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2010-03-15: FDA panel to target menthol cigarettes
FDA panel to target menthol cigarettes
Mon Mar 1, 2010 6:33pm EST
WASHINGTON (Reuters) - A U.S. scientific panel this month will weigh the controversial role of popular menthol flavoring in cigarettes in the first public meeting on tobacco products since a new law granted regulators power over the industry last year.
Over two days, the Food and Drug Administration's panel of outside experts will look at the health impact of the mint-like additive on smoker's use as well as addiction and health, with another meeting set later this year, the FDA said on Monday.
The panel's findings and any possible regulatory action against menthol could be a potential blow to Lorillard, the nation's third-largest cigarette company and maker of the top-selling menthol brand, Newport.
"It's the beginning of a long, slow funeral procession for menthol," said healthcare analyst Ira Loss of Washington Analysis Corp.
Lorillard, which also makes Kent, Maverick and True brand cigarettes, had no comment on the FDA meeting.
While it is not immediately clear what action, if any, the FDA or its panel will take, the meetings will keep a heavy regulatory spotlight on the flavoring.
Menthol cigarettes, smoked by about 12 million Americans and 75 percent of African American smokers, have come under scrutiny by antismoking advocates who say the taste can be more enticing and possibly addicting than regular cigarettes.
Bipartisan legislation that gave the FDA oversight of cigarettes and other tobacco products banned other flavors such as chocolate, clove and fruit. But lawmakers exempted menthol, the most popular flavoring accounting for about 27 percent of the cigarette market, and instead called for an FDA review.
The meeting will also offer the first public glimpse into the FDA's handling of the industry since the agency in August set up its new tobacco center, opposed by most tobacco companies except the nation's largest cigarette maker, Altria Group Inc's Philip Morris unit.
Credit Suisse in January downgraded the U.S. tobacco sector to "market weight" from "overweight," citing concerns about the growing threat of regulations.
Mark McMinimy, an analyst with Concept Capital's Washington Research Group, said the meeting highlights the FDA's potential power even as the impact on the industry is still unclear. "There's going to be a lot of concern about where this is heading exactly," he said.
At the meeting, scheduled for March 30 and 31, FDA panelists will focus on who smokes menthol cigarettes and the flavoring's effects on how cigarettes are smoked. Another meeting this summer will feature industry research and documents.
Matthew Myers, president of Campaign for Tobacco-Free Kids, which backed the new law, said it was too early to say what action the panel or the FDA may take. "We have to give them time to collect the scientific information," he said.
Some experts and financial analysts have said they do not expect an outright ban on menthol, although the FDA could take such action, among other steps such as product label changes.
The whole process could take years, McMinimy said.
Despite the cigarette flavoring ban, coffee, mint and others are still used in controversial dissolvable tobacco products sold by Reynolds American Inc and Star Scientific. Some experts had expected FDA's panel might first tackle such candy-like tobacco products.
Shares of Lorillard closed off 0.4 percent at $72.76 on the Nasdaq. Shares of Reynolds closed up 0.8 percent at $53.24, while shares of Star Scientific ended unchanged at 95 cents.
(Reporting by Susan Heavey; Editing by Gary Hill)