Shares of Marlboro producer Altria Group plunged on Monday following a report that the US government is considering a rule that would lower the nicotine content of cigarettes.
The Biden administration is mulling a requirement that nicotine be lowered to levels that aren't addictive, the Wall Street Journal reported, citing people familiar with the matter. The Food and Drug Administration could also move to ban menthol cigarettes, the newspaper said.
Shares of Altria, which sells the Marlboro brand in the US, slumped 6.2 per cent in New York trading. Philip Morris International, which sells the brand internationally, also declined. Stock of 22nd Century Group, which sells cigarettes with very low nicotine levels, jumped 11 per cent.
The FDA declined to comment on the report.
In an email, Altria said any FDA action “must be based on science and evidence and must consider the real-world consequences of such actions, including the growth of an illicit market and the impact on hundreds of thousands of jobs from the farm to local stores across the country”. The company said it will “continue to engage in this long-term regulatory process”.
The FDA has been expected to state its position on whether it would still allow menthol cigarettes by April 29, under a deadline imposed by a lawsuit. The case, brought by the African American Tobacco Control Leadership Council, had sued the government agency saying it had taken an unreasonably long time to respond to a citizen’s petition filed years ago that sought to prohibit menthol as a flavour in cigarettes.
There has also been anticipation that the agency would make a decision about nicotine levels in cigarettes. The agency had declared in 2018 that it intended to do so, but Altria had said it wasn’t clear whether that was “technically achievable” or would lead to reduced smoking. Since then, 22nd Century Group, based in Williamsville, New York, has come out with reduced nicotine cigarettes.