BAT Faces Financial Hit Amid Legal and Regulatory Challenges

British American Tobacco faces a £6.2 billion setback due to a lawsuit in Canada. The firm anticipates headwinds in Bangladesh and Australia due to regulatory and tax pressures. BAT expects revenue recovery by 2026, but ongoing legal disputes and objections to settlements could prolong challenges.

British American Tobacco (BAT) reported on Thursday a substantial financial setback of £6.2 billion, attributed to an extended lawsuit in Canada. The company also projected significant challenges in Bangladesh and Australia, citing impending regulatory and fiscal pressures that could impact its 2025 performance.

The global tobacco industry, including BAT—the maker of renowned brands like Lucky Strike and Dunhill—continues to grapple with ongoing legal challenges related to the health impacts of tobacco products. Efforts to settle a longstanding Canadian lawsuit may face delays due to objections from certain parties, including affiliates of Philip Morris International.

In response to these challenges, BAT's strategy hinges on investments aimed at stabilizing revenue, targeting a growth range of 3% to 5% by 2026. While analysts noted current revenue aligned with expectations, the outlook for 2025 remains cautious, as current fiscal strategies and legal resolutions continue to unfold.

(With inputs from agencies.)