Tag: United Kingdom

  • Focusing minds

    Focusing minds

    With the recent news that insect populations are being destroyed around the world at an alarming rate, many observers will be eager to read about how British American Tobacco is investing in sustainable agriculture.

    BAT on Friday published its 2018 Sustainability Report, which outlines its ‘work and progress across its three strategic focus areas of harm reduction, sustainable agriculture and farmer livelihoods, and corporate behaviour’.

    ‘Now in BAT’s 17th year of sustainability reporting, this report details how BAT is championing change in its business and industry and is transforming tobacco to create shared value for its consumers and stakeholders across the value chain,’ BAT said in a note on its website announcing publication of the report.

    One of the ‘highlights’ of the announcement said that the company was investing more than £60 million annually to promote sustainable agriculture and enhance farmer livelihoods.

    Another pointed to a ‘profile of BAT’s new digital farm monitoring system, and how it is improving sustainable agriculture and farmer livelihoods by helping to ensure that issues are identified and addressed in real time’.

    And yet another pointed to a ‘feature on child labour that outlines BAT’s commitment to combatting it within its business and supply chain, and its partnerships with stakeholders to drive industry-wide change’.

    Other environment-focused highlights are said to include ‘BAT’s research and initiatives to tackle the complex issue of cigarette filter littering’, and its ‘new carbon emissions reduction targets for 2030 as well as other targets to further reduce its environmental impact through reduced resource use, improved water stewardship and reduced waste’.

    The note’s first-mentioned highlights, however, concerned the company’s potentially reduced risk products.

    Jack Bowles, chief executive designate, was quoted as saying that BAT’s sustainability agenda would be key to its future success.

    “A culture of responsible behaviour is even more relevant in today’s world, and I firmly believe we all have a role to play in delivering with integrity,” he said.

    “It is also clear to me that our sustained investment in farming communities and our continued focus on issues such as responsible marketing, protecting human rights and excellence in environmental management means that we are in excellent shape for the future.”

  • JUUL joins UKVIA

    JUUL joins UKVIA

    JUUL Labs UK has joined the UK Vaping Industry Association (UKVIA), according to a joint press note issued yesterday.

    Since the UKVIA was formed by top vaping brands in 2016, it has been at the forefront of spreading the positive public health message about vaping to the UK’s smokers.

    “The UKVIA is a partnership of the leading most respected vaping brands in the UK,” John Dunne (pictured), director of the UKVIA was quoted as saying.

    “We only allow companies to become members if they share our ambition to set high standards for the industry and our aim to help the UK’s seven million adult smokers make a life changing switch to a safer alternative.

    “Our new code of conduct confirms the standards that all of our members follow every day as they work to grow and expand the dynamic vaping industry.

    “That’s why we are delighted that JUUL have decided to join the Association in recognition of our shared aims and values. We are excited to work with them to achieve the ambitious aims of the UKVIA.”

    Meanwhile, Dan Thomson, JUUL Labs UK’s MD said the UKVIA’s new code of conduct had been a crucial part of JUUL’s decision to join the Association.

    He made special note of the UKVIA’s Challenge 25, which was aimed at restricting youth access – a key policy that JUUL had enforced since it launched in the UK last year.

    “This is alongside a wider program of responsible measures that we have implemented exceeding regulatory or legal requirements, including sanctions for any non-compliant retailers on Challenge 25; two-factor authentication for purchase online; a limited range of adult-focused flavours; marketing which is entirely focused on adult smokers over 30 years; and zero presence on social media,” he said.

    “JUUL’s mission is to improve the lives of the world’s one billion adult smokers and to achieve this we are committed to having an open dialogue with government and stakeholders to promote vaping and its benefits over combustible cigarettes. Greater collaboration across the sector will provide both the wider industry and the UKVIA with a more credible voice to achieve our mission.”

  • Hospital vapors

    Hospital vapors

    The UK pro-smoking group Forest (Freedom Organisation for the Right to Enjoy Smoking) has called for the lifting of restrictions on vaping within hospital grounds.

    Fifty-five percent of National Health Service (NHS) trusts did not allow electronic cigarettes to be used outdoors last year, according to a report by Forest, Prejudice and Prohibition: Results of a study of smoking and vaping policies in NHS hospital trusts in England.

    This was despite Public Health England (PHE) advice that it should be made easier for people to vape on site.

    Forest is calling also for greater freedom for patients, visitors and staff who want to smoke cigarettes at hospitals.

    Freedom of Information requests were made to 200 NHS trusts in England by Forest, 170 of which provided a response.

    ‘Around 45 percent said they allowed e-cigarettes to be used outside in 2018 and 11 percent of trusts, mainly specialising in mental health, permitted vaping indoors,’ the research was said to have found.

    ‘However 14 percent said they were planning to amend their policies in 2019 to allow vaping outside buildings, in shelters or in wards.’

    Forest said vaping should be permitted in all outdoor areas at hospitals and inside buildings and on wards if management considered it appropriate.

    Seventy-six percent of NHS trusts did not allow cigarettes to be smoked anywhere on hospital grounds while 22 percent provided smoking shelters, the research also found.

    Meanwhile, thirty two percent of trusts said they had installed a button which triggers a recorded message when pressed by a member of the public or staff, to help deter smokers.

    Forest described the devices as ‘shame-a-smoker buttons’.

    “We welcome the fact that some trusts are reviewing their policies on the use of e-cigarettes, but adopting a more sensible approach to vaping shouldn’t come at the price of a complete ban on smoking,” Simon Clark, director of Forest, was quoted as saying.

    “Banning smoking on hospital grounds demonstrates a staggering lack of compassion for smokers who may be stressed, upset and in need of a comforting cigarette.

    “A reasonable policy would lift restrictions on vaping, but give those who prefer to smoke the option of sheltered smoking areas.”

    The NHS trust responses were collected between July and December 2018.

  • Accounting for judgment

    Accounting for judgment

    British American Tobacco has said that a provision of about £436 million will be charged to the Group’s consolidated income statement in 2019 following an appeals-court judgment in two class action lawsuits in Quebec, Canada.

    In a statement posted on its website, BAT said the Quebec Court of Appeal in Montreal, in a judgment made public on Friday, had upheld a trial court’s decision of May 2015 in respect of two Quebec class action lawsuits against its subsidiary, Imperial Tobacco Canada (ITCAN) and two other Canadian tobacco companies. As part of that decision, the defendants were required to deposit about C$1.1 billion into a court escrow account.

    ‘As part of the 2015 decision, ITCAN was required to place C$758 million (approximately £436 million) in escrow – the final payment of which was made in 2017,’ the note said. ‘This deposit was held as an asset on the Group’s balance sheet at the year-end (31 December 2018).

    ‘Following the 1 March 2019 judgment, the Board of Directors of ITCAN have reassessed the recoverability of the deposit and have determined that the asset’s recoverability is, under IFRS, less than virtually certain. ‘Consequently, a provision of approximately £436 million will be charged to the Group’s consolidated income statement in 2019. This will be treated as an adjusting expense.

    ‘There will be no impact from this charge to the ratio of adjusted net debt to adjusted EBITDA, with this decision having no impact to cash flow in 2019.

    ‘The Board of Directors of ITCAN and the Group are monitoring developments. As previously stated, ITCAN intends to seek leave to appeal this judgment to the Supreme Court of Canada.

    ‘British American Tobacco p.l.c. was not a party to the proceeding and is not a party to the judgment.’

  • Pointless gesture

    Pointless gesture

    Campaigners in the UK have criticised calls to raise the legal age for buying tobacco from 18 to 21.

    A press note issued by the smokers’ group Forest said this proposal had been included in a report by the All Party Parliamentary Group on Smoking and Health, which was run by the anti-smoking group Action on Smoking and Health (ASH).

    Other proposals were said to include further restrictions on the portrayal of smoking on television and in films, and introducing a levy on tobacco companies that would be used to fund further anti-smoking initiatives.

    “These proposals infantilise young adults,” Forest director Simon Clark was quoted as saying. “If you’re 18 and old enough to vote, drive a car and join the army you’re old enough to make an informed decision to smoke.

    “Raising the current age at which you can buy tobacco, or censoring films and TV programmes that try to depict real life, takes paternalism to a new level.

    “The real sickness in society is not smoking, which is in long-term decline across all age groups, but the creeping prohibition that is removing our ability to make choices and take personal responsibility for our own lives.

    “Ultimately, if you treat adults like children, don’t be surprised if they behave like children.”

  • BAT volume increased

    BAT volume increased

    British American Tobacco’s cigarette and tobacco-heating product (THP) volume during the 12 months to the end of December, at 708 billion sticks, was increased by about 3.3 percent on that of the 12 months to the end of December 2017, 686 billion.

    On a representative basis – as if BAT had owned Reynolds American Inc and other acquisitions completed during 2017 from January 1, 2017 – volumes fell by about 3.5 percent. BAT said that in its key markets volume was down by 2.7 percent, outperforming industry volume, which was estimated to be down by about 3.4 percent, leading to an increase in market share of 0.4 of a percentage point.

    Meanwhile, other tobacco volumes included that of oral pouches, up 93 percent (representative 10.5 percent) to 3.9 billion; that of other oral products, up 119 percent (-4.0 percent representative) to 14.6 million kg; that of vapor products, up 100 percent (35.5 percent representative) to 189 million pods; and that of other tobacco products (including roll-your-own and make-your-own tobaccos), down 6.6 percent (-7.5 percent representative) to 22 billion stick-equivalents.

    BAT’s revenue during the year to the end of December, at £24,492 million, was said to have increased by 25.2 percent on that of 2017.

    Profit from operations, at £9,313, was increased by 45.2 percent.

    Earnings per share (EPS), at 264.0p, and diluted earnings per share, at 263.2p, were down each down by 85.6 percent.

    The dividend per share was up by 4.0 percent to 203.0p.

    “BAT performed well in 2018, exceeding our target of high single figure adjusted constant currency EPS growth, whilst continuing to invest in long-term sustainable returns,” chief executive Nicandro Durante (pictured) was quoted as saying as part of the company’s preliminary announcement. “The full year effect of the RAI acquisition and a translational foreign exchange headwind of approximately six percent (on revenue and profit from operations) and seven percent (on EPS) distorted the Group’s results…”

    Durante said he recognised that “proposed potential regulatory changes” in the US had created some investor uncertainty. “We have a long experience of managing regulatory developments, a track record of delivering strong growth while investing for the future and an established multi-category approach,” he said. “I am confident that my successor, Jack Bowles, will continue to deliver a similar level of sustainable long-term returns as we accelerate our Transforming Tobacco agenda.

    “Looking into 2019 we are confident of another year of high single figure adjusted constant currency earnings growth and this confidence is reflected in our Board’s proposal to increase the dividend by four percent.”

  • New finance director for BAT

    New finance director for BAT

    Tadeu Marroco, who is currently British American Tobacco’s director, group transformation, is to succeed Ben Stevens as finance director.

    After 30 years with the company, Stevens is due to step down as finance director and retire from the company’s board on August 5.

    Before his appointment on August 5, Tadeu will be appointed deputy finance director with effect from March 1, in addition to his current role.

    Tadeu joined BAT in Brazil 26 years ago.

  • Covering all the bases

    Covering all the bases

    Philip Morris last night held a UK launch party for its latest range of IQOS heated tobacco and vaping products.

    The launch was held in the basement of the ME on the Strand, London, and the party at the hotel’s Radio Rooftop Bar.

    Participants were given the opportunity of listening to a presentation by Dr. Moira Gilchrist, PhD, vice president of scientific and public communications at Philip Morris International about harm reduction and the part that PMI was playing in it by developing products that were underpinned by robust science and research.

    IQOS products were displayed and there were static presentations explaining, for instance, the timeline of product development from Accord to IQOS, and why it was that health problems stemmed from the inhalation of the products of tobacco combustion. One such presentation was headed, The Smoking Problem.

    In a press note, PM Ltd (UK and Ireland) said that the three new smoke-free IQOS devices were the company’s most advanced to date and had been designed to make it easy for smokers to switch away from cigarettes completely. According to PM Ltd’s MD, Peter Nixon, the new products have been specifically designed to give every one of the UK’s 7.4 million smokers a way to stop “burning tobacco”. “We are confident that our new IQOS range provides the solutions needed to help all UK smokers move away from cigarettes,” he said.

    One of the devices presented at the launch was the IQOS3, which was described as the latest version of the heated tobacco device featuring a longer battery life, faster charging and a more ergonomic design.

    The IQOS MULTI was described as a new, more compact heated tobacco device that had been designed to provide a different experience to PM’s other devices. With IQOS MULTI, consumers could use 10 back-to-back tobacco sticks before needing to charge the device.

    IQOS MESH, for which the UK is its first market, was said to be a premium vaping product that used a replaceable pod containing nicotine liquid. ‘It uses a unique “mesh” rather than the traditional “coil and wick” to offer a more consistent vaping experience,’ PM said. ‘There are seven different flavored pods.’

  • Dynamic change foretold

    Dynamic change foretold

    Gemma Webb, British American Tobacco UK’s GM, said yesterday that the tobacco industry was entering the most dynamic period of change it had ever encountered.

    “We are experiencing an extraordinary, once-in-a-generation coming-together of societal change, public health awareness and, crucially, access to technological innovation in the nicotine category,” she said.

    “This convergence of factors has created a unique opportunity for the industry and our business: the opportunity to make a substantial leap forward in our ambition to provide our consumers with a choice of potentially reduced risk tobacco and nicotine products.”

    Webb was speaking at a BAT launch party for the newest iterations of its Vype electronic cigarettes, Vype iSwitch and iSwitch Maxx.

    The party, which was held against the background of the London skyline as seen from the top of the ‘Gherkin’ building, attracted about 60 people from the vaping and creative industries, along with journalists and influencers.

    During the formal part of the evening, guests were addressed by Webb and Marina Trani, new categories group R&D director.

    Guests were taken through the innovative devices and technologies that BAT had introduced since 2014: innovative devices such as the ePen3 and new e-liquid technologies that brought nicotine salts into the equation.

    The iSwitch devices, meanwhile, include BAT’s Puretech blade, which replaces the coil and wick system. Trani said the Puretech system incorporated an ultra-slim, stainless steel blade that heated the e-liquid to create vapor. The blade, which was about the thickness of a human hair, had a surface area 10 times larger than a traditional coil and wick heating system. It provided a much more precise and measured way to heat the e-liquid, increasing consumer taste satisfaction by ensuring a smoother, richer and more consistent vape, with no off-notes.

    The Maxx version was said to be BAT’s most interactive and connected vapor device. Bluetooth enabled, it connects with the MyVype app through which consumers can tailor their device’s power setting; remotely lock the device to ensure that nobody else can use it; monitor puff count, battery level and device performance to track their usage; and access tips and news.

    Brief mention was made at Tuesday night’s event of the Monday announcement by BAT that it had entered into a new global partnership with McLaren that was ‘rooted in advanced technology and innovation’.

    ‘The multi-year partnership is focused on accelerating its transforming tobacco agenda, at the heart of which is its commitment to providing a portfolio of potentially reduced-risk products (PRRPs), which can deliver a “better tomorrow” for its consumers,’ BAT said in a press note.

    ‘As part of the agreement, BAT will work closely with McLaren Applied Technologies, collaborating and sharing technology expertise; including batteries, advanced materials and design. The two companies will share best practice, processes, innovation, know-how and mutual experience.’

  • New chairman sought

    New chairman sought

    In light of recent press speculation, Imperial Brands said yesterday it was confirming that, in anticipation of the requirements of the new UK Corporate Governance Code regarding a chairman’s tenure on a board, the company had recently started searching for a non-executive chairman to succeed Mark Williamson.

    ‘This is in accordance with its planned and orderly approach to board succession,’ it said in a note posted on its website.

    ‘Mark will remain as chairman until his successor has been found and to ensure an orderly handover of responsibilities.

    ‘A further announcement will be made upon the appointment of his successor.’