LONDON, March 6, 2026, 08:06 GMT
British American Tobacco is being sued in London by over 100 current and former shareholders, who allege the company didn’t fully disclose U.S. sanctions breaches tied to its North Korea operations. The group lodged their claim at London’s High Court on Feb. 27, according to the claimants’ legal team.
BAT’s legal headaches come at a tricky moment. Just last month, the company reiterated its 2026 guidance: it’s sticking to 3% to 5% sales growth, 4% to 6% in operating profit, and a 5% to 8% rise in per-share earnings, each figure pegged to the low end of the stated ranges. Spending continues to flow into new nicotine offerings and efforts to boost productivity.
Fox Williams, representing one group of claimants, alleges BAT failed to disclose key details to investors about its business ties with North Korea from 2007 to 2023. BAT, for its part, acknowledged the lawsuit, which centers on what it called its “historical business activities” in North Korea. The company also pointed to its 2023 U.S. agreement, saying that limits it from discussing the relevant documents or facts. Reuters
The dispute stems from BAT’s 2023 deal with U.S. authorities. At the time, Reuters said BAT agreed to pay $635.2 million over three separate cases, following a guilty plea from one of its subsidiaries tied to tobacco shipments to North Korea and bank fraud spanning 2007 to 2017. The Justice Department described the penalty as the largest ever imposed for North Korea sanctions violations.
The Lucky Strike maker is facing legal trouble just as it’s trying to convince investors that its pivot away from cigarettes is working. On Feb. 12, the company reported full-year numbers: smokeless products made up 18.2% of group revenue in 2025, while profit per share on an adjusted basis climbed 3.4%. Chief Executive Tadeu Marroco called Vuse’s recent momentum “encouraging.” BAT
Velo nicotine pouches, Vuse vapes, and heated-tobacco products are at the core of the shift. BAT said Velo now holds the No. 2 U.S. market share, trailing only Philip Morris International’s Zyn, and continues to nibble away at Altria’s On! share. Jefferies analyst Andrei Andon-Ionita called BAT “well-positioned” to keep picking up ground in the U.S. pouches segment. Reuters
BAT isn’t out of the woods yet. Back in February, interim CFO Javed Iqbal warned investors that Australia would continue to be “a meaningful drag” looking ahead to 2026. For the U.S. market, he flagged that BAT expects Vuse volumes to stay flat, citing slow progress as regulators crack down on illegal vapes. BAT
Cost remains the big question mark. Reuters reported that the size of the claim hasn’t been made public, with court documents also revealing a second suit against BAT filed that same day. Prolonged litigation would mean higher legal costs and more distractions for management, just as the company is pushing new launches like Vuse Ultra, glo Hilo and Velo Shift.
Back in February, Philip Morris projected double-digit adjusted earnings growth for 2026. BAT, on the other hand, is sticking with a more cautious tone, despite moving forward with its £1.3 billion share buyback and targeting debt within range by the end of 2026. Investors are focused on how both companies deliver.
