Rothmans and Lucky Strike owner British American Tobacco (BAT) has seen billions of pounds wiped off its market value after a report claimed United States regulators are planning to ban menthol cigarettes.
BAT owns Newport, the leading menthol brand in the USA, and sales of the mint-flavoured products there are estimated to bring in a quarter of the company's revenues, according to analysts at Morgan Stanley.
Shares in tobacco companies British American Tobacco (BATS) and Imperial Brands (IMB) have taken an hit on reports that the U.S. regulatory agency may propose a ban on menthol cigarettes. As early as this week, Gottlieb is expected to announce a ban on the sale of fruit- and candy-flavored e-cigarettes from companies like Juul in convenience stores and gas stations in order to stop young people from getting addicted.
However, it should be noted that the development of the norm prohibiting menthol cigarettes, you may need at least a year, and another year to the ban came into force.
The Wall Street Journal followed up with its own report Friday that said the FDA could propose a ban on menthol cigarettes.More news: Jimmy Kimmel reveals Stan Lee drawing he sketched at 7
Imperial will continue to engage with the FDA about menthol cigarettes, but will not comment further until there's a formal update from the agency, spokesman Simon Evans said by email.
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.
The major tobacco companies did not comment on the Times' story.
After the announcement of the intentions of the BAT shares fell almost 9 percent.
The FDA has been targeting flavored tobacco products as studies indicate that teens who smoke menthol cigarettes consumed close to twice as many weekly compared with non-menthol users. They have had only two annual declines in the past 19 years.