Britain’s biggest cigarette firm ‘commits to smokeless world’ as it shifts to vapes
BRITAIN’S biggest cigarette firm has declared that it wants to become “smokeless” as it shifts to vapes.
British American Tobacco, which makes Dunhill and Lucky Strike, said the rapid rise of vaping meant it would be writing £25billion off the expected value of its cigarette business in the next 30 years.
Boss Tadeu Marroco said it was “committing to a smokeless world”.
BAT makes the Vuse vape and Velo nicotine pouch brands and said it plans to make 50 per cent of its revenues from “non-combustibles” by 2035.
The division makes £3billion in sales compared with £25billion from cigarettes.
BAT said strong sales this year would mean that its vape arm would break even on profits two years ahead of schedule, and be profitable next year.
The company already has a 46 per cent share of the US vape market.
Mr Marroco said: “With only 10 per cent of the world’s one billion smokers using [vapes or pouches] the lopportunity for growth is vast”.
Snus — nicotine pouches placed under the top lip rather than being inhaled — have become a popular alternative to smoking.
In September the Professional Footballers’ Association launched an investigation into the use of snus by players.
Last month, in a surprise move, BAT called for tougher laws to stop the rise in young vapers and brands that target kids with sweet flavours.
Rae Maile, an analyst at Panmure Gordon, said BAT’s view that cigarette brands in the US “might only have a 30-year useful life is headline grabbing, but 30 years is a long time to be generating a considerable sum of cash”.
He said BAT’s strategy would throw smokers “under the bus”.
The Government is proposing laws to stop kids turning 14 or younger this year from ever being able to smoke.
SFO RAID ON FALSE JET PARTS
THE Serious Fraud Office has raided the London-based firm at the centre of a global scandal over fake plane parts.
Last week Ryanair said it had found bogus engine parts in two of its planes, adding to US carriers Delta, American and Southwest airlines.
The fraud director said that it had made a dawn raid on AOG Technics’ offices on the outskirts of London and arrested an individual.
The only director listed at AOG is Jose Alejandro Zamora Yrala.
SFO director Nick Ephgrave said: “This investigation deals with very serious allegations of fraud involving the supply of aircraft parts, the consequences of which are potentially far-reaching.”
AOG has been selling engine parts for the most popular commercial plane models since 2015 and is alleged to have sold dodgy parts with faked certificates.
SHARES
BARCLAYS up 0.96 to 140.42
BP down 4.55 to 467.35
CENTRICA up 1.20 to 150.50
HSBC up 12.40 to 615.80
LLOYDS up 0.85 to 45.86
MARKS & SPENCER up 6.10 to 258.00
NATWEST up 4.60 to 219.40
ROYAL MAIL down 0.70 to 246.10
SAINSBURY’S up 0.80 to 290.00
SHELL down 36.00 to 2490.00
TESCO up 2.60 to 286.70
KFC SHOP BUY-BACK
KFC is buying back 200 outlets currently run under franchise from EG Group — the petrol empire controlled by the owners of Asda.
The billionaire Issa brothers have been offloading parts of their business to cut EG Group’s debt, including selling their garages to Asda.
KFC has 1,040 chicken shops across the UK — but runs only 50 of them.
It makes almost a whopping £2billion in sales.
HERR WE GO, TUI
HOLS firm TUI is considering packing its bags for Frankfurt and delisting from the London Stock Exchange.
The loss of another big company will be a blow to the capital’s shares market which has already seen firms abandon it for New York — including building materials provider CRH and plumbing group Ferguson.
Tui said investors had asked if its London listing was “optimal and advantageous”.
It would now put to its shareholders the proposal to shift to Germany’s exchange.
THE use of cash rose for the first time in a decade as people chose notes to budget in the cost of living crisis.
Cash was used in 19 per cent of payments last year compared to 15 per cent in 2021, says the British Retail Consortium.
CITY RULES ‘FLOP’
THE Government’s 30-point plan to shake-up City regulation has been branded a “damp squib” by MPs.
Last year Chancellor Jeremy Hunt set out his plan to reform financial services and review rules brought in after the 2008 credit crunch.
The Government recently told the Treasury select committee that it had completed 21 of the 31 reforms.
But chair Harriet Baldwin said the reforms were “given fanfare last December” but the lack of progress now felt “like a damp squib”.
U.S. STRIKES A BOWL DEAL
TEN Entertainment has been bowled over by a £278million takeover by US buyout firm Trive Capital in the latest foreign grab of a British business.
Shares in the bowling lane operator leapt by a third today after a deal was struck at 412.5p a share — 33 per cent above its £212million market value a day earlier.
Ten said it accepted the bid due to short and medium-term risks, citing “volatile” political and economic outlooks.
Ten floated in 2017 at 165p. Its shares hit 313p before plunging in Covid lockdowns. Sales have since rebounded.
BUILDING OF HOMES ON SLIDE
THE housebuilding market is suffering from the sharpest slowdown since the aftermath of the global financial crisis in 2007-2008.
And the slump in homes construction has dragged down the entire building sector, according to a closely-watched survey.
The report, by the Purchasing Managers’ Index, found that construction output fell to 45.5 in November.
Meanwhile, housebuilding dropped to 39.2.
Experts say anything below 50 is an indication that activity is shrinking.
Residential building has decreased in each of the past 12 months, say experts.
And the the latest reduction is among the fastest seen since 2009.