News Update


Tobacco giant anticipates the end of the US cigarette market

Due to the changing outlook for brands like as Newport and Camel, British American Tobacco (BAT) wiped off £25 billion ($31.5 billion) in value.

The action reduced the value of the trademarks by more than a third and brought the company’s stock price down by more than 8%.

BAT cigarette sales have suffered as smoking rates in the United States have declined and customers have turned to vapes and other alternatives.

Demand for its brands has also decreased as shoppers prioritize other purchases or opt for cheaper packs as costs rise.

With vaping goods, BAT has attempted to re-ignite growth. By 2035, it intends to generate half of its revenue from “non-combustible” items.

It stated that it now considers its US cigarette brands to have a meaningful economic life of 30 years rather than an unlimited one.

The write-down is the first time a major tobacco company has acknowledged the industry’s seismic change.

Chief executive Tadeu Marroco stated in a trade update that the move was due to “accounting catching up with reality.”

“It’s very difficult to defend the existence of an infinite value for some of these brands in the US,” he went on to say.

“I’m not saying that combustible cigarettes will disappear in 30 years in the US – I really don’t believe that – but you cannot justify the value of those brands,” he was quoted as adding.

“It’s reflecting the increased interest of US smokers with new categories,” he added. He went on to say, “This is happening elsewhere and not just in the US.”

Following the announcement, shares of US-listed tobacco rivals plummeted, with Altria falling more than 3% and Philip Morris falling more than 2%.


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