BAT seeks German nicotine pouch rules and offers new factory
British American Tobacco says it would open a factory in Germany if the country introduced stable, long-term regulation for nicotine pouches. The company estimates that the existing market involves about 1.5 million users and could generate €500 million in tax revenue.
Factory offer tied to regulation
British American Tobacco has offered to open a new factory in Germany if the country legalizes nicotine pouches and introduces long-term, predictable rules for the category. Blagoje Jovanovic, BAT’s Germany chief, told t-online that plans for a plant already exist, although the company has not determined its size or the number of jobs it could create.
BAT cannot currently sell its Velo nicotine pouches in Germany. Jovanovic said the products nevertheless reach consumers through online channels and are also sold unofficially in outlets such as Berlin convenience stores. According to BAT’s estimate, about 1.5 million people in Germany already use nicotine pouches.
The executive argued that legal sales would allow the authorities to set product standards, enforce age restrictions and collect taxes. BAT estimates the potential tax revenue at about €500 million. Both the user figure and the revenue projection are company estimates reported by t-online, rather than official German government calculations.
European markets provide a regulatory model
Jovanovic pointed to Poland and Austria as examples of European Union countries where nicotine pouches are sold under regulation. His position is that prohibition has not removed German demand, but has instead left the authorities with limited control over products and access by minors.
The proposal also serves BAT’s commercial interests. Legalization would give the group access to a German category from which its Velo brand is currently excluded. A domestic factory would depend on the eventual size of the regulated market, and Jovanovic did not provide figures for investment, capacity, production volumes or employment.
Nicotine pouches remain addictive products, a point Jovanovic acknowledged in the t-online interview. The debate therefore extends beyond tax receipts and industrial investment. German policymakers would need to decide whether regulated availability, with age and product controls, would improve oversight compared with the existing unofficial market.
BAT shifts spending toward newer products
The regulatory request forms part of BAT’s broader effort to reduce its dependence on conventional cigarettes. The company wants products including e-cigarettes, heated tobacco and nicotine pouches to account for half of global revenue by 2035. It is also targeting 50 million consumers in these newer categories worldwide by 2030, while setting no date for the final sale of cigarettes.
In Germany, BAT is currently directing most of its investment in the segment toward the Vuse e-cigarette brand. It previously reduced spending on its Glo heated-tobacco system, where Jovanovic said Philip Morris benefited from bringing Iqos to market earlier. BAT plans to increase Glo investment again and introduce an improved product, but disclosed no timetable or budget.
The company is also preparing for restrictions affecting disposable vapes. From February 2027, products with permanently installed batteries in their current form can no longer be newly placed on the market, according to t-online. BAT says disposable devices represented 80% to 85% of the e-cigarette business several years ago but now account for about 30%; rechargeable closed systems with replaceable pods represent roughly 70%. BAT expects its devices to use replaceable batteries by the deadline.