British American Tobacco South Africa - Global market

Combustibles

While combustible cigarettes remain the largest global tobacco category, their volumes have seen a gradual fall over many years driven by increased regulation and changing societal attitudes. For decades, we built our business on meeting the preferences of adult smokers with leading cigarette brands, superior products and market-leading innovations.

However, we recognise the world is changing.

We are building A Better Tomorrow™ for consumers by responsibly offering enjoyable and stimulating choices for every mood and every moment, today and tomorrow.

Our consumers are at the core of everything we do and our success is underpinned by addressing their preferences, offering them a choice of enjoyable, innovative and less risky products* through:

• a wide choice of high quality and stimulating products for every mood and moment;
• brands they can trust that are manufactured to high quality and safety standards;
• reduced-risk alternatives to combustible products;*
• transparent, clear and accurate information, based on robust science, about the relative risks; and
• responsible marketing that doesn’t engage or appeal to youth

Cigarettes are a reliable source of tax revenue for governments worldwide, and price differentials between markets, regulatory changes and broader macroeconomic pressures have driven the establishment of a significant and growing illicit cigarette trade, now estimated to account for 11.2% of the global tobacco market. It is generally accepted that there is a direct correlation between steep and ad hoc increases in taxes and an increase in illicit sales, with the current sanctions in many countries doing little to deter criminals for whom profits from the illegal sale of tobacco remain an appealing prospect.

Reduced Risk Products*

Our growing range of reduced-risk* products includes our vapour and modern oral products.

It is widely acknowledged that most of the harm associated with conventional cigarettes is caused by the toxicants in the smoke produced by the burning of tobacco.

That is why we are dedicated to the development and commercialisation of alternative tobacco and nicotine products that don’t burn tobacco to deliver nicotine to the user and offer smokers an enjoyable, reduced risk alternative.

Our portfolio of non-combustible, reduced-risk products (RRPs) currently comprises two categories of products*:

Vapour products

Vapour products are battery-powered devices that heat liquid formulations – e-liquids – to create a vapour which is inhaled. Most e-liquids contain water, propylene glycol and glycerol, flavourings and nicotine, although some e-liquids don’t contain any nicotine. The products contain no tobacco and no combustion takes place.

Under our flagship global Vuse brand, our vapour products play a major role in providing smokers with a reduced risk* alternative to cigarettes. We will continue to invest and innovate to deliver even greater choice and satisfaction for our consumers

Revenue from our vapour products globally was up 52% in 2021, with our global brand, Vuse, now the leading global vapour brand by value share.

Modern oral products

Modern oral products, including tobacco-free nicotine pouches.

Under our Velo brand, our modern oral pouches contain high purity nicotine, water and other high-quality ingredients. Modern oral products represent an exciting opportunity to offer a device-free alternative to adult smokers.