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British American Tobacco sells cigarettes, vaping products, and nicotine pouches to smokers and nicotine users around the world.
British American Tobacco is one of the world's largest tobacco companies, selling cigarettes and other nicotine products to hundreds of millions of adult consumers. Its famous cigarette brands include Dunhill, Kent, Lucky Strike, and Newport, and it also owns big cigarette businesses in markets like Brazil and South Africa. People who smoke buy a pack, the company makes a profit on each pack, and that steady global demand has funded decades of dividends.
The business is being squeezed from two sides. Smoking is slowly declining in rich countries as health rules tighten and fewer people take it up, while regulators keep pushing plain packaging, higher taxes, and marketing bans. At the same time, BAT is spending heavily to build "reduced-risk" products — vaping brands like Vuse, heated tobacco like glo, and oral nicotine pouches like Velo and Grizzly — so it can sell to people who want nicotine without smoke. It also owns a big chunk of the cannabis company Organigram. The bet is that these newer products replace the shrinking cigarette money before it disappears. The economics are striking. Cigarettes cost very little to make but sell for a lot after tax, which is why tobacco companies gush cash. A huge share of the retail price in many countries goes to governments as excise tax, so BAT is partly a tax collector and partly a brand owner. The brand is what lets it charge more than generics, and owning many brands across many countries spreads the risk when any single market turns against smoking.
Recently the big story has been write-downs. BAT took a multi-billion-pound impairment on its U.S. cigarette brands in 2023 as smokers quit faster than expected and cheap disposable vapes took share. It has also faced competition from Philip Morris International in heated tobacco and from a flood of illegal and unregulated vapes. Management is cutting costs, pushing the "new categories" segment toward profitability, and using free cash flow to pay a large dividend and buy back shares — a classic move for a mature cash machine trying to stay relevant while its core product fades.
Saved answer · last researched 29 Oct 2026