Wednesday, 20 February, 2019

FDA may begin process of banning menthol cigarettes

British American Tobacco cigarettes A Wall Street Journal report revealed that the US Food and Drug Administration could ban menthol cigarettes
Nellie Chapman | 15 November, 2018, 18:27

"Proposals to ban menthol cigarettes in the USA have been for the table for many years and we will continue to engage with the FDA on the topic", said spokesman of Imperial Brands.

Shares of tobacco stocks were lower Monday morning amid reports that the Food and Drug Administration will announce a proposal to ban menthol cigarettes as soon as this week.

E-cigarettes and their liquid nicotine flavors would continue to be sold in dedicated vape stores, where the FDA believes age verification procedures are more reliable.

"The FDA concluded in 2013 that menthols are harder to quit and likely pose a greater health risk than regular cigarettes".

Senior agency officials with knowledge of the matter told the Journal that Gottlieb may be looking to move forward with a process to have menthols banned as part of the FDA's crackdown on teen vaping.

The Wall Street Journal followed up with its own report Friday that said the FDA could propose a ban on menthol cigarettes.

Dow Jones quoted analyst firm Jefferies saying it would require a lengthy evidence-gathering process to get the ban through U.S. courts.

The mooted ban, which could take up to two years to take effect, would be a massive blow for manufacturers of menthols such as British American Tobacco (BAT) and Imperial Brands.

It also highlights that despite the move towards vapour and heated-tobacco products, BAT is still heavily reliant on its cigarettes business.

"Menthol will make you inhale more".

Steadily declining numbers of smokers paired with an increasingly hostile regulatory environment for tobacco products have troubled shareholders for some time now.

BAT shares have dropped 40 percent this year, the biggest drop in at least two decades.

A previous study also found that a huge percentage of African-Americans are addicted to traditional menthol cigarettes.

British American Tobacco fell 9% to £30.15 while Imperial Brands declined 3.8% to £36.44 on the speculation. The Winston maker gets about 15% of earnings from menthol brands such as Kool and Salem in the United States, according to Jefferies.