British American Tobacco, the world’s number two tobacco company by revenue, says a slowdown in the US vaping market would result in slower growth in revenue from its “new categories” business.
The safety of vaping has been in the spotlight, with US health officials reporting more than 2,000 cases of vaping-related lung illness and 47 deaths linked to its use in the country, leading to tighter regulatory scrutiny and individual state bans.
This has led to a drop in demand for the devices, pushing the company to forecast revenue growth in its new categories business that sells e-cigarettes, tobacco heating products and oral products – to be at the low end of its 30-50% target. It had previously anticipated revenue growth in the middle of that range.
But chief executive Jack Bowles said his company can capitalise on stronger rules on vaping.
“Increased investment and new product launches are delivering good new category revenue growth in H2, despite the recent slowdown in the US vapour market,” he said. “We believe that the issues around vaping in the US should lead to a better and stronger regulatory environment in which we are well-placed to succeed”.
Source – BBC