Lucky Strike maker BAT warns over illegal disposable vapes in the US

British American Tobacco (BAT) has warned that waning cigarette sales in the US and the rise of illegal disposable vapes could affect its financial performance this year.

The Lucky Strike and Dunhill cigarette maker said that the economic environment was showing signs of recovery but American consumers remain stretched.

This has helped drive a 9% decline in the volume of cigarette sales across the US industry so far this year, BAT said.

The company expects its revenues and adjusted profit from operations over the first half of the year to be about 1% to 5% lower versus 2023.

Its performance is set to improve over the second half of the financial year, resulting in a slight uptick in sales and adjusted profits across 2024, according to the group.

“Our guidance also reflects ongoing macro-economic pressures, particularly in the US market and continued lack of effective enforcement against the growing illicit vapour segment,” BAT’s chief executive Tadeu Marroco said.

BAT said that consumers turning to illegal disposable vapes was hurting sales of its own vape product, Vuse, and urged the Government to crack down on the market.

It also said it was rolling out its own new single-use vape product, Vuse Go 2.0, this month, which it expects to help accelerate sales over the second half of the year.

BAT makes so-called “reduced-risk” products, such as Vuse, its Glo e-cigarette and, Velo oral nicotine pouch.

It forms part of its plan to transition away from traditional cigarettes and towards newer products, which it hopes it will be making half its total revenues from by 2035.

“While there is still more to do, I am confident that our actions are working,” Mr Marroco said, pointing out its continued success in the US cigarette market alongside growing momentum of its alternative smoking products.