Tobacco chief denies unfair Western focus for vape strategy
Top dog at cigarette giant British American Tobacco (BAT) has pushed back against claims that the company’s focus for smoking alternatives has unfairly focused on the West, calling this narrative “superficial”.
Speaking to City PM, chief marketing officer Kingsley Wheaton said that whilst it was “certainly true” that the northern hemisphere have a “more advanced approach” to ‘new category’ products like vapes and heated tobacco, he said this was simply driven by consumer demands and cigarette pricing.
Crucially, he said the BAT portfolio, which includes Vuse and Glo, is deployed to “effect the most growth,” acknowledging that BAT is still part of a “controversial industry” that has a long way to go to effect change.
The 120-year-old company has been on an ongoing transformation programme, shifting customers away from its cigarette brands like Camel and Rothmans and towards its alternative products.
Wheaton said it has slowly but surely growing the new product range in markets like South Africa, Kenya and Pakistan, and was “trying to find the right opportunities in developing markets”.
BAT does not disclose revenue by specific market.
“We need to deliver scaled businesses and the right margins. Other parts of the developing world are catching up with that opportunity,” Wheaton told City PM, explaining that some regions, like Australia and Brazil, are simply out of reach because of their strict rules surrounding tobacco alternatives.
“Making the commercial journey away from tobacco is easier when cigarette prices are higher,” Wheaton explained, citing the success seen in the UK as an example of this, where around 80 per cent of the price of a packet of cigarettes is now made up of tax.
Action on Smoking and Health (ASH) data revealed that there are now five times as many vapers in the UK than there were in 2012, making up about eight per cent of the population.
Wheaton said that whilst the FTSE 100 firm’s push into vapes and heated tobacco was still loss making, he said the company stands by its ambition for new categories to make up a fifth of BAT revenue and profitability by 2025: a perhaps humble goal for a company which serves 175 countries worldwide and whose revenue hit over £25bn in 2021.