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

Japan Survey Finds 49.5% Would Cut Tobacco Use if Prices Rise, 64.6% Show Interest in Nicotine-Free Alternatives
Japan Survey Finds 49.5% Would Cut Tobacco Use if Prices Rise, 64.6% Show Interest in Nicotine-Free Alternatives
A September online survey commissioned by Japanese smoking-accessories company Lightec found that 49.5% of respondents would consider reducing tobacco use if prices rose further, while 25.1% would consider switching to cheaper brands and 14.5% would consider using or combining alternatives such as vapes and nicotine-free herbal sticks. Another 64.6% expressed some level of interest in such alternatives. The survey covered 1,088 respondents aged 20 to 70 and was conducted by a company that sells NICOLESS nicotine-free vaping and herbal-stick products, meaning its findings should not be treated as representative of Japan's smoking population.
DATA
Oct.12
How Investors Are Repricing the Global Tobacco Industry as Nicotine Markets Shift
How Investors Are Repricing the Global Tobacco Industry as Nicotine Markets Shift
How are investors reassessing the global tobacco industry as nicotine markets evolve? In an interview with 2Firsts, Charlie Chen, Head of Research at CCB International Securities, forecasts annual growth of 30–50% for nicotine pouches, outpacing vaping and heated tobacco. He examines how regulatory enforcement, shifting market shares and new business models are influencing company valuations. The report also explores differences between multinational tobacco groups and Chinese companies, drawing on insights from the New Approaches Summit on profitability, investment strategies and industry consolidation.
Nov.11
Latest UK ONS Data: Vaping Rate Edges Down to 9.9% in 2025, a Year After Overtaking Cigarette Smoking
Latest UK ONS Data: Vaping Rate Edges Down to 9.9% in 2025, a Year After Overtaking Cigarette Smoking
Vaping prevalence in Great Britain edged down to 9.9% in 2025 from 10.0% in 2024, with the number of adult users holding at approximately 5.4 million for a second consecutive year, according to the Office for National Statistics (ONS). E-cigarette use had risen from 6.4% in 2020 to 10.0% in 2024, when it exceeded cigarette smoking prevalence for the first time. Cigarette smoking continued to decline to 8.7% in 2025, widening the gap to 1.2 percentage points. Daily vaping declined slightly, while usage among adults aged 25–34 increased despite falling rates in other age groups.
DATA
Oct.14
UK HMRC Launches Vape Duty Stamps on October 1, Ushering in Supply-Chain Traceability as Chinese Exporters Face New Compliance Hurdles
UK HMRC Launches Vape Duty Stamps on October 1, Ushering in Supply-Chain Traceability as Chinese Exporters Face New Compliance Hurdles
HM Revenue & Customs put the UK's Vaping Products Duty and Vaping Duty Stamps Scheme into effect on October 1. All vaping liquids manufactured in or imported into the UK are now subject to duty at £2.20 per 10ml, regardless of nicotine content. The stamp regime will introduce digital functionality designed to provide traceability throughout the supply chain, with approved manufacturers, importers and warehousekeepers required to report product movements and retailers and consumers eventually able to scan stamps to verify authenticity. China exported $177 million of vape-related products to the UK in August, up 51.4% year over year, increasing the significance of the new compliance regime for China's Shenzhen-centered vape supply chain.
Regulations
Oct.04
2Firsts On-Site | PMI Brings IQOS, ZYN, VEEV and Marlboro Together at Its “Boulevard” at InterTabac 2026
2Firsts On-Site | PMI Brings IQOS, ZYN, VEEV and Marlboro Together at Its “Boulevard” at InterTabac 2026
At InterTabac 2026 in Dortmund, PMI is presenting multiple brands and products along “The PMI Boulevard,” including IQOS, ZYN, VEEV and Marlboro. On-site images captured by 2Firsts show dedicated spaces including the IQOS Boutique, ZYN Café, PMI Gallery and Marlboro Office
Market
Sep.16 by 2Firsts Perspectives
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