The UK’s biggest tobacco firms saw almost £1 billion wiped off their shares as they warned that the Government plan to raise the legal age for buying tobacco “threatens significant unintended consequences”.
Prime Minister Rishi Sunak told the Conservative Party conference that he plans to introduce a new law banning tobacco sales to anybody born on or after January 1 2009.
He also pledged to crack down on the sale of disposable vapes to children.
In the speech in Manchester, Mr Sunak said that “a 14-year-old today will never legally be sold a cigarette”, under new legislation for England.
He added: “I propose that in future we raise the smoking age by one year every year.
“That means a 14-year-old today will never legally be sold a cigarette and that they and their generation can grow up smoke free.”
The announcement came as a surprise to investors and was felt on the stock market.
Dunhill and Lucky Strike owner British American Tobacco (BAT) saw its shares slide from roughly flat to 1% lower immediately after the announcement, knocking around £600 million off its market value.
Meanwhile, fellow London-listed firm Imperial Brands saw shares fall 2.4% lower after the update. It saw its market value decline by around £340 million.
The company, which owns Gauloises and Rizla, said it would engage with the Government but also cautioned over the policy move.
A spokesman for Imperial Brands said: “We understand the Government’s desire for new tobacco control measures, because of the health risks associated with smoking.
“But, like any prohibition, the proposal to ban the legal sale of cigarettes over time threatens significant unintended consequences.
“On vaping, we will continue to engage with the Government to create effective policies which prevent youth access and build trust in the category as a potentially less risky alternative for existing adult smokers.”
Supreme, which makes disposable vaping products, also saw its shares move lower on Wednesday.