Key Points
- U.S. unauthorized vape market: $9.4bn;
- FDA enforcement policy shifted;
- Flavored Vuse planned for Q3;
- New Velo expected in Aug-Sept;
- BAT keeps full-year guidance unchanged.
2Firsts
June 15, 2026
According to Reuters, British American Tobacco (BAT) said on June 2 that it had raised its revenue-growth forecast for new category products such as vapes and nicotine pouches following a shift in U.S. e-cigarette regulation, while keeping its group-wide full-year guidance unchanged.
BAT said it now expects first-half and full-year revenue growth from new category products to reach the mid-teens, up from its previous forecast of low double-digit growth.
However, the company still expects full-year revenue growth to come in at the lower end of its 3%-5% target range, while adjusted operating profit growth is also expected at the lower end of its 4%-6% medium-term guidance range.
BAT shares fell 4% following the update.
Reuters said some investors had expected the company to upgrade group guidance after a significant U.S. regulatory shift affecting vaping products.
The U.S. is one of BAT’s largest markets, but sales of new nicotine products such as Vuse vapes and Velo nicotine pouches have been constrained by premarket authorization requirements.
Tobacco companies have long argued that the FDA’s lengthy review process has delayed the launch of legal products while fueling widespread sales of unauthorized vapes.
Last month, the FDA said it would use “enforcement discretion” and not act against certain unlicensed products sold by manufacturers whose applications meet specific standards.
“The size of the prize is very high,” BAT CEO Tadeu Marroco told analysts.
He added that BAT estimates unauthorized vape sales in the U.S. are worth about £7 billion, or US$9.43 billion.
Marroco said BAT is preparing new products to compete more effectively in the U.S. market.
Flavored versions of Vuse are planned for launch in the third quarter.
An updated Velo pouch is expected to launch in August or September.
Reuters noted that BAT’s new category business remains smaller than its traditional tobacco operations but is growing faster and playing an increasingly important role in improving the company’s revenue trajectory.
However, BAT continues to face pressure in its traditional tobacco business.
The company said it lost cigarette market share across its seven top tobacco markets, including the U.S.
The U.S. market has also seen consumers shift toward lower-priced products.
BAT expects global tobacco industry volumes to decline 2.5% this year, a steeper drop than previously expected.
Barclays analyst Pallav Mittal said some investors had expected BAT to raise guidance, at least for revenue.
He said the company’s decision to keep group guidance unchanged may reflect caution over uncertainty linked to conflict in the Middle East.
Marroco said there had been no significant impact on BAT’s business so far.
However, he said he was concerned that the conflict and its impact on prices for essentials such as fuel could affect consumer spending on the company’s products.
Industry observers said BAT’s comments show that the FDA’s enforcement shift is changing expectations among major tobacco companies.
For BAT, the estimated US$9.43 billion unauthorized vape market represents both competitive pressure and a potential growth opportunity as it prepares flavored Vuse and updated Velo launches in the U.S.
Cover image:BAT
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