By Peter Evans

LONDON-- British American Tobacco PLC said Thursday it would sue the U.K. government if it approves "plain packaging" proposals to ban branding on cigarette packs.

"If regulation comes through, we will be forced into the position of a legal challenge," said Jerome Abelman, BAT's director of corporate and regulatory affairs, in an interview with The Wall Street Journal. "Once the regulations become law, we expect the lawsuits will follow very quickly."

British politicians will vote next month on whether to mandate plain packaging on all tobacco products sold in the country, meaning cigarettes would be packaged in unbranded cartons adorned with graphic health warnings. The law has received widespread support from Britain's three main political parties and is expected to pass. If passed, the law could come into effect as early as next year.

BAT is the first tobacco manufacturer to say it would definitely take legal action if the plain packaging vote is passed. Others, including Philip Morris International Inc. and Japan Tobacco Inc., have questioned the legality of the plans, but have stopped short of saying they would sue the British government.

The decision comes as BAT reported a big slide in 2014 profit, with its performance battered by exchange rate movements. The company reported profit of GBP3.12 billion ($4.85 billion), compared with GBP3.90 billion in 2013, on revenue that was 8.4% lower at GBP13.97 billion.

BAT said currency devaluations, notably in the ruble, yen and Brazilian real, had an adverse impact of GBP1.71 billion on its revenue.

The maker of Lucky Strike and Dunhill said the volume of cigarettes sold declined 1.4%, compared with a fall of 2.7% a year earlier.

"We expect the trading environment to remain difficult in 2015, and that foreign exchange headwinds will continue to have a significant impact," said Chief Executive Nicandro Durante.

Write to Peter Evans at peter.evans@wsj.com

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