Imperial Brands must invest in new, safer heating products to compete with tobacco giants

The tobacco giant's reluctance to develop reduced risk materials could impact on long term growth after rival firms have poured billions into developing safer cigarette technology.

British American Tobacco (BAT), Philip Morris International (PMI) and Japan Tobacco International (JTI) all have safer heat-not-burn brands, with BAT investing over £1bn in the last five years in the development and launch of next generation products.

Imperial are under pressure to embrace new heat-not-burn smoking technology that is said to significantly reduce damaging toxicant emissions.

These claims rest on the premise most toxicants and carcinogens are formed by the actual burning of tobacco. New products reduce this by heating the tobacco rather than actually burning it.

BAT's Vype brand is now established in the UK. It has also developed a nicotine inhaler called Voke that can be licensed as a medical product in Britain, but it is not yet on the market.

Last month, PMI launched a product in the UK called IQOS, already launched in Italy, Japan and Switzerland after a £1.5bn research programme. This product also heats tobacco rather than burning it.

Now, leading City analysts have begun to question Imperial's stance.

Christian de Roualle, equity analyst in global tobacco at Redburn said:
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