More Opposition To Menthol Cigarettes, But Few Worries for Altria (MO)

A tobacco bill is pending in the US Congress that would, for the first time, give the FDA the power to regulate tobacco. Phillip Morris aka Altria (MO) is supporting the bill because menthol cigarettes would not be affected. Menthol makes up 28% up the $70 billion US cigarette market and Altria has a big share of this.

Opposition to the menthol exemption is growing (see below), but the bill has already been passed by key committees in the House and Senate. And even if menthol is ultimately banned (which is still unlikely), the change would not likely have a meaningful impact on Altria’s financial performance: The firm only generates one-third of its operating income from the US market, and most menthol customers would probably switch to a new brand. It’s the nicotine that is addictive, not the mint taste.

The menthol exemption is starting to draw serious criticism (NYT):

Seven former federal health secretaries joined on Wednesday to protest menthol’s special treatment in a tobacco bill pending in Congress….

One of the former secretaries, Joseph A. Califano Jr., said the legislation was “clearly putting black children in the back of the bus.” He was referring to menthol cigarettes as being the choice of three out of four black smokers and being frequently preferred by young smoker.

See Also:
Cigarette Lobby Wins Again: Altria Saves Its Menthols

Business Insider Emails & Alerts

Site highlights each day to your inbox.

Follow Business Insider Australia on Facebook, Twitter, LinkedIn, and Instagram.

Tagged In