The U.S. Food and Drug Administration on Thursday proposed a ban on menthol cigarettes and flavored cigars, a long-awaited win for anti-smoking and civil rights groups but one that could erase a huge share of sales for the Big Tobacco.
The proposed ban can take years to implement and might throw the health regulator into protracted legal battles with the deep-pocketed industry, which has repeatedly fought attempts to block anti-tobacco regulations.
Anti-smoking groups have for decades argued that mentholated cigarettes contribute to disproportionate health burdens on Black communities and often draw young people into smoking.
Campaign for Tobacco-Free Kids President Matthew Myers said the latest move could be the "strongest action" that the United States "has ever taken to drive down the number of kids who start smoking".
The FDA statement sent shares of Altria Group Inc, British America Tobacco Plc, and Imperial Brands Plc were down about 1%.
U.S. menthol cigarettes accounted for about 25% of BAT's profit, 20% for Altria and 15% for Imperial, according to brokerage Jefferies. Altria and Reynolds America, a unit of BAT, said they would evaluate the proposal, while Imperial's U.S. business, ITG Brands, said it was disappointing, but not unexpected.
"We share the common goal of moving adult smokers from cigarettes to potentially less harmful alternatives, but prohibition does not work," Marlboro-maker Altria spokesman said. "Criminalizing menthol will lead to serious unintended consequences."
Menthol cigarettes are banned in many U.S. states including California and Massachusetts and smoking rates in the country have been declining for many years, but they still account for more than a third of the industry's overall market share.
The FDA was forced to act by an April 29 court deadline to respond to a citizen's petition from 2013 seeking a ban on menthol cigarettes. (https://bit.ly/3u5oomP)
Last week, a WSJ report said the Biden administration was considering capping nicotine levels in cigarettes.
"Lowering nicotine content in cigarettes...that's something that's still under consideration," acting FDA Commissioner Janet Woodcock said on a media call on Thursday.
"It's on the table, but we have not finished deliberations on that matter."
(Reporting by Ankur Banerjee and Nivedita Balu in Bengaluru, additional reporting by Uday Sampath Kumar and Aishwarya Venugopal; Editing by Bernard Orr and Arun Koyyur)
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