Developing

BAT Smokes Out E-Cigarette Rivals

British American Tobacco (LSE: BATS.L - news) (BAT) is preparing to launch its biggest assault to date on the electronic cigarette market as it attempts to bolster sales of tobacco substitute products.

Sky News understands that the world's second-biggest tobacco company by sales is to launch Vype, a new e-cigarette brand, in the UK, France and Germany in the coming months.

The launch, which will be backed by a multimillion pound marketing budget, follows BAT's acquisition last year of CN Creative, a Manchester-based company that specialises in e-cigarette products.

It comes as the major tobacco companies continue to face growing clampdowns on their ability to package and market conventional cigarette products, even in markets where they have previously enjoyed the freedom to do so.

Nicandro Durante, BAT chief executive, has previously forecast that tobacco alternatives could make up 40% of the company's revenue in 20 years' time, which would probably make them responsible for at least £10bn of annual sales based on current growth rates.

Insiders said that Vype would be a renamed CN Creative product rather than an entirely new launch.

The push into a category dubbed 'safer cigarettes' has angered some campaigners, who believe they are a public relations exercise whose real purpose is to encourage young consumers to become familiar with the habit of smoking.

The row over cigarette packaging recently intensified with the Government's decision to drop legislation that would have forced manufacturers to use only plain packaging to sell their products.

BAT declined to comment on Vype.