WASHINGTON (Dow Jones)– Major tobacco makers urged a federal advisory panel against banning menthol cigarettes, arguing such a ban would likely create an unregulated black market.
The Food and Drug Administration was given the authority to regulate tobacco products in 2009. As part of the tobacco law, all tobacco flavorings except for menthol were banned on concerns the flavors enticed children and adolescents to start smoking.
The FDA is currently research, Why Cigarettes are so Popular? The panel is holding a series of meetings as it considers what information to include in the report, including a two-day meeting that started Monday.
The panel could recommend an outright ban of menthol or marketing restrictions. The FDA isn’t required to follow its panel’s decision, although the agency traditionally follows the advice of its outside advisory panels.
One question is whether menthol masks the harshness of tobacco and makes it easier to smoke cigarettes and harder to quit. The tobacco industry has said there’s no evidence that menthol in cigarettes makes it more likely people will start smoking compared to regular cigarettes. Another question the panel is considering is whether there’s an increased risk for disease among menthol smokers compared to regular-flavored cigarette smokers.
Menthol cigarettes account for about 30% of total cigarette sales in the U.S. The issue is of major importance to Lorillard Inc. (LO), the maker of the leading menthol brand, Newport. The product accounts for roughly 90% of Lorillard’s sales.
Lorillard funded a study that was conducted by Compass Lexecon, a Chicago-based economic consulting firm and was presented to FDA’s panel Monday. The report concluded that a “sizable black market” would quickly emerge if menthol cigarettes were banned.
Jonathan Samet, chairman of the tobacco products scientific advisory committee, said there would likely be some mention of the “possibility” that a black market for menthol products would be created in the menthol report.
Representatives from Lorillard and RJ Reynolds, part of Reynolds American Inc. (RAI), who spoke at the meeting, said there’s no reason to regulate menthol cigarettes differently than regular cigarettes. They also argued that banning menthol is unlikely to bring down current smoking rates.
Altria Group Inc. (MO), the parent company of Philip Morris, said in written comments provided to the committee that it’s “difficult to predict with absolute certainty what consumers would do if menthol cigarettes were banned” but said a menthol ban “is likely to significantly increase the total demand for illicit cigarettes.”
The company said it was possible that some people would quit smoking, but others would likely smoke a non-menthol brand or obtain menthol cigarettes from “unregulated sources or make their own menthol cigarettes.”
New federal survey data presented by the National Cancer Institute at the panel meeting showed about 40% of current menthol smokers said they would quit if menthol cigarettes were banned, although it isn’t clear if those who said they would quit would be successful at doing so.
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