British American Tobacco P.l.c. · LSE:BATS
British American Tobacco P.l.c — Investor Day (March 2019)
25 slides from British American Tobacco P.l.c's investor day presentation, Mar 14, 2019
Slide 1: Investor Day | 14 March 2019
——EEE BRITISH AMERICAN TOBACCO Investor Day | 14 March 2019 * ae RANSFORMIN ACCELERATING DELIVERY —
Slide 2: A Thriving Business Under Current and Future Regulation in the U.S.
A THRIVING BUSINESS UNDER CURRENT AND FUTURE REGULATION IN THE U.S. JIM FIGLAR | EXECUTIVE VICE PRESIDENT AT RAIS AND RJREYNOLDS
Slide 3: Important Information
Important Information The information contained in this presentation in relation to British American Tobacco p.l.c. (“BAT”) and its subsidiaries has been prepared solely for use at this presentation. The presentation is not directed to, or intended for distribution to or use by, any person or entity
Slide 4: Important Information (continued)
Important Information Forward-looking Statements (continued) Additional information concerning these and other factors can be found in BAT’s filings with the U.S. Securities and Exchange Commission (“SEC”), including the Annual Report on Form 20-F to be filed on 15 March 2019 and Current Reports on
Slide 5: Jim Figlar
JIM FIGLAR EVP R&D AND SCIENTIFIC & REGULATORY AFFAIRS 20Yrs Industry Ph.D. in Chemistry SVP Scientific & Regulatory experience Affairs Litigation & Leads U.S. Research Regulatory Product Scientist Representative Innovation
Slide 6: Key Topics
Key Topics 1 Proposed FDA Standards 2 Managing the Regulatory Process 3 The Rulemaking Process 4 Our Vapour Recommendations to FDA 5 A Menthol Regulations Deeper Dive 6 Conclusions
Slide 7: Proposed FDA Standards
Proposed FDA Standards ——EEE BRITISH AMERICAN TOBACCO ACCELERATING DELIVERY ———ie
Slide 8: Proposed Nicotine Standard
Proposed Nicotine Standard o We believe the Current Proposed Standard is not justified or workable Why? 1. A non-zero, non-addictive threshold has not been scientifically established 2. Laboratory or Pilot scale testing does not equate to commercial viability 3. Compliance measures have not been est
Slide 9: Proposed Menthol Ban
Proposed Menthol Ban o We believe a Proposed Ban on Menthol Cigarettes is not justified or workable Why? 1. Non-menthol cigarettes carry the same health risks as menthol cigarettes 2. Science to date on initiation, cessation, dependence and progression is not compelling 3. Public Health benefits hav
Slide 10: Enforcement Discretion on Retail Vapour Sales
Enforcement Discretion on Retail Vapour Sales o On March 13, FDA released changes to their guidance regarding vapour products What? 1. Bringing forward the PMTA deadline to 2021 on flavors 2. Flavored products other than tobacco, mint and menthol: on sale in age restricted outlets only 3. On-line sa
Slide 11: Managing the Regulatory Process
Managing the Regulatory Process
Slide 12: FDA regulatory process | What is possible
FDA regulatory process | What is possible FDA CAN: FDA CANNOT: Issue Guidance (while it is not strictly binding, X Reduce nicotine in tobacco products FDA uses guidance as its “best thinking” when to zero reviewing applications) Issue Rules through the rule-making process X Ban a category of pro
Slide 13: What are the key roles of tobacco product regulation?
What are the key roles of tobacco product regulation? STRONG PRODUCT REGULATION ACROSS THE WHOLE TOBACCO PRODUCT LANDSCAPE CAN: › Educate & minimize risk to consumers › Compliance demands serious Product & PROTECT › Prevent rogue or unsubstantiated ENSURES Category knowledge CONSUMERS product claims
Slide 14: What regulation based on the risk continuum would look like
What regulation based on the risk continuum would look like REGULATION & Active CONSUMER EDUCATION PROGRAMS to correct misperceptions REGULATORY (nicotine, relative risk differences by category, etc.) BODIES SHOULD SUPPORT THE CLEAR RULE-MAKING with HIGH, but achievable STANDARDS RISK (including imp
Slide 15: FDA Rulemaking Process
FDA Rulemaking Process wha BRITISH AMERICAN TOBACCO ACCELERATING DELIVERY ———ie
Slide 16: FDA Announcements and Rulemaking Process
FDA Announcements and Rulemaking Process REMINDER CURRENT STATUS: FDA RUNS THROUGH A MULTI-YEAR, SCIENCE-BASED, ITERATIVE, PUBLIC, SET OF PROCESSES: › July 2017: FDA announced plans to › 9 step process explore a reduction in nicotine levels Step Step Step Step Step Step Step Step Step One Two Three
Slide 17: Our topline views on FDA Rulemaking
Our topline views on FDA Rulemaking PROS: CONS: FDA seems committed to regulating ~ FDA is not immune to public pressure through the rule making process ~ Companies have to bridge the “trust” gap FDA may be signaling a shift from regulating via “guidance” which is neither stable, predictable or
Slide 18: Recommendations on Vapour
Recommendations on Vapour wha BRITISH AMERICAN TOBACCO ACCELERATING DELIVERY i.
Slide 19: We support clear, science-based regulation for Vapour
We support clear, science-based regulation for Vapour OUR VAPOUR MARKET COMMITMENTS AND RECOMMENDATIONS TO FDA… RECOMMENDATIONS TO MONITOR & REGULATE THE TO ADDRESS YOUTH APPEAL: MARKET (SHARED WITH FDA): › Retailer Education & Support › 8th August 2022 date for PMTA submissions › E-Commerce Age-Ver
Slide 20: Menthol Regulations Deeper Dive
Menthol Regulations Deeper Dive
Slide 21: Menthol | Headlines vs bottom lines
Menthol | Headlines vs bottom lines Headlines: On November 15, 2018 FDA Commissioner Scott Gottlieb during a media event focused on the “Teen Epidemic” regarding the rise in use of Vapour products by youth made an additional and unexpected announcement around the possibility of banning menthol in ci
Slide 22: Menthol | Areas of agreement with FDA
Menthol | Areas of agreement with FDA FDA’S 2013 MENTHOL EVALUATION: SMOKE CHEMISTRY “…the weight of evidence supports the conclusion that, from a nonclinical toxicity & TOXICOLOGY standpoint, menthol in cigarettes is not associated* with increased or decreased smoke toxicity.” “…the weight of the e
Slide 23: Menthol | Areas of challenge to FDA
Menthol | Areas of challenge to FDA FDA’S 2013 MENTHOL EVALUATION: “the weight of evidence supports the conclusion that menthol in cigarettes is likely associated* with… increased initiation and ! progression to regular cigarette smoking, increased dependence, and reduced success in smoking cessatio
Slide 24: Menthol | BAT addressed FDA's areas of concern
Menthol | BAT addressed FDA’s areas of concern with the latest scientific information on: SMOKING PROGRESSION DEPENDENCE SMOKING CESSATION SMOKING INITIATION *Comments available at https://www.regulations.gov/document?D=FDA-2017-N-6565-18265. Our summaries focused on nationally representative adjust
Slide 25: Conclusion
Conclusion The FDA regulatory approach has to be science-driven and evidence based › BAT has the people, experience and successful track record to thrive under such a landscape › No formal FDA rules on Combustibles Product Standards have passed the office of Management & Budget - Any action will req