BAT Launches High-Tech Vape in U.K. to Fend Off Juul, IQOS

(Bloomberg) -- British American Tobacco Plc is introducing a vaping device in the U.K. that delivers nicotine more efficiently, the latest salvo in a battle to attract smokers to cigarette alternatives amid ever tougher regulations on smoking.

BAT is debuting the new product, dubbed Vype iSwitch, in the face of competition from Philip Morris International Inc.'s IQOS as well as Juul, the industry upstart that started selling e-cigarettes in the U.K. five months ago.

The new device comes out of BAT's $2.5 billion research drive into smoking alternatives. As the name suggests, the company hopes the iSwitch will lure more traditional tobacco smokers to start vaping. The product's success could be critical as U.S. regulators mull stricter tobacco restrictions.

“There are many more smokers who have yet to find a satisfying vaping alternative,” Elly Criticou, BAT's vapor category director, said in a statement.

The iSwitch comes in a standard version, which retails for about 30 pounds ($38), and an upscale version, the Maxx, which sells for about 50. Both devices are available at five stores that BAT runs under the VIP brand in London, and further expansion is planned early next year. Replacement cartridges retail for about 9 pounds for a pack of two.

Blade Pioneer

The iSwitch lets the user take a bigger mouthful of vapor than other devices. Rather than using a metal coil to vaporize liquid nicotine, the new device is the first on the market that uses a stainless steel blade for heating, according to the company. That helps deliver a hit more efficiently to the user.

The pressure is on to further develop the market for e-cigarettes. Global demand for combustible tobacco products declined 3.5 percent in 2017, according to BAT's annual report.

The decline could be pushed further along by regulators in the U.S. An official at the U.S. Food and Drug Administration said earlier this year that the agency may ban menthol cigarettes, the source of at least 20 percent of BAT's earnings.

Alternatives such as vapes may help assuage the concerns of regulators worried about tobacco's impact on health. A 2015 study published by Public Health England found that e-cigarettes are 95 percent less harmful than smoking. But concerns remain about the potential health impact on both youth and adults.

To contact the reporter on this story: William Mathis in London at wmathis2@bloomberg.net

To contact the editors responsible for this story: Eric Pfanner at epfanner1@bloomberg.net, Thomas Mulier, John J. Edwards III

©2018 Bloomberg L.P.