Analysts Say FDA Menthol Probe Threatens Tobacco Profits

Investment advisors are worried that the U.S. Food and Drug Administration’s (FDA) review of menthol cigarettes could pose a serious risk to cigarette companies that sell the flavored smokes, the Associated Press reported May 14.

Fitch Ratings said companies like Lorillard (maker of top-selling menthol brand Newport), Reynolds American and Altria could face further regulation stemming from the review, although the analysts opined that an outright ban of menthol cigarettes would be difficult for FDA to justify based on comparative health risks.

“However, risk for tobacco companies lies in the FDA potentially choosing to give more weight to studies that find menthol cigarettes harmful for reasons of better data collection, better study methodology, or other factors,” according to Fitch.