British American Tobacco (BAT) has told investors that a prospective U.S. restriction on imports of some disposable e-cigarettes could materially shrink the unregulated portion of the market, but cautioned that effects on sales are not imminent.
BAT estimates that products without U.S. authorisation - many of them imported from China - account for about 70% of e-cigarette sales in the United States. The company says these unregulated devices have affected both its vaping and conventional tobacco businesses.
To counter the influx, BAT has pursued legal remedies. The company currently has two active cases at the U.S. International Trade Commission seeking to block imports of devices it regards as unregulated and infringing its patents. An ITC judge ruled in BAT's favour in a patent dispute last year and recommended a general exclusion order that would prevent certain disposable vapes deemed to infringe BAT patents from entering the U.S. market.
BAT stated with its annual results that it expects the ITC to issue a full determination in March, which would be followed by a 60-day presidential review period. The company’s chief executive, Tadeu Marroco, said such an import block could reduce the unregulated share of the U.S. e-cigarette market to below 50% of industry sales - effectively cutting that segment by roughly one-third - though he noted the precise scale was difficult to predict.
Marroco also warned that a long U.S. supply chain for these devices and large inventories held by distributors and retailers would slow any immediate change in availability. "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, underscoring the lag between legal wins and market outcomes. Separately, the firm indicated it believes broader impact on the market is unlikely before 2027.
Beyond trade remedies, BAT signalled it would not be surprised to see regulatory experimentation from the U.S. Food and Drug Administration. Marroco suggested the FDA could launch a programme testing alternative approaches to vape regulation, potentially including pilot schemes for flavoured products, as the agency seeks to accelerate or streamline its review processes after a period of rejecting most applications for new nicotine products.
Contextual note: The company framed its legal actions and expectations about regulatory change as part of an effort to curb a large unregulated segment of the U.S. vaping market. The timing and magnitude of any market shift will depend on the upcoming ITC determination, the presidential review, the reaction of supply chains and inventories, and any FDA initiatives.