BAT narrows smoke-free gap with Philip Morris

British American Tobacco has reduced the market lead held by Philip Morris across several smoke‑free product categories, gaining ground in nicotine pouches and closed‑pod vaping while Philip Morris keeps its lead in heated‑tobacco systems.

Philip Morris acquired nicotine pouch brand Zyn in 2022 and expanded production. Zyn is the largest pouch brand globally and in the U.S. British American Tobacco’s Velo is the number two pouch brand and has increased distribution and sales in recent quarters.

In heated tobacco, Philip Morris’s IQOS platform remains the market leader. Its ILUMA device is available in multiple countries. Only earlier IQOS models have U.S. Food and Drug Administration approval, and product availability varies by market. British American Tobacco’s glo brand ranks behind IQOS in heated‑tobacco share.

In closed‑pod vaping, British American Tobacco’s Vuse has notable market positions in the U.S., the U.K. and France. The company introduced a premium Vuse Ultra device aimed at higher‑end consumers. Use of JUUL and NJOY products has declined amid patent disputes and legal challenges.

Philip Morris reports that about 40% of its revenue now comes from smoke‑free products. The company previously set a target of more than 30% by 2019 and later revised its longer‑term ambition. Philip Morris’s shares trade at a price‑to‑earnings ratio near 26 and a dividend yield near 3.4%. British American Tobacco’s American Depositary Receipt trades at a P/E near 14 and a dividend yield around 5%.

BAT’s ADR represents one ordinary share of British American Tobacco on the London Stock Exchange. The ADR depositary bank deducts a small annual custodial fee of $0.02 from dividend payments. Currency exchange movements affect the dollar value of BAT’s ADR dividends and can make dividend history appear uneven in U.S. dollar terms.

Regulatory approvals and the pace of market rollouts differ across jurisdictions. U.S., European and other national rules determine which devices companies can sell and how quickly they can scale production and distribution.

Investors and analysts track market shares and brand positions across nicotine pouches, heated‑tobacco systems and closed‑pod vaping as sales of combustible cigarettes decline in several markets.