar,” said company Chair Lovemore Manatsa.
Manatsa said the local currency devalued against major trading currencies further impacting consumer disposable incomes, which saw inflation increasing to 521 percent by the end of December 2019.
Zimbabwe replaced its currency in 2009 with the U.S. dollar to stop hyperinflation. In November 2019, Zimbabwe’s central bank reintroduced the currency to ease a severe cash shortage, but the new Zimbabwe dollar too is quickly losing value.
June 15, 2020
BAT Shares Down on Lower Growth Projections

Photo: BAT
Shares in British American Tobacco (BAT) fell almost 4 percent after it lowered revenue and profit growth estimates for this year by a couple of percentage points each.
In adjusting its guidance, BAT pointed to a worsening outlook for an industry that had previously reported little impact from the coronavirus pandemic on sales and operations.
The company also pushed back its target for reaching £5 billion ($6.3 billion) in sales from next-generation products like e-cigarettes to 2025 from 2023–2024.
At the start of the pandemic, BAT insisted the coronavirus disruption was having little impact on consumer demand. During a recent conference call, however, CEO Jack Bowles said that earlier numbers had covered periods when many of its markets were still in the early stages of lockdowns.
BAT now expects adjusted revenue growth of 1–3 percent this year instead of 3–5 percent while earnings per share are anticipated to be up by a mid-single digit rather than a high-single digit percentage.
Nonetheless, the company will continue its dividend policy of paying out 65 percent of profit.
“All things considered, British American Tobacco has been doing relatively well against a very difficult backdrop,” said Russ Mould, investment director at AJ Bell.
June 10, 2020
Trading Update: BAT’s Business ‘Resilient and Growing’

Photo: British American Tobacco
British American Tobacco’s (BAT) business is performing well in a challenging and volatile trading environment, the company announced in a trading update today.
BAT said it continues to see good pricing and strong volume and value share growth across its combustibles business, together with good share growth across all three of its new categories—vapor, tobacco heating and modern oral.
Results in developed markets—which account for approximately 75 percent of the group’s revenue—are strong, with continued good pricing, little evidence of accelerated downtrading to date and a particularly strong performance from its business in the U.S., which has been highly resilient throughout the Covid-19 crisis.
The impact of Covid-19 in emerging markets, including Bangladesh, Vietnam and Malaysia, has been more pronounced, according to BAT. In addition, closures and other lockdown measures in certain countries, in particular South Africa, Mexico and Argentina, have persisted longer than anticipated.
“We have made a good start to the year, with strong volume and value share growth in combustibles underpinning the sustainability of the business,” said BAT CEO Jack Bowles.
“Our focus on becoming a faster, simpler, more agile business through Project Quantum has positioned us well for continued delivery in the current environment and these efforts have ensured we are a highly resilient company.”
Bowles also referenced the work of its Kentucky Bioprocessing subsidiary, which is developing a potential vaccine for Covid-19. The vaccine candidate has demonstrated its ability to generate an immune response in pre-clinical testing and is poised to move to clinical trials.
June 9, 2020
BAT Slammed for ‘Tattling’ on JTI Menthol Substitutes

Photo: simisi1 from Pixabay
Bob Blackman, chairman of the U.K. All Party Parliamentary Group on Smoking and Health, has criticized British American Tobacco (BAT) for leaking information about products made by Japan Tobacco International (JTI) following the ban on menthol cigarettes sold in the European Union, reports I News.
Blackman said he received a letter from BAT that claimed it had data showing that a new range of JTI cigarettes still contained menthol. “As I responded, their offer is completely inappropriate; their public duty is to share the evidence with the appropriate authorities without delay,” said Blackman.
A spokesman for BAT said the group had analyzed several JTI products and found them to contain menthol characteristics.
While admitting its new cigarettes contain menthol, JTI insisted they do not break the new laws.
“Some JTI cigarettes and rolling tobacco sold in the U.K. do still contain very low levels of menthol,” a spokesman for JTI said. “This is not prohibited under the law, provided that the use of such flavorings does not produce a clearly noticeable smell or taste other than one of tobacco—which they do not.”
Blackman said he had forwarded a copy of the letter to Public Health Minister Jo Churchill who responded that the issue was “being followed up” by her officials to investigate.
June 8, 2020
BAT Opens Threshing Plant in Fiji

Photo: HeikoBrown from Pixabay
British American Tobacco (BAT) has opened a $10-million green leaf threshing factory in Votualevu, Fiji.
Speaking at the inauguration, Minister for Economy Aiyaz Sayed-Khaiyum said cooperation from all stakeholders and sectors of the economy will ensure there are job sustainability and creation in the country.
The new factory, he added, will not only provide high-quality products to consumers but also create more employment opportunities.
BAT’s local general manager, Jeremy Hackett, said the new factory represents the culmination of more than two years of planning and hard work.
“Fiji is one of the very few countries where BAT undertakes tobacco farming to support the growth of local agriculture, providing employment to approximately 1,100 seasonal workers and hundreds of local farmers,” he said.

June 8, 2020
BAT Launches E-cigarette Subscription Services

Photo: British American Tobacco
British American Tobacco (BAT) has launched personalized subscription services for its Vuse and Vype e-cigarette brands. With a variety of plans to choose from, vapers can sign up for monthly deliveries that offer “value, convenience and personalization.”
In the United Kingdom, BAT has introduced two monthly subscription services focusing on its award-winning Vype ePen3 and Vype ePod.
Each subscription plan includes a Vype ePen3 or Vype ePod every three months with a 25 percent saving on a three-month plan or a 33 percent saving on a six-month plan, both with no delivery charges. Each plan requires a minimum order of six packs per month.
In the United States, BAT continues to offer its popular Vuse Alto pod subscription service that includes a 10 percent discount on pods and free delivery.
June 5, 2020
Shots on Goal
Two tobacco plant-based vaccine candidates have entered the race for a serum against Covid-19.
By Stefanie Rossel

Photos: British American Tobacco
As the coronavirus pandemic continues to take a devastating toll around the world, the race for a vaccine against Covid-19 among pharmaceutical and biotech companies, universities, research institutes and other stakeholders has accelerated. According to a report by Verband Forschender Arzneimittelhersteller, the German association of researching drug manufacturers, there were more than 70 vaccine projects for the novel coronavirus SARS-CoV-2 globally in early April. The aim of such a vaccine is to create an adaptive immune response in the form of antigens in the vaccinated person that will protect against an invading microorganism and the disease it causes, in this case an infection with the coronavirus. Vaccines, which are biological preparations, are considered the most effective preventive measures against infectious diseases.
Coronaviruses, a group of viruses that belong to the family Coronaviridae, have always been around. Infections caused by other members of that family include severe acute respiratory syndrome (SARS), which appeared in 2002 to 2003, and the Middle East respiratory syndrome (MERS), which appeared in September 2012. On both occasions, vaccines were developed, but to date, none of them has received drug approval—in comparison with other infectious diseases, such as influenza and HIV, SARS and MERS produced relatively few and locally restricted cases, thus lowering the willingness to further invest in vaccine development. Nevertheless, this earlier research may now help scientists in their quest for an antidote against SARS-CoV-2, which, with its high transmission rate and resulting numerous deaths, is of a different caliber.
To combat the novel virus, scientists have a range of processes at their disposal. Depending on the disease-causing agents, how it infects the cell and how the immune system responds to it, they decide which type of vaccine might be the most promising. Current options include live attenuated vaccines, which use a weakened form of the virus or bacteria that causes a disease, and inactivated vaccines that contain bacteria or viruses that have been killed by a chemical treatment or heat. Subunit, recombinant, polysaccharide and conjugate vaccines use specific pieces of the virus or bacteria—like its protein, sugar or capsid. Finally, toxoid vaccines use a toxin made by the virus or bacteria that causes a disease.
In the production of vaccines, embryonated chicken eggs play an important role. In 1931, they were discovered to be the perfect bioreactors for growing viruses and thus the best tool to produce vaccines. Almost 90 years later, 95 percent of all flu vaccine doses still contain egg-grown viruses, according to the German Max Planck Society. It’s easy to imagine that this production process will quickly near its limits in the case of a pandemic that affects millions of people.

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Tobacco as a bioreactor
Enter tobacco. Since the early 2000s, the plant has proven its potential as a highly efficient biopharmaceutical producer of vaccines—more precisely, of recombinant therapeutical proteins. Basically, the process involves identification and reception of genetic sequences from a pandemic strain to produce a virus-like particle (VLP). VLPs resemble a virus, allowing them to be recognized readily by the immune system; however, they lack the core genetic material, making them noninfectious and unable to replicate. Before the genetic construct representing the protein of interest is inserted, plants are seeded, germinate and grow. They are then genetically modified with the VLP—or antigen—in a technique known as transient expression. With this transformation, plants incubate for several days during which they are reproducing the target protein. At this point, they are harvested and crushed to create a green juice slurry. This liquid passes through filtration processes and sophisticated purification techniques to produce a final product. Reportedly, the process, which employs Nicotiana benthamiana, a close relative of the tobacco type used for cigarette manufacture, can deliver a vaccine for testing in less than a month after production of the VLP.
In a virus outbreak such as the current one, rapid serum production of scale is vital. Two biopharmaceutical companies working with tobacco-based systems joined the race early on for a vaccine. Medicago, a privately held Canadian biotech company in which Philip Morris International bought a stake in 2008, in April announced that its candidate coronavirus vaccine could be ready for human trials by July or August; the company plans to submit a dossier to authorities to get approval for the drug by November 2021.

Kentucky Bioprocessing’s plant-based vaccine has several potential advantages over conventional serum production technology, including safety, speed of development and stability at room temperature.
Advantages over conventional technologies
David O’Reilly
The other player is U.S.-based Kentucky Bioprocessing (KBP), a subsidiary of British American Tobacco (BAT). The company’s candidate vaccine uses BAT’s proprietary fast-growing plant technology and TAP platform, a new system for vaccine production that allows antigen selection closer to the time it is needed to avoid mutations. The serum is presently also in the pre-clinical testing phase that is expected to finish soon. “We have been engaging with government agencies to bring our candidate vaccine to clinical testing as soon as possible,” explains David O’Reilly, BAT’s director of scientific research. On May 15, the company announced that it was ready to start testing its vaccine on humans once it gets approval from the U.S. Food and Drug Administration (FDA).
Through collaborations with government and third-party manufacturers, KBP hopes to produce between 1 million and 3 million doses per week from June, says O’Reilly. “We will be ready to start clinical trials in late June and start manufacturing in parallel. It is impossible to say when it will be available, and this will become clearer when we know what testing governments will require.”
The plant-based vaccine has several potential advantages over conventional serum production technology, according to O’Reilly. “It is potentially safer given that tobacco plants can’t host pathogens which cause human disease. It is faster because the elements of the vaccine accumulate in tobacco plants much more quickly and with high fidelity—six weeks in tobacco plants versus several months using conventional methods. The vaccine formulation KBP is developing remains stable at room temperature, unlike conventional vaccines, which often require refrigeration. And it reproduces the antigen with high fidelity every time without making unwanted changes.”
He is not worried about the frequent headlines about the progress of other conventional vaccine manufacturers. “This is noncompetitive, and BAT is fully prepared to work with other vaccine companies with our unique vaccine development technologies,” says O’Reilly. “As such, BAT is looking for help from governments to accelerate clinical trials to demonstrate the candidate vaccine is safe and effective. We also need help with downstream manufacturing in terms of conjugation and dispensing and are open to working with governments and other partners to build scaled-up manufacturing.”

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Long-winded approval process
Even though other candidate vaccines appear to be one step ahead, it doesn’t mean that they will be the first and only ones that become approved and commercially available. Each new vaccine project must go through a six-stage process to get approval by the FDA or the European Medicines Agency. The stages include analysis of the virus, design of the vaccine and animal testing in the pre-clinical phase, which is followed by trials with volunteers, approval procedure and mass production of the vaccine. Although the process has been significantly accelerated in recent years due to new technology and previous experience with serum developments against related viruses, it may nevertheless take up to 36 months—under normal conditions. Will the unprecedented dimensions of the Covid-19 pandemic speed up matters?
“Testing any vaccine candidate for safety and efficacy is paramount. This requires extensive and complex clinical testing and evaluation of the results,” O’Reilly explains. “During clinical testing and through pharmacovigilance, i.e., drug safety assessment, potential side effects can be identified. If they are serious then this is likely to mean the vaccine will not be authorized for use. Under pandemic emergency situations, regulators have the option of ‘emergency use authorization.’ The U.S. FDA authorized our ZMapp Ebola treatment through this pathway in 2014.”
Together with Mapp Biopharmaceutical, KBP developed an Ebola drug that came to be considered the standard of care after a small study suggested it might reduce mortality rates. Long-term studies, however, showed that the treatment didn’t provide the anticipated degree of protection, so it failed to receive permanent approval.

Each new vaccine project must go through a six-stage process to get approval by the FDA or the European Medicines Agency.
Costly development
Time can become the decisive hurdle in drug development. History has shown that the search for a suitable vaccine sometimes is too slow: In 2009, the swine flu outbreak quickly waned, leaving drug makers sitting on their vaccine. “That’s a real problem and it remains to be seen how quickly vaccines can be developed, tested and approved in the case of Covid-19,” says O’Reilly. “We must also remember that there are other lines of attack being developed such as treatments to reduce the effects of the disease once contracted. There’s also an emerging view that SARS-CoV-2 may be with us for some time and return every year in the way that the seasonal flu virus does. If this happens then vaccines will play an important role.”
Historically, just 6 percent of vaccine candidates end up making it to market, according to a Reuters report. “Vaccine development is tremendously challenging and complex. Most candidates will fail during development, so it’s great news that so many candidates are being developed for Covid-19. Of the 75 plus in development, hopefully enough will succeed to cover the world’s needs,” says O’Reilly.
Developing a vaccine is also an enormous investment. According to the U.S. Biomedical Advanced Research and Development Authority, development of a vaccine and treatment will cost $1 billion each. “We are in the early days of this, and the costs are not yet significant. Total costs will become clearer when we better understand the testing requirements going forward,” says O’Reilly.
While remaining a commercial operation, KBP intends to carry out its Covid-19 vaccine work on a not-for-profit basis. “The most important issue here is to find a vaccine that beats the virus,” O’Reilly says. “It is about collaboration for the greater good and the benefit of society at large. That’s why for Covid-19, we are operating on a ‘not-for-profit’ basis.”
Stefanie Rossel is Tobacco Reporter’s editorial contributor. An experienced trade journalist, she combines sharp reporting skills with in-depth knowledge of the tobacco and vapor industries. Prior to joining Tobacco Reporter, Stefanie was editor-in-chief at Tobacco Journal International, where she worked for a decade. Fluent in English, German and French, Stefanie covers tobacco news around the world. She is based in Germany.

June 1, 2020
BAT to Resume Legal Action Against South Africa’s Tobacco Ban

Photo: Sang Hyun Cho from Pixabay
British American Tobacco South Africa (BATSA) will resume legal action against the country’s government’s decision to extend the ban on tobacco sales during Level 3 of the nationwide lockdown, reports Polity.
“BATSA has made every effort to constructively engage with the government since the ban came into force, including making detailed submissions, along with other interested parties, to various ministers, as well as directly to the presidency,” the company said in a statement.
“To date, no formal response has been received from the government, and BATSA has also not been included in any of the government’s consultation processes so far.”
The Fair Trade Independent Tobacco Association has already taken the government to court to challenge the ban in a separate case.
Minister of Cooperative Governance and Traditional Affairs, Nkosazana Dlamini-Zuma, argued that, while Covid-19 is a relatively new disease, early studies support the view that using tobacco products increases not only the risk of catching the disease but also the risk of contracting a more serious form of the disease.
“This, in turn, increases strain on the public health system, by increasing the number of people who will need access to resources such as intensive care unit beds and ventilators,” she said.
BAT said the ban threatens the survival of South Africa’s legal tobacco sector, which employs thousands.
May 29, 2020
Covid-19 Vaccine Ready for Human Trials, Says BAT

Photo: Pete Linforth | PixaBay
British American Tobacco (BAT) said on Friday it is ready to test its potential Covid-19 vaccine using proteins from tobacco leaves on humans, after it generated a positive immune response in pre-clinical trials, reports Reuters.
Once it gets approval from the U.S. Food and Drug administration (FDA) for the vaccine, the company plans to start testing on humans.
In April BAT announced it was developing a Covid-19 vaccine from tobacco leaves and could produce 1 million to 3 million doses per week if it got the support of government agencies and the right manufacturers.
Multiple companies from a variety of sectors have been racing to develop a vaccine for Covid-19, with some of the vaccines already in human trials. Experts have suggested that a Covid-19 vaccine could take 12-18 months to develop.
On Friday, BAT said it had submitted a pre-investigative new drug application to the FDA and that the agency had acknowledged the submission. BAT said it was also talking with other government agencies around the world about the vaccine.
The company said it has committed funds to conduct clinical trials, which it expects to start as early as late June. BAT has reportedly also invested in additional equipment to boost capacity.
May 15, 2020