The UK's major tobacco companies witnessed a collective loss of nearly £1 billion in share value as they voiced concerns about the government's plan to raise the legal age for tobacco purchases, citing potential "significant unintended consequences."
Prime Minister Rishi Sunak surprised investors with his announcement at the Conservative Party conference, proposing a new law that would prohibit tobacco sales to individuals born on or after January 1, 2009. The stock market responded swiftly, with British American Tobacco (BAT), the owner of Dunhill and Lucky Strike, experiencing a drop in shares, declining from approximately stable to 1% lower, resulting in a market value decrease of approximately £600 million.
In a similar vein, Imperial Brands, another London-listed company that owns brands like Gauloises and Rizla, saw its shares decrease by 2.4% following the announcement, causing its market value to shrink by around £340 million. While the company expressed its willingness to engage with the Government on this policy, it also raised concerns regarding the potential ramifications of the proposed change.
Supreme, a manufacturer of disposable vaping products, also experienced a decline in its share price on Wednesday.