US import block on vapes could cut illegal sales by a third, BAT says

By Emma Rumney

LONDON, Feb 12 (Reuters) – A potential U.S. move to block imports of some disposable vapes could cut the booming market for ‌unregulated e-cigarettes by as much as a third, British American Tobacco’s ‌CEO told Reuters on Thursday, though any impact is unlikely before 2027.

Tobacco giants including BAT and ​U.S. Marlboro-maker Altria have spent years fighting a flood of mostly Chinese-made vapes that lack U.S. authorisation for sale but have still come to dominate the world’s largest market for smoking alternatives.

BAT estimates unregulated devices make up about 70% of U.S. e-cigarette ‌sales, hitting both its ⁠vape and traditional tobacco businesses. The company has two active cases at the U.S. International Trade Commission, seeking to block imports ⁠of unregulated devices.

Last year, an ITC judge ruled in BAT’s favour in a patent dispute and recommended a general exclusion order that would block disposable vapes infringing its ​patents. BAT ​said alongside annual results on Thursday that ​it expects a full ITC ‌determination in March, followed by a 60-day presidential review.

CEO Tadeu Marroco told Reuters that such a block could have a meaningful impact on the market, which he defined as a drop to below 50% of industry sales, or by roughly a third. But the scale was hard to predict, he added.

He also warned ‌that a long U.S. supply chain for such ​devices and large inventories would delay any effect. “So ​even if you get the ​support from the ITC … it will not be until early ‌next year that you have a material ​impact on that,” ​he said.

Marroco also said he would not be surprised if the U.S. Food and Drug Administration launched a programme to test a different approach ​to vapes, potentially including flavoured ‌vapes. After years of rejecting most applications for new nicotine products, ​the FDA has looked to speed up or streamline its processes.

(Reporting ​by Emma Rumney. Editing by Mark Potter)