Menthol ban fear for BAT

OVER £7billion was wiped from the value of British American Tobacco yesterday as investors took fright at a potential ban on menthol cigarettes in America.

FTSE 100 giant BAT became the world’s biggest quoted tobacco company last year after a £40billion deal to take full control of US rival Reynolds American, owner of leading menthol brand Newport as well as Camel and Pall Mall.

Menthol accounts for over one-third of the US market and generates about a quarter of BAT’s profit.

BAT’s shares plunged 352p to 2962½p, while Imperial Brands, which owns Gauloises, Davidoff and Lambert & Butler, fell 60p to 2690p.

The US Food and Drug Administration may want to ban menthols as they are harder to quit, as the flavour soothes the throat but still contains addictive nicotine. However, it could take up to two years for a ban to come in, including a year for the rules to be finalised.

The FDA is also cracking down on flavoured electronic cigarettes after warning of a teenage vaping “epidemic”.

BAT’s head of corporate affairs Simon Cleverly said: “We are not aware of anything to suggest the FDA would deviate from its multi-year comprehensive, rulemaking process on flavours in tobacco products, which includes menthol.

“This process includes a thorough review of the science and unintended consequences with further regulatory steps that will take time to complete.

“We believe the evidence shows that menthol does not encourage people to smoke, make smoking harder to quit or increase the risks to health.

“If the FDA does make an announcement this week indicating that it wishes to regulate menthol cigarettes, any such proposal will have to go through the multi-year rulemaking process, including public comment, a potential review by the Tobacco Products Scientific Advisory Committee and will be subject to judicial review.

“In any event, we look forward to continuing to participate in a thorough science-based review to address the use of flavours in tobacco products.”