Tobacco: Diverging Regulatory Paths – BAT & PM Best Positioned

研报英文原文证据摘录

Tobacco: Diverging Regulatory Paths – BAT & PM Best Positioned

e-vapour products since 1 June 2025 (link). In France, from 1 April 2026, oral nicotine

products (aside from those to aid smoking-cessation) are banned as a public health

response to youth-targeted marketing (link).

Could thinking on regulation evolve? We view the core aims of regulating new

categories as: controlling access, improving net public health outcomes and

protecting tax revenues. We acknowledge the nicotine industry's vested interest to

lobby for a more permissive regulatory framework, with key arguments being: 1)

new categories are "reduced-harm" when compared to cigarettes, and help shift

people away from harmful combustible products, and 2) the current restrictive

regulatory framework on new category products has created an unintended

platform for illicit products – where technology may evolve more quickly and is

more enticing. Whilst we see merits to the arguments for both sides, we flag factual

observations: 1) nicotine consumption is not declining despite regulation, and is

simply shifting across source/products ( Exhibit 3 ) and in many cases to illicit

products; 2) markets with more permissive regulation on "reduced-harm" coincide

with lower smoking and illicit product rates, as we discuss in a Sweden case study

below; and 3) tobacco regulation has broadly failed in protecting consumers from

increasing penetration of illicit products.

Sweden as a positive case study. Sweden provides the clearest example of how

differentiated regulation can coincide with lower smoking rates and a controlled

illicit market. Daily cigarette smoking has declined since the 1980s, helped by broad

tobacco-prevention measures introduced from the 1960s, including advertising