Tag: British American Tobacco

BAT Appoints Tadeu Marroco as CEO

Tadeu Marroco | Photo: BAT
BAT has appointed Tadeu Marroco as CEO to succeed Jack Bowles, who is stepping down from the board of directors May 15.
Marroco joined BAT in 1992 and was appointed to the BAT board in 2019 as group finance director. He has also served on the BAT management board since 2014, with previous roles including regional director for Europe and North Africa and group transformation director. A comprehensive search for a new group finance director will now commence. Javed Iqbal, who has had an extensive finance career in the group and is currently the director of digital and information, will take on the role of interim group finance director until a permanent successor has been appointed.
“Since our ‘A Better Tomorrow’ strategy was articulated in 2019, we have achieved clear momentum in our New Categories business, have established leadership in key markets and expect to deliver New Categories profitability earlier than originally planned,” said BAT chair Luc Jobin in a statement. “During this time, we have also continued to deliver solid financial results and have returned over £20 billion [$25.03 billion] to our shareholders. On behalf of the board, I would like to thank Jack for his significant contribution as chief executive during this important period.
“To fully deliver on our transformation in a fast-changing environment, we must continue to evolve as a high-performing and agile consumer goods company. In considering succession, the board recognized Marroco’s outstanding track record of developing teams that deliver on our transformation alongside a consistent focus on strong execution and financial performance. We are confident that under his leadership we will further strengthen our relationships with key stakeholders and continue to build A Better Tomorrow and deliver long-term sustainable value for our shareholders.”
“I am honored to be appointed as chief executive of BAT. I wish to thank Jack, who has been instrumental in establishing our A Better Tomorrow strategy,” said Marroco. “Having been at the center of the formulation of this strategy, I am convinced that this is the right strategic path for BAT. In this dynamic environment, I remain firmly committed to focusing on results delivery through executional excellence.
“Throughout my 30-year career with this great company, inclusivity and collaboration have always been at the heart of my leadership approach. My commitment as the new chief executive will be to nurture the passion in BAT for our people, our consumers and our brands. My management team and I will continue to build an increasingly agile and progressive BAT.”
“It has been my privilege to lead BAT since 2019,” said Bowles. “In the last four years, we have set out to transform the business toward ‘A Better Tomorrow’ through a focus on growth of New Category consumer brands, which account for almost £3 billion of revenue. It is now the time for a change of leadership to take the business to the next level.”

In considering succession, the board recognized Tadeu’s outstanding track record of developing teams that deliver on our transformation alongside.
Luc Jobin, Chair, BAT
“As I leave, I thank all my colleagues and the board for their support and dedication to this strategy and to the transformation of the business which we achieved. After 20 years in the company I look forward to my next steps. I wish my successor Marroco , who has been our group finance director for four years, and the great team at BAT, all the success to continue the journey. Given the quality of BAT’s talent pipeline, I am confident that BAT will continue to be successful.”
May 15, 2023
BAT to Upgrade Bangladesh Factory

Image: Piotr Pawinski
British American Tobacco Bangladesh plans to invest BDT607 million ($5.65 million) in equipment and a centralized uninterrupted power supply device, reports The Daily Star.
In Dhaka Stock Exchange filing, the multinational company said its board has approved the investment decision.
The company will use the money to purchase winnower tobacco recovery equipment, a hinge-lid cigarette making and packing line, and a centralized uninterrupted power supply device.
The investment would enhance the capacity and productivity of the company and would be funded from internal sources and bank financing, the filing said.
May 12, 2023
Betting on Weed

Photo: contentdealer
BAT has further increased its investments in the cannabis industry.
By Stefanie Rossel
In its endeavor to transform its business, initiated in 2020 under the slogan “A better tomorrow,” BAT is increasingly focusing on the cannabis sector to diversify beyond tobacco and nicotine. Two years after its first venture into the hemp market, the group currently has partial stakes in 13 cannabis startups, more than any other tobacco company, according to Seeking Alpha, a financial services provider.
BAT’s most recent move in this direction is a joint venture with Denver, Colorado-based cannabidiol (CBD) producer Charlotte’s Web Holdings in early April. BAT’s subsidiary AJNA Bio Sciences, a botanical drug development company focused on mental health and neurological disorders, has teamed up with Charlotte’s Web and is contributing $10 million as the joint venture’s initial investor. AJNA was co-founded and is partially owned by its president, Joel Stanley, the former CEO and chairman of Charlotte’s Web, together with other founding members of Charlotte’s Web.
The aim of the cooperation is to develop from propriety Charlotte’s Web hemp genetics a botanical drug targeting a neurological condition and pursue approval by the U.S. Food and Drug Administration. While the joint venture did not disclose the neurological condition, observers suspect that the drug is aimed at the treatment of seizure disorders. Charlotte’s Web is also the name of a hemp strain from which an oil can be made that can be used to treat Dravet syndrome and other epilepsy diseases.
The strain, which contains 17 percent CBD and 0.5 percent of the psychoactive ingredient tetrahydrocannabinol, was bred in 2011 by the Stanley brothers to treat a young girl suffering from a severe form of pediatric epilepsy that did not respond to commonly used anti-epileptic drugs. Encouraged by the patient’s positive response to their CBD oil, the brothers established a nonprofit organization to give seizure patients access to high-quality cannabis with a high CBD content. With their advocacy, they helped change laws and public perceptions relating to plant-based solutions. Nevertheless, their product did not become the first treatment derived from cannabis plants to receive FDA authorization. That honor fell to Epidiolex, which contains only CBD and was approved by the agency in 2018.
The joint venture, in which BAT holds a 20 percent stake and Charlotte’s Web and AJNA have a 40 percent stake each, will be led by representatives of all three companies. Its clinical and regulatory strategy will be led by Orrin Devinsky, who was a principal investor in the FDA approval of Epidiolex. Apart from being AJNA’s chief medical advisor, he is also the director of New York City University Langone’s Comprehensive Epilepsy Center. The joint venture wants to file an investigational new drug application and commence phase I clinical development in 2023.
In November 2022, BAT paid £48.2 million ($60.36 million) for a 19.9 percent stake in Charlotte’s Web, a leading company in hemp extract products and the only publicly traded CBD B Corp-certified company. According to its latest financial reports, Charlotte’s Web generated revenues of $74.13 million in 2022.
In mid-March, a major shareholder urged BAT to move its primary stock market listing from London to New York. About 60 percent of BAT’s profits come from the U.S. while only 1 percent is generated in the U.K. With a move to the U.S., analysts argued, the FTSE 100-listed company would not only gain an investor base with greater appreciation of reduced-risk products but also be better equipped if it wanted to venture into the cannabis markets. U.K. law prohibits a company from listing if its profits are sourced from recreational cannabis, even if they are earned in a jurisdiction where marijuana is legal. Although similar restrictions currently exist in the U.S., analysts expect these issues to be addressed in the near future.
With its recent investments, BAT continues its exploration of the cannabis business, which started in March 2021, when it acquired a minority stake in Organigram Holdings of Canada for CAD221 million ($175 million at the time). Canada legalized cannabis in October 2018. Through a number of acquisitions and organic growth, Organigram has since become the second-largest licensed cannabis producer in Canada.
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.

May 1, 2023
BAT Settles Investigation

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BAT has reached an agreement with the U.S. Department of Justice (DOJ) and the Office of Foreign Assets Control (OFAC) to resolve investigations into suspicions of sanctions breaches concerning business activities relating to the Democratic People’s Republic of Korea between 2007 and 2017.
BAT has entered into a deferred prosecution agreement with the DOJ and a civil settlement agreement with the OFAC, and an indirect BAT subsidiary in Singapore has entered into a plea agreement with the DOJ. The total amount payable to the U.S. authorities is $635.24 million plus interest.
Under the agreement, BAT cannot comment on the documentation published by the investigating authorities or on related factual matters.
As announced in its half-year report of 27 July 2022, BAT recognized a provision of £450 million ($540 million) in line with the International Accounting Standards 37 requirements. its full year 2023 group guidance is unaffected by this announcement.
“On behalf of BAT, we deeply regret the misconduct arising from historical business activities that led to these settlements and acknowledge that we fell short of the highest standards rightly expected of us,” said BAT CEO Jack Bowles in a statement.”
“Adhering to rigorous compliance and ethics standards has been, and remains, a top priority for BAT. In recent years, we have transformed our compliance and ethics program, which encompasses sanctions, anti-bribery, anti-corruption and anti-money laundering. The significant steps already taken, as well as the continued refinements to the program that will be made as part of these settlements, will leave us even better equipped to lead a responsible and sustainable business.”
April 26, 2023
Court Rejects Challenge to PMI Heating Patents

Image: nimalGraphic
The High Court of Justice in London ruled April 17 that Philip Morris Products’ (PMP) patents protecting a tobacco-heating technology are valid, reports Law360. The ruling represents a defeat for BAT and its Nicoventures subsidiary, which had sought to revoke PMP’s patents.
While considering the patent valid, the court also said that BAT’s Glo heated-tobacco products did not infringe the patents, heading off an infringement counterclaim filed by PMP.
The April 17 ruling is the latest chapter in an ongoing intellectual property dispute between the tobacco giants.
PMP initially sued BAT and Nicoventures, claiming they infringed several of its tobacco-heating technology patents. This prompted BAT and Nicoventures to file counterclaims seeking to invalidate the patents.
The proceedings have now branched off into several different actions before the High Court.
In the current case, Nicoventures argued, among other things, that the PMP technology was obvious in light of a 1998 patent application referred to as “Pienemann,” which covers a “system for providing an inhalable aerosol.”
While Pienemann, like PMP’s technology, has multiple heating elements, Judge Michael Tappin said that a skilled team would consider the multiple heaters to “mimic” one heater. Pienemann also did not specify the inclusion of a thin-film heater as seen in the PMP patent, instead describing a “graphite loaded sheath,” according to the judgment.
Regarding the infringement claim, Tappin said that BAT’s Glo products did not infringe the patents because they did not include a method of allowing different parts of the heating system to be heated at different times.
April 19, 2023
BAT Chair Lauds Progress in 2022

Luc Jobin (Photo: BAT)
BAT made great progress against its strategy in 2022 despite a challenging external environment, according to chairman Luc Jobin.
Speaking at the company’s annual general meeting on April 19, Jobin noted that BAT’s new category business delivered strong volume, revenue and market share growth. The group, he said, delivered a 150 basis points improvement in adjusted operating margin at current rates and delivered another year of 100 percent operating cash conversion. “We also returned £6.9 billion ($8.57 billion) to shareholders through dividends and share buybacks,” said Jobin in a statement.
Around 15 percent of BAT’s revenue is now generated from noncombustible products, a twofold increase since 2018, according to Jobin. “At the end of 2022, we had 22.5 million consumers of our noncombustible products,” he said. “The upward trajectory, and the momentum we have, provides a clear pathway to reaching our goal of 50 million consumers by 2030.”
While expressing satisfaction with the progress BAT had made in transitioning smokers toward less harmful nicotine products, Jobin noted that BAT could not reduce the health impact of its business by itself.
“Policymakers, regulators and public health advocates must help build the science base and create the policy frameworks necessary for adult smokers to switch to less risky alternatives,” he said.
“As a board, it is our responsibility to make sure that BAT’s own transformation continues apace.”
April 19, 2023
Glo Hyper Under Scrutiny

Photo: BAT
Italian regulators are investigating BAT and Amazon for potentially misleading advertising for the Glo Hyper X2 tobacco-heating product, reports Reuters.
According to the Italian Competition Authority, the companies have made it insufficiently clear to consumers that Glo Hyper X2 is a nicotine-based product and that it is intended for an adult audience. The agency also said it had seen the product being marketed as “nicotine-free.”
“The omission and/or deceptiveness of this essential information” in advertising could influence consumers’ decisions and expose them, “minors in particular,” to the risk of unknowingly damaging their health, the Competition Authority said.
A spokesperson for BAT said the company was committed to responsible marketing in addition to the requirements set by local applicable laws.
“We are available to cooperate with the Italian Competition Authority to ensure a swift conclusion of these proceedings,” the spokesperson added.
April 18, 2023
Illegal Levels of Liquid in U.K. Disposables

Photo: YarikL
Nearly all major disposable vaping brands on the U.K. market that are not produced by a major tobacco manufacturer contain illegal levels of e-liquid, reports Better Retailing, citing BAT testing data shared by senior wholesale sources.
In a letter sent to wholesalers seen by Better Retailing, BAT said it had commissioned an independent accredited laboratory to test Elf Bar 600 products purchased from supermarkets and independent retailers between Sept. 6, 2021, and March 7, 2023.
The evidence reportedly revealed that the tested products contained significantly more than the U.K. legal limit of 2 mL of nicotine-containing e-liquid from 2.76 mL to 3.88 mL, with an average overfill of 58 percent.
Tests performed on Lost Mary, Found Mary, IVG Bar, Klik Klak, SKE Crystal, Smok Mbar Pro and Solo disposable vapes also showed illegal levels of e-liquid, according to the report.
Together, the brands account for nearly all disposable vaping sales in independent shops by both revenue and volume.
Senior wholesale sources welcomed BAT’s efforts to “clean up” the disposable vaping market but also challenged the claims made, stating they would wait on independent testing and regulatory guidance before taking action. The sources noted that BAT would likely see its market share of the disposable vaping market increase significantly if regulators took action against its rivals.
BAT stated that the results of tests have been shared with the Medicines and Healthcare products Regulatory Authority.
March 20, 2023
BAT Urged to List in New York

Photo: kmiragaya
GQG Partners is pressuring BAT to move its primary listing to New York, according to the Financial Times. The shareholder reportedly believes it “makes no sense” for the cigarette manufacturer to remain on the U.K. stock market.
A BAT spokesperson said that the company does not comment on engagement with shareholders when contacted by Reuters while GQG did not respond to a request for comment on the report.
March 16, 2023
BAT Restructures its Operations
Photo: BAT
British American Tobacco is restructuring its operations to streamline and accelerate the transformation of its business. The new structure will feature fewer but larger business units to improve collaboration and speed up decisionmaking.
“As our transformation journey towards our strategic milestones gathers pace, we need to further sharpen our operating model, streamline our business to drive agility, and continue to enhance organizational capabilities,” said BAT CEO Jack Bowles in a statement.
“As part of our commitment to building ‘A Better Tomorrow,’ the changes we have announced today will drive increased focus, accelerate our transformation and fuel growth as we strengthen the foundations of our future as a category-led enterprise.”
BAT will reduce the number of regions from four to three, and the number of business units from 16 to 12, while also accelerating its market exit plans. After the restructuring, the company will have the following regions: USA (Reynolds American Inc.), Americas & Europe (AME), and Asia Pacific, Middle East & Africa (APMEA)
In addition, two new management board roles will be created in order to ensure clarity of ownership, accountability and focus: chief transformation officer and director, combustibles.
The chief transformation officer will be responsible for driving faster transformation, accelerating greater capability build in key areas and enabling an even faster, simpler and more agile organization. The director, combustibles will lead the focus on driving value from combustibles to fuel further investment in new categories.

The changes we have announced today will drive increased focus, accelerate our transformation and fuel growth as we strengthen the foundations of our future as a category-led enterprise.
Jack Bowles, CEO, BAT
The following structural changes and appointments will take effect April 1, 2023:
Johan Vandermeulen, currently regional director, Europe, will be appointed to the new role of chief transformation officer
Luciano Comin will be appointed to the new role of director, combustibles
Frederico (Fred) Monteiro will be promoted to the management board as regional director, AME
Guy Meldrum will continue to lead BAT’s largest business in the USA as president, Reynolds American Inc.
Michael Dijanosic will take on an expanded role as regional director, APMEA
Javed Iqbal, director, digital and information, will work with the regional directors and chief transformation officer to ensure that the digital and information agenda is fully aligned with BAT’s corporate transformation
The president of Reynolds American Inc. and regional directors for AME and APMEA, and the director, digital & information, will report to the chief transformation officer. The director, combustibles will report to the chief growth officer.
Vandermeulen joined the management board in 2014 and has extensive leadership experience across BAT, previously leading the Asia Pacific and Africa & Middle East regions, following general and marketing management roles in Russia, Turkey and as a global brand director. Vandermeulen will report to Bowles.
Comin was regional director, Americas & Sub-Saharan Africa, prior to which he held senior general and marketing management positions in Europe, Mexico and Malaysia.
Monteiro has spent more than 20 years with BAT, most recently as area director of central Europe south, based in Romania. Prior to this role, Monteiro has held numerous senior leadership positions including marketing director, next generation products; head of marketing for the Europe Region and general manager, BAT Japan.
Further, David O’Reilly, director, research and science, will step down from the management board on Feb. 28, 2023, and leave BAT with effect May 31, 2023, to pursue other interests.
O’Reilly joined the management board in January 2012, and has been instrumental, both internally and externally, in driving the science agenda that has underpinned BAT’s transformation.
O’Reilly will be succeeded by James Murphy, currently executive vice president of scientific research and development at Reynolds American Inc.
Murphy has been with BAT for over 17 years and has held a number of senior roles in the center in R&D, operations and marketing as well as in the Americas and Sub-Saharan Africa region. Murphy will join the management board as the director, research and science designate, with effect from Feb. 1, 2023, before assuming the role of director, research and science, reporting to the CEO, on March 1, 2023.
January 31, 2023