LONDON, April 2, 2026, 16:11 BST
British American Tobacco p.l.c. is facing another setback stateside, with the FDA’s expedited review of nicotine pouches losing steam and BAT’s Velo products now in regulatory limbo. The snag has reignited questions around one of BAT’s core growth strategies. Shares fell 1.5% on Wednesday as news of the slowdown broke, but regained 1.6% by 0948 UTC Thursday, recovering some lost ground.
Timing is key here. Velo now sits at the heart of BAT’s effort to pivot away from cigarettes in the U.S.—the biggest market out there for smoking alternatives. All this comes as BAT projects that both its revenue and underlying profit for 2026 will end up toward the lower end of its medium-term goals. Back in February, BAT stuck to its guidance, still seeing 3%-5% revenue growth and profit growth in the 4%-6% range for this year on a constant-currency basis, so not including exchange-rate effects.
Nicotine pouches—tiny packets tucked under the lip—give users a hit of nicotine, minus the tobacco burn. U.S. regulators say these products need FDA approval before hitting shelves. Facing complaints about delays, the agency rolled out a pilot program last September aimed at expediting the process; six on! PLUS pouches got the green light in December.
BAT maintains its Velo applications deserve clearance, citing strong scientific backing, and says talks with the FDA are ongoing. The FDA confirmed to Reuters that the applications remain in the queue for quicker decisions compared to most, but wouldn’t commit to a timeline. Philip Morris International is still waiting on approvals for newer Zyn versions. Altria, on the other hand, already has the green light for its on! PLUS line. “BAT and PMI shares trade on pouches,” said Jefferies analyst Andrei Andon-Ionita. Reuters
BAT has been betting heavily on that segment. Back in February, Chief Executive Tadeu Marroco called Velo’s U.S. results “extremely encouraged.” Not long after, BAT reported Velo had climbed to the No. 2 spot in U.S. volume and value share. That boost pushed smokeless products up to 18.2% of group revenue in 2025. Reuters
The risk is right in front of BAT: a slow-moving FDA could sap its edge in the booming nicotine pouch market, just as regulators ramp up scrutiny over youth use and adults new to nicotine. FDA data out this year puts 12th grade pouch use at more than double what it was between 2023 and 2025, though youth overall still use at low rates.
BAT isn’t out of options yet. Management pointed to a return to double-digit growth for new-category revenue in the back half of 2025, and there’s a £1.3 billion share buyback on tap for 2026. The group expects to bring leverage down to its 2.0–2.5 times target by year-end 2026. CEO Marroco described Vuse’s recent momentum as “encouraging,” though the U.S. illicit vape market and higher taxes—plus illicit trade in Australia and Bangladesh—are still dragging on certain segments. BAT
BAT investors will get their next official update on April 15 in London, when the company holds its annual general meeting. Expect more detail on the U.S. review timeline and just how much this year’s growth hangs on Velo.
