British American Tobacco (BAT) took a $31.5 billion hit as it cut down the value of its U.S. brands, reported Reuters. The company stated that it believes the traditional cigarette market does not have a long-term future.

This markdown is the first time that a major global tobacco company has written off the value of traditional cigarettes in a major market while emphasizing the need for the industry to focus on alternatives, according to Reuters.

The massive write off comes as regulation surrounding cigarettes and growing health risk awareness impacts the market, including a planned menthol ban.

The company cited various challenges in the United States as reasons for the move, from inflation-weary customers switching to cheaper brands to the rise of illicit disposable vapes, reported Reuters. BAT says that these factors, along with an overall shift away from smoking, meant that “it would adjust the way some of its U.S. brands are treated on its balance sheet, shifting their value to a finite lifetime of 30 years.”

Brands affected by the valuation include Newport, Camel, Pall Mall and Natural American Spirit brands, added a spokesperson.

Chief Executive Tadeu Marroco described the move as “accounting catching up with reality.” He added that while he did not believe that cigarettes would disappear in 30 years, the cost was no longer justifiable.

According to Reuters, “BAT said full-year revenue growth would likely be at the lower end of its 3-5% range. It also expected low single-digit growth in revenue and adjusted profit from operations in 2024.” The company also stated that it plans to start amortizing the remaining value of its U.S. combustibles brands in 2024 and announced a new goal of generating 50% of its revenue from non-combustibles by 2035.

Despite the BAT’s insights, cigarette sales in the United States are still strong in the convenience channel. Read “Cigarettes Are Still Powering Sales” to learn more about the category.