Economy

British American Tobacco to launch synthetic nicotine pouches

LONDON (Reuters) – British American Tobacco (NYSE:BTI) (BAT (LON:BATS)) will launch a version of its Velo nicotine pouches using synthetic nicotine in the United States, David Waterfield, president of the company’s U.S. subsidiary Reynolds American (NYSE:RAI), said on Wednesday.

Smoking alternatives like vapes from big tobacco companies, including BAT, usually contain naturally occurring nicotine derived from the tobacco plant, whereas synthetic nicotine is made in a lab from chemicals.

Waterfield said BAT’s new Velo product, Velo Plus, due to launch in 2025 and offering more nicotine strengths, contained synthetic nicotine – one of the first clear examples of synthetic nicotine use by a big tobacco company.

“Nicotine derived from tobacco and synthetic nicotine, from a chemical point of view, they are the same,” Waterfield told investors at a capital markets event.

He added that BAT would look at other opportunities in synthetic nicotine going forward.

Synthetic nicotine began being used more widely in the United States in recent years as a means to avoid a lengthy application process with the U.S. Food and Drug Administration (FDA), which manufacturers were required to undergo in order to market new nicotine products.

It has so far been used mostly by smaller manufacturers of vapes or nicotine pouches, which users insert under the lip to get a buzz.

Initially, the FDA only had authority over naturally occurring nicotine, so manufacturers of synthetic nicotine products did not have to follow the FDA’s application process. The law was changed in April 2022.

Waterfield said that Velo Plus was a product it acquired. An FDA application for the product was submitted by its previous owner before a May 2022 deadline, meaning it can stay on the market while its application is pending, Waterfield said.

The FDA subsequently told Reuters that a pending application is not sufficient for an synthetic nicotine product to be sold in the U.S., and products on the market without FDA authorisation may be subject to enforcement.

BAT estimates that the size of U.S. industry-wide vape revenues will grow from around 9 billion pounds ($11.7 billion) today to up to 14 billion pounds by 2030, Waterfield said. It expects U.S. nicotine pouch industry revenues to grow from 1.7 billion pounds to up to 7 billion pounds over the same period.

BAT sees current U.S. combustible tobacco revenue declines of around 9% as “abnormal”, Waterfield said, adding BAT expects U.S. industry revenue growth to settle at around 1% for the rest of the decade.

($1 = 0.7682 pounds)

This post appeared first on investing.com

You May Also Like

Editor's Pick

Sen. JD Vance (R-Ohio) and Minnesota Gov. Tim Walz (D) will face off Tuesday night at a CBS News vice-presidential debate in New York....

Latest News

A North Korean defector who escaped to the South more than a decade ago was detained after attempting to cross back into North Korea...

Economy

A U.N. human rights group confirmed Hamas’ leader in Lebanon, who was recently killed by Israeli strikes, was their employee.  Fateh Sherif was killed...

Investing

Astron (ASX:ATR) and Energy Fuels (TSX:EFR,NYSEAMERICAN:UUUU) have completed the establishment of a joint venture to advance the Australia-based Donald rare earths and mineral sands...

Disclaimer: balanceandcharge.com, its managers, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

Copyright © 2024 balanceandcharge.com

Exit mobile version