Dilemma of BAT: Slayed Camel is the Last Straw to Crush Investors

BAT by 2FIRSTS.ai
Dec.11.2023
Dilemma of BAT: Slayed Camel is the Last Straw to Crush Investors
English tobacco company faces difficult choices as traditional business struggles and new sustainable ventures emerge.

In industries such as tobacco that are facing long-term decline, companies are confronted with critical strategic choices. They can extract maximum value from traditional assets, divest their equity, or they can seek to build new sustainable businesses.

 

Attempting to do both of these things brings about execution risks. The British American Tobacco company is facing a dilemma.

 

Its traditional business - which accounts for more than 85% of its total sales and generates all of its profits - is facing difficulties. BAT prefers to describe it as its burning business rather than tobacco. On Wednesday (December 6th), it disclosed market data which showed that the $2.5 billion write-down of assets in its US division and lower growth expectations have "incinerated" nearly one-tenth of the company's value.

 

Especially in the United States, the surge in living costs and the emergence of disposable e-cigarettes have led to an 11% decline in cigarette sales in 2022. Tobacco companies like British American Tobacco have introduced luxury brands such as Camel to the consumer market, but they have not performed well.

 

The company's sales are expected to only meet the lower end of the 3-5% growth range this year. However, increasing prices has become challenging as sales have significantly declined. British American Tobacco currently projects below-average growth trends until 2026, which is also a factor reflected in its stock price.

 

In the rather murky world of accounting, this signifies that the conglomerate no longer considers its American brand to have perpetual value. By shortening its economic lifespan to 30 years, British American Tobacco has reduced the evaluation of its American brand from £67 billion to £25 billion, which was assessed when it acquired Reynolds American in 2017.

 

In a significant move, the BAT (Baidu, Alibaba, Tencent) invested $49.4 billion to acquire an additional 57.8% stake, thereby surpassing a total enterprise value of $100 billion, including debt. Although this write-down does not impact cash flow, it still represents half of British American Tobacco's current market capitalization.

 

E-cigarettes, heated tobacco products, and modern oral nicotine pouches are expected to break even this year, earlier than anticipated.

 

In reality, these smaller-scale businesses require a significant investment in marketing expenses, which has weakened their profit margins. The government's skepticism towards smokeless products also does not help improve the situation. Nevertheless, the British American Tobacco company still hopes for the popularity of smokeless products before the tobacco market phases out.

 

Given the poor shareholder return this year, even with a 10% yield, only a decrease in global interest rates can attract investors back to British American Tobacco.

 

We welcome news tips, article submissions, interview requests, or comments on this piece.

Please contact us at info@2firsts.com, or reach out to Alan Zhao, CEO of 2Firsts, on LinkedIn


Notice

1.  This article is intended solely for professional research purposes related to industry, technology, and policy. Any references to brands or products are made purely for objective description and do not constitute any form of endorsement, recommendation, or promotion by 2Firsts.

2.  The use of nicotine-containing products — including, but not limited to, cigarettes, e-cigarettes, nicotine pouchand heated tobacco products — carries significant health risks. Users are responsible for complying with all applicable laws and regulations in their respective jurisdictions.

3.  This article is not intended to serve as the basis for any investment decisions or financial advice. 2Firsts assumes no direct or indirect liability for any inaccuracies or errors in the content.

4.  Access to this article is strictly prohibited for individuals below the legal age in their jurisdiction.

 

Copyright

 

This article is either an original work created by 2Firsts or a reproduction from third-party sources with proper attribution. All copyrights and usage rights belong to 2Firsts or the original content provider. Unauthorized reproduction, distribution, or any other form of unauthorized use by any individual or organization is strictly prohibited. Violators will be held legally accountable.

For copyright-related inquiries, please contact: info@2firsts.com

 

AI Assistance Disclaimer

 

This article may have been enhanced using AI tools to improve translation and editorial efficiency. However, due to technical limitations, inaccuracies may occur. Readers are encouraged to refer to the cited sources for the most accurate information.

We welcome any corrections or feedback. Please contact us at: info@2firsts.com

PMI's IQOS Extends ZAMNA Electronic-Music Partnership to Spain as Vogue España Publishes Branded Content
PMI's IQOS Extends ZAMNA Electronic-Music Partnership to Spain as Vogue España Publishes Branded Content
Philip Morris International's IQOS has extended its partnership with electronic-music event brand ZAMNA to Spain, setting up a House of IQOS at ZAMNA Madrid. Vogue España and Time Out Madrid subsequently published branded content clearly labeled as collaborations with IQOS. PMI has also expanded its company-owned IQOS boutique network in Spain to seven cities this year. The company says IQOS's adjusted heated-tobacco market share in Europe reached 12.6% in the first quarter of 2026, with Spain among its stronger-performing European markets.
Sep.20
North Carolina Tightens Vape Product Directory Enforcement, Expands State and Local Powers as Violators Face Fines, Product Seizures and License Suspension or Revocation
North Carolina Tightens Vape Product Directory Enforcement, Expands State and Local Powers as Violators Face Fines, Product Seizures and License Suspension or Revocation
North Carolina has expanded enforcement of its vapor product directory rules, authorizing more state and local law enforcement participation and establishing a task force led by the State Bureau of Investigation. The legislation requires at least one unannounced compliance inspection annually for retailers, distributors and wholesalers handling covered products. Penalties effective October 1, 2026, include civil fines of $500–$750 for a first violation and $1,000–$1,500 for repeated violations within 12 months, along with potential license suspension or revocation. Manufacturers may face penalties of $10,000 per unlisted product. The measures strengthen the product directory system established in 2024.
Regulations
Oct.28
JTI Liggett Puts U.S. Value Cigarette Brands in Spotlight at 2026 NACS Show
JTI Liggett Puts U.S. Value Cigarette Brands in Spotlight at 2026 NACS Show
At the 2026 NACS Show in Las Vegas, JTI Liggett highlighted its value-priced cigarette portfolio, including LD and Montego, following JT Group's acquisition of Vector Group. The company's U.S. business reported market share gains, with LD sales volume rising 32.6% in the first half of 2026. Meanwhile, Ploom was displayed separately at Altria's booth under an existing partnership. JTI Liggett booth staff told 2Firsts that the company had not yet launched nicotine pouch products in the United States.
EXPO
Oct.09
Product | BAT Launches VELO WRKS Nicotine Pouches in Sweden, Introducing Dual-Compartment Cans With Two Flavours
Product | BAT Launches VELO WRKS Nicotine Pouches in Sweden, Introducing Dual-Compartment Cans With Two Flavours
British American Tobacco (BAT)'s VELO brand launched the VELO WRKS nicotine pouch range in Sweden on November 2, 2026. The initial release features three Dual Can variants, each containing two separate flavours in a dual-compartment container. Each can holds 20 slim pouches with 8mg of nicotine per pouch and retails for SEK 52.99. According to VELO, the first release, Drop 1, is limited to 75,000 cans and will remain available until February 2027 or while stocks last. VELO positions WRKS as a platform for testing new product concepts and has introduced an online consumer feedback survey. EU trademark records show BAT applied to register VELO WRKS in March 2026 under Class 34, covering nicotine pouches, e-cigarettes, heated tobacco products and other tobacco-related goods.
product
Nov.03
South Korea's Tobacco Plan Excludes 6-Methyl Nicotine as Customs Tightens Import Controls and Analog Liquid Imports Fall 83%
South Korea's Tobacco Plan Excludes 6-Methyl Nicotine as Customs Tightens Import Controls and Analog Liquid Imports Fall 83%
South Korea's government unveiled its first Tobacco Harm Management Basic Plan for 2027–2031 on October 29, 2026, proposing broader testing of vaping and heated tobacco products while excluding nicotine analogs such as 6-methyl nicotine. Synthetic nicotine came under tobacco regulation on April 24, and a June investigation found 6-methyl nicotine in 12 liquid inhalation products marketed as nicotine-free. Customs data released in September showed that imports of nicotine analog solutions fell 83.3%, from 12 metric tons in January–April to 2 metric tons in May–August. By September 20, imports had reached approximately 15 metric tons for the year, with 99.99% originating from China. Customs authorities have tightened pre-clearance testing and supply-chain documentation requirements, while the MFDS expects to complete its assessment of nicotine analog hazards by the end of 2026.
Regulations
Nov.04
Product | SMOORE's VAPORESSO Introduces VAST Refillable Vape With Three Resistances in One Pod
Product | SMOORE's VAPORESSO Introduces VAST Refillable Vape With Three Resistances in One Pod
SMOORE-owned vaping brand VAPORESSO introduced the VAST refillable open-system vape in October 2026, featuring Tri-Core Mesh technology that integrates three resistance configurations—0.8Ω, 0.6Ω and 0.4Ω—within a single pod. The device supports different operating modes and e-liquid types. The standard version features a 10mL pod, while a TPD-labelled configuration combines a 2mL pod with an 8mL refill container. The device has a 1,600mAh battery and a maximum output of 30W. VAPORESSO claims up to six pod refills and a tested coil lifespan of up to 150,000 puffs. The UK's MHRA published a related device notification on October 12. The official MSRP is $25.90, compared with a $35.90 listing on VAPORESSO's direct store.
product
Oct.30