A PURPOSEFUL CHANGE

BAT’S NEW CATEGORY R&D INVESTMENT IS DRIVING ITS PURPOSE TO REDUCE THE HEALTH IMPACT OF ITS BUSINESS

AS A GLOBAL COMPANY, WE ARE COMMITTED TO GROWING OUR CONTRIBUTION TOWARDS THE ECONOMIC AND TALENT DEVELOPMENT WITHIN THE REGION. ALONGSIDE OUR OFFICE IN THE UAE, WHICH SUPPORTS OUR MIDDLE EAST, SOUTH ASIA AND NORTH AFRICA OPERATIONS, WE HAVE ESTABLISHED TWO NEW ENTITIES IN SAUDI ARABIA TO FORM THE HUB OF OUR MIDDLE EAST OPERATIONS”

With over 60 years in the Middle East, British American Tobacco (BAT) has witnessed the vibrancy and dynamism of this region that has helped it to become the thriving hub of economic activity that it is today. BAT has similarly gone through a transformative period. Like every great transformation, success depends on having a solid foundation, and BAT’s foundation is clear in our corporate purpose to build a better tomorrow.

As we strive to fulfil our purpose, we have committed to reducing the health impact of our business by providing adult consumers with a wide range of alternative, less risky products*†. Underpinning our purpose is the concept of Tobacco Harm Reduction, which aims to reduce the harm associated with smoking, and encourage those who would otherwise continue to smoke to switch completely to scientifically substantiated, reduced-risk alternatives*†.

While our business has historically centred on combustible cigarettes, we understand that the world is changing and, with it, consumer preferences and the expectations of society and our stakeholders. In line with our vision, we have set ambitious targets for ourselves. Today, we have around 150 million consumers all over the world – our ambition is to have 50 million of our consumers using our non-combustible products by 2030. To make this happen, significant investment in R&D is taking place, as we have invested an additional GBP426m on our reduced-risk portfolio*† of vapour, tobacco heating and modern oral products in 2020.

For Tobacco Harm Reduction to be effective, facts must lead the conversation. At BAT, we are committed to making adult consumers aware of the science around the reduced-risk potential of these products so that they can reach informed decisions. At the same time, we are also clear that combustible cigarettes pose serious health risks and the only way to avoid these risks is not to start smoking or to quit.

The concept of Tobacco Harm Reduction has been endorsed by many public health leaders around the globe. In the Middle East, awareness of the growing body of evidence that demonstrates its effectiveness has led to various regulatory reforms. This is positive as regulatory settings and excise structures need to be proportionate to the risk associated with these alternate nicotine-delivery products. The enforcement of such regulations is equally important to ensure product safety and quality. We look forward to continuing to work with policymakers in the region to explore the potential of Tobacco Harm Reduction.

As a global company, we are committed to growing our contribution towards the economic and talent development within the region. Alongside our office in the UAE, which supports our Middle East, South Asia and North Africa operations, we have established two new entities in Saudi Arabia to form the hub of our Middle East operations – BAT Saudia and BAT Arabia. We have also launched our global vapour brand, Vuse, in the UAE, Saudi Arabia, Bahrain and Kuwait. Its successful launch has given us confidence that many adult nicotine consumers in the Middle East are seeking less risky alternatives*†.

We remain optimistic about the growing awareness of Tobacco Harm Reduction as a public health policy. By working with governments and public health stakeholders, we believe that a better tomorrow in the Middle East is on the horizon – for 2022 and beyond.

* Based on the weight of evidence and assuming a complete switch from cigarette smoking. These products are not risk free and are addictive.

† Our products as sold in the US, including Vuse, Velo, Grizzly, Kodiak, and Camel Snus, are subject to Food and Drug Administration (FDA) regulation and no reduced-risk claims will be made as to these products without FDA clearance.