British American Tobacco (BAT) has opened a £30m ‘innovation centre’ in the UK as it looks to ramp up development and production of its vaping and smokeless products.
BAT’s new facility, based in its global research and development headquarters Southampton, will support its ambitions to become a predominately smokeless business, with 50 per cent of revenue generated from non-combustibles by 2035.
Researchers at the Southampton site, which currently has over 1,000 employees, are working on developing ‘new categories’ of products. These include oral nicotine pouches, liquids and flavours for vapour products, heated tobacco products and “wellbeing and stimulation beyond nicotine”.
Dr James Murphy, director of research and science at BAT, said: “The opening of this new facility marks an important milestone in BAT’s transformation and will play a key role in making a smokeless future a reality.
“Evidence provided by objective world-class science is essential to facilitate the migration of adult smokers to smokeless products and support public health objectives.
“The investment in our Innovation Centre will support the cutting-edge research and product development efforts of our global R&D team for many years to come,” he added.
It comes amid the government’s drive to create a smoke-free generation. Last month, the government confirmed plans to ban disposable vapes and bring in a new law in a bid to stop children aged 15 and under from ever legally buying tobacco.
Image: BAT
Last week, chancellor Jeremy Hunt confirmed the UK government will introduce a tax on vaping and e-cigarettes during his Spring Budget 2024 announcement.
The vaping levy, expected to be placed on the liquid in vapes based on the amount of nicotine they contain, is part of an effort to raise the funds necessary for his two pence cut to National Insurance.
BAT’s £30m investment in the Southampton facility follows the opening of its Innovation Centres in Italy in 2021 and in China in 2022. The tobacco giant is investing £300m a year in R&D to develop new category products and establish substantiation of their reduced risk potential.
In its most recent full year earnings, BAT posted revenues of £3.35bn from its new categories division – up 15.6 per cent from the year before – as it turned profitable two years ahead of target.
Shares in the FTSE 100 firm have fallen over 24 per cent in the past year. They were down around 0.2 per cent on Monday morning.