Tobacco actions go up in smoke amid US crackdown | Business

British American Tobacco and Imperial Brands lost £ 7 billion of their market value as US regulators prepare to curb the sale of flavored electronic cigarettes and menthol cigarettes.

BAT, the sixth largest FTSE100 company and maker of brands such as Lucky Strike, Dunhill, Rothmans and Benson & Hedges, fell 11%, dropping its market value from £ 76 billion to 69 billion on Monday. . The share price of the tobacco company has fallen by nearly 40% in the last year.

The Imperial Brands share price, a maker of products including Lambert & Butler, Davidoff, Gauloises and John Player Special, has fallen by more than 3%. The £ 25 billion company, number one on the UK market, has lost about £ 1bn of its market value.

The US Food and Drug Administration will ban this week the sale of most flavored electronic cigarettes in tens of thousands of convenience stores and gas stations in the United States. The agency, which is trying to limit the huge increase in teenage vaping, will also impose age verification requirements for online sales.

The FDA also proposes a ban on menthol cigarettes, which, although finalizing and enforcing the law may take up to two years, would be a blow for BAT. She sells Newport, one of the most popular menthol brands in the United States, through the intermediary of her subsidiary Reynolds American, which she has bought back as a result of a contract. Lorillard's purchase of 25 billion dollars (19.5 billion pounds sterling) in 2015.

Electronic cigarette products with flavors of mint, menthol and tobacco will still be sold in US retail stores for the moment because US officials did not want to create a situation in which cigarettes were more appealing to consumers. smokers who preferred a mint or menthol flavor.

In 2013, the FDA concluded that menthol cigarettes were harder to stop and posed a greater health risk than regular cigarettes.

Last week, Imperial Brands general manager Alison Cooper told investors that the company was targeting ambitious growth plans focused on "next generation products". he owns the brand blu e-cigarette.

In June, voters in San Francisco approved a proposal to ban the sale of flavored tobacco products, including menthol cigarettes, in a battle in which the tobacco company RJ Reynolds, a subsidiary of Reynolds American , paid $ 12 million under this measure.

Last year, BAT re-entered the US market after a 12-year absence with the acquisition of $ 47 billion from Reynolds, owner of brands such as Pall Mall, Newport and Camel, as part of creating the most big tobacco company of the world. development of electronic cigarettes and vapes.