We have the commitment, ambition and capabilities to lead
Traditional tobacco continues to be the mainstay of our business, but we also see huge potential in Next Generation Products, which include Vapour Products like e-cigarettes.
Our aim is to offer our consumers – adult smokers – a choice of a range of different products, from traditional cigarettes through to less risky alternatives. These new products offer us another opportunity to further grow our business, while also having the potential to reduce smoking-related disease because they are considered to be less risky than normal cigarettes.
Our ambition is to lead the Next Generation Products category. We are in this for the long haul and very excited about the future. The strength of our commitment can be demonstrated through the actions and progress we are making.
We have invested more than US$1 billion in building a whole new area of the business focused exclusively on Next Generation Products. Within this division, we have specialist business units with experts focused on developing and delivering quality new products, including Vapour Products (e-cigarettes) and Tobacco Heating Products.
From the launch of Vype, our first Vapour Product, in the UK in 2013, we now have a range of products available to consumers across a number of international markets. In December 2016 we opened our first Vype-branded store – in Milan, Italy – at the same time as launching a new type of Vapour Product, Vype Pebble. Our Tobacco Heating Product range includes iFuse – launched in Romania in 2015 – and glo, which we launched in Japan in November 2016, with subsequent launches in Switzerland and Canada.
In July 2017, British American Tobacco p.l.c. (BAT) acquired the remaining 57.8% of Reynolds American Inc. (RAI) that BAT did not already own. We are now a truly global company in the Next Generation Products category, with an opportunity to leverage scale and insights and benefit from the best of the two companies’ talented research and development and Next Generation Product organisations. R.J. Reynolds Vapor Company – an RAI operating company – was formed in 2012 and started selling VUSE digital Vapour Products in Colorado in June 2013 before expanding nationally in 2014. VUSE is now one of the leading brands sold in the US Vapour Products retail market.
We believe we are best placed to lead in Next Generation Products. We understand the needs of adult smokers and have the know-how, capability and experience to develop and deliver a pipeline of high-quality products. We also have world-class R&D capabilities, robust product safety standards, responsible marketing practices and global reach.
Our approach to leading in Next Generation Products is based on:
Given the potential of Next Generation Products, we would like to see growth and innovation encouraged, while ensuring this happens responsibly by putting consumer safety and product quality first. We believe this can be achieved by focusing on five key areas:
High product standards based on robust science are needed to ensure consumer safety and confidence.
The growth of new products should be supported by controlled marketing and advertising rules aimed at adult consumers only.
The public and private sectors need to work together to clearly communicate the benefits of lower risk products so consumers can make informed decisions.
The freedom to innovate should be cultivated to enable the development of a compelling range of products for adult consumers.
Excise and taxes should be set appropriately to enable the affordability of new products to encourage wide take-up.