Tobacco companies expect £1.4bn to go up in smoke as Rishi announces his plan to raise the smoking age
Nearly £1.4 billion was wiped off the British tobacco company’s assets yesterday after Rishi Sunak announced the smoking age could be raised every year so that eventually no one would be able to buy cigarettes.
Under plans announced by the Prime Minister at the Conservative Party conference, a child born on or after January 1, 2009 will never be legally sold a cigarette in England.
The announcement was a major blow to London-listed cigarette companies British American Tobacco (BAT) and Imperial Brands.
BAT, owner of Dunhill and Lucky Strike, fell 1.7 percent, losing up to £974 million on the FTSE 100 firm as its shares hit their lowest level in three years.
Imperial Brands, which owns Winston and Rizla, fell 2.7 percent – a loss in value of £404 million.
Ban: Under plans announced by the Prime Minister at the Conservative Party conference, a child born on or after January 1, 2009 will never be legally allowed to be sold a cigarette in England
The Prime Minister said he believes the measure is the right step to tackle the leading cause of preventable disease.
According to the Office for National Statistics, one in nine 18- to 24-year-olds in the UK smoke.
A similar measure was introduced in New Zealand, where the purchase of tobacco products remains banned for people born after 2008.
Deborah Arnott, chief executive of campaign group Action on Smoking and Health, called the plans an “unprecedented set of measures to protect the next generation”.
But BAT said the proposals would be difficult to enforce and risked creating a category of “underage adults”.
“There are already insufficient resources to enforce existing tobacco control policies. “An additional ban will only make police work more difficult,” it said.
Imperial said the plans could have “significant unintended consequences,” but did not elaborate.
Tobacco giants have tried to switch from cigarettes to tobacco-free alternatives like e-cigarettes and nicotine pouches – and have invested millions in the products to do so.
According to BAT, nicotine pouches, tobacco heating products and e-cigarettes accounted for 16.6 percent of sales and 40 million people use them annually.
A 2018 review by Public Health England found that vaping is at least 95 percent less harmful than smoking.
However, in a further blow to tobacco investors, Sunak would consider restricting the sale of disposable vaporizers and looking at their flavors and packaging.
The figures showed that one in six people aged 16 to 24 use e-cigarettes at least occasionally, up from one in nine in 2021.