British American Tobacco (BTI) was feeling the burn again Tuesday after the company said Britain's Serious Fraud Office has opened a probe into alleged misconduct at the world's biggest listed tobacco group, which is thought to be connected to past allegations of bribery in east Africa.

The world's fourth largest tobacco producer told investors last year it had appointed a lawyer to investigate allegations that it had bribed officials in east Africa in order to derail tough new anti-smoking policies. It referenced the internal investigation in Tuesday's announcement before saying that it will cooperate with the SFO probe.

BAT shares were marked 2% higher in the opening 30 minutes of trading in London and changing hands at 4,803 pence each after having fallen around 11.8% over the past two sessions. 

The Food & Drug Administration sent shares of tobacco companies like BAT up in smoke Friday after it hinted at possible future measures to restrict the level of nicotine that cigarettes can contain. 

British American Tobacco, which has just spent $49 billion on buying American tobacco firm Reynolds American RAI, saw its shares slump by more than 10% in the immediate aftermath of the announcement before paring some of its losses to close 7.4% lower. 

Regulatory action is a perennial threat to investors in tobacco companies although interference from state authorities has been more common in Europe and Australia than it has in the U.S.

A European Commission law came into force in May 2017 which bans branded packaging of cigarettes, meaning all must be sold in plain packaging, and imposes a minimum packet size of 20 cigarettes.  

The British government raises more than £12 billion ($15.6 billion) annually from excise, sales and other taxes on cigarette sales and has recently imposed a minimum packet price of £7.35 ($9.55) on the industry, which has led analysts to warn that the U.K. market is fast approaching an affordability ceiling. 

Alan Erskine at Credit Suisse flagged, back in January, that tobacco consumers in the U.K. now spend an estimated 15% to 20% of their disposable income on cigarettes, saying; "In our view, this represents something of an affordability ceiling."#

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