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Gloucestershire Business News

UP IN SMOKE: tobacco giant's value rises – despite incoming restrictions

London-based multinational, British American Tobacco (BAT), has executed a share buyback today as it moves to increase the value of its business. And as the world's second biggest name in cigarettes and vaping approaches a new UK legal landscape in 2025, the move appears to have been smart, with an uptick in the firm's share price on the London Stock Exchange this morning taking the brand to an annual high.

Analysts expect the smoking and vaping market to change this year given the imminent approach of the Tobacco and Vapes Bill. Currently in report stage before it heads to the House of Lords ahead of royal assent, a ban on single-use vapes will be likely to come into effect on June 1 while from January 1, 2027 the age of sale restrictions for tobacco will come into force, making it illegal to sell tobacco products to anyone born on or after January 1, 2009.

This includes cigarettes, cigars and chewing tobacco. In a move which will further tighten marketing, the new law will also ban the promotion, advertising and branding of vapes and nicotine products to children, while introducing powers to regulate display, packaging and flavors of vapes.

Amid lobbying from the hospitality sector, new restrictions on vaping and smoking in public places are also anticipated, including the extension of smoke-free zones.

Given an indication late last year from Wes Streeting, the Health Minister, what means in practice is that it will be illegal to smoke or vape in playgrounds or outside schools, but any move on outdoor spaces in the pub sector now appears very unlikely.

Mr Streeting said: "The hospitality industry has taken a real battering in recent years", adding that now was "not the right time" to change existing laws outside pubs.

For shopkeepers here in Gloucestershire though, the biggest change will be a new licensing scheme which will see retailer registration rules – as already in place in Scotland – for selling tobacco, vapes, and nicotine products enforced here.

Enforcement as a tool for prevention will also be beefed up, with the possible result that we may eventually see fewer headlines of swoops on illicit sales in the county. 

 In today's move from BAT, 121,370 shares at 25p each were puchased back, with an average price paid at 3,191.2499p.

BAT said: "The Company intends to cancel the purchased shares."

The move sent BAT's value to an all-time annual high on the London Stock Exchange, but against the backdrop of UK changes, the rise in socially responsible investing represents a growing challenge for the tobacco industry. From available data, The Conversation reports that cigarette sales have been in continuous decline globally since 2008.

Across companies with a full series of data (2008 to 2023), sales fell from 2.77TN sticks to 2.14TN, marking a 22.8% decline. In fact, the only maker to see a rise in sales was in Indonesia.

While campaigners point out that about half of those who fail to give up smoking die as a result of their addiction, investment firms such as Tobacco Free Portfolios are meanwhile urging institutions not to invest in or provide financial services to tobacco companies.

Dr Tedros Ghebreyesus, Director-General of the World Health Organisation, backs the growing momentum in this field of finance. He said: "It makes no sense to fight tobacco on one hand and to finance it on the other."

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