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Big tobacco firms Imperial and BAT fall on vape tax plan

Published 27/02/2024, 12:57
Updated 27/02/2024, 12:57
© Reuters.  Big tobacco firms Imperial and BAT fall on vape tax plan

Proactive Investors - Shares in tobacco giants British American Tobacco PLC (LON:BATS) and Imperial Brands PLC (LON:IMB) fell on news that vaping and cigarettes could be hit with new taxes in the UK.

Prime minister Rishi Sunak and chancellor Jeremy Hunt are mulling introducing a new tax on vapes at next Wednesday's Budget, according to media reports.

Currently vaping products are subject to VAT but not the same levy as is applied to cigarettes.

Tobacco duty could also increase at the Budget, to ensure that vaping remains cheaper, reported the Times, which first broke the story.

Last month, plans were announced for UK-wide restrictions on disposable vapes, to tackle the rise in youth vaping.

Imperial Brands, which owns the Blu vape brand and tobacco brands including Golden Virginia and Richmond, shares fell 4.3% while BAT, which owns Vuse vaping brand and Rothmans and Lucky Strikes, was down only 0.6%.

"Although the industry is jostling for position in the vaping market, given the volumes declines in tobacco, these products are still a relatively small part of the picture," said market analyst Susannah Streeter at HL.

"Investors had also been expecting greater regulation in the sector, so a potential increase in tax isn’t a wild surprise and given they are global companies a change in UK fiscal policy won't move the dial too much."

Read more on Proactive Investors UK

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