The BAT press release states: “Now that we have built a successful NGP (next generation products) business which is poised for substantial growth, we will be fully integrating NGP to leverage the scale and expertise of the whole group to drive growth in an area that is fast becoming a key part of our mainstream business.”
The move makes sense due to the declining sales of tobacco products in the global market – plus, the legislative framework is more favourable to the new vape products.
Plus, with America’s Food & Drug Administration announcing that it would like to see nicotine levels restricted in traditional tobacco cigarettes, “to non-addictive levels”, with a view to shifting smokers into vaping, the tobacco industry sees investment in its ecig sector as a logical step.
Another challenge BAT faces is making its products acceptable to current smokers, given that the greatest success they have in switching is with third generation mods and atomisers – not to mention the superior quality of juices found in the independent sector.
As part of this structural overhaul, BAT is aiming to double sales of its vape products during the remainder of 2017 and into 2018. Again, analysts believe this is optimistic and that tobacco product users will prefer the heat-not-burn products due to its similarity to smoking.
It needs to be noted that this doesn’t indicate a change to BATs traditional business practises, as highlighted by the fresh UK investigation into a new bribery scandal.