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Cigarette makers sink after the FDA says menthol in cigarettes appears to pose a greater health...

Cigarette makers sink after the FDA says menthol in cigarettes appears to pose a greater health threat than regular cigarettes and indicates it plans to issue rules based on its findings. The agency says menthol could make young people more likely to smoke by reducing the irritation and harshness of cigarette smoke. Menthol comprises ~30% of the cigarette market. LO -4.2%, RAI -2.6%, MO -2.5%.
Comments (16)
  • This is bad news for LO. They are VERY reliant on Newport for revenues.
    23 Jul 2013, 12:11 PM Reply Like
  • I'm viewing this as a buying opportunity for LO. The report admits that menthol cigarettes are no more harmful than regular. Anything short of banning menthol cigarettes, which seems hard to justify, is just a speedbump. I don't see how this resonates with LO's customers.

     

    Just an opinion, but Buffett's "Be greedy when others are fearful" line seems appropriate here.
    23 Jul 2013, 12:26 PM Reply Like
  • The issue is the idiotic Law that they passed in 2009 that said that the FDA should regulate on the basis of: harm (ie what you're refering to, is menthol actually more dangerous) AND/OR incidence/cessation. The law continued it's inanity with a particular requirement to "protect" minorities. It is THESE parts of the law that the FDA will use.

     

    If Zeller goes hard on this, there is going to be the mother of all court cases. All the so called science on "Patterns of Use", Incidence and Cessation seems utterly retarded to me. More poor, female, minorities use menthol...so what?!...surely that's just peer pressure effects. We're all rich lets smoke dunhills and drink wine. We're all poor lets smoke new ports and drink beer. Social units are attached to certain brands. Every consumer category is like this. There isn't a scrap of evidence that menthol CAUSES africans, poor, women, east-coasters to smoke.

     

    I can't begin to say how retarded I find reading the FDA's so called scientific findings on menthol. Simply unbelievable. That being said the fault is with the original law which is simply begging for litigation should it be acted upon by Zeller.
    23 Jul 2013, 12:38 PM Reply Like
  • In the end, eCigs are coming, and in general, the sector will be just fine. Panic selling is happy buying for me. Long MO.
    23 Jul 2013, 12:23 PM Reply Like
  • Don't see panic selling today. Selling...yes...but no tobacco run. One needs to remember that ANYTHING the government touches turns to crap. D.C. is a cesspool with no drainage
    23 Jul 2013, 12:47 PM Reply Like
  • Let them panic away- gonna load up more MO end of day and may do some LO as well. Well said regarding D.C.-(oops, i am on a list now)- and we threw our retirement into that cesspool not to mention our healthcare. Are e-cigs taxed in the same manner a a real cig? If they are not then wait.
    23 Jul 2013, 01:30 PM Reply Like
  • "Are e-cigs taxed in the same manner a a real cig? "

     

    Although they don't contain any tobacco they do contain nicotine. I don't think they are taxed in the US like a normal cigarette. Overseas is different. South Korea has a large tax on them and other countries are looking into the same thing.

     

    They are not regulated in England like a normal cigarette and have been in use for a few years. The US FDA has issued some cautions but no regulations. It's probably too early to know what lawmakers will do. Since they technically are not a tobacco product I can't see them getting taxed that way, but new laws could be passed that somehow include them in the "government protect us" category.
    23 Jul 2013, 01:48 PM Reply Like
  • I just loaded up on LO as well. They own blue e cigs and honestly do you really think anyone smoking menthol cigs really heeds this FDA warning??? Doubt it.
    23 Jul 2013, 01:33 PM Reply Like
  • This isn't panic selling! All LO's done is give up the last month's gains for goodness sakes! Jeez
    23 Jul 2013, 01:43 PM Reply Like
  • LO dropped 4.5% this morning based on a report that said something could happen...or not. Isn't that what panic selling is? Smaller scale panic is still panic, no?
    23 Jul 2013, 01:50 PM Reply Like
  • baby panic. 4.5% off of it's all time high! hell, you coulda got the same price on LO a couple weeks ago. meh. i remember the days of real panic selling over things like MSA, Engle.
    23 Jul 2013, 02:02 PM Reply Like
  • OK, just a slight word usage differential, I've gotcha.

     

    I've got new money to spend that I didn't have a few weeks ago. It's not something I'm throwing huge $$$ at, but as far as dips go it's a nice one.
    23 Jul 2013, 02:07 PM Reply Like
  • NO! Knee jerk selling. Panic selling sees LO down into mid thirties. Then I buy.
    23 Jul 2013, 01:57 PM Reply Like
  • I am hoping all of this nonsense results in the price of Philip Morris falling to 82 or lower. Then I will buy more of it.
    23 Jul 2013, 04:04 PM Reply Like
  • At the externality generated to the state health care costs by the use of these products should be higher the tax (Pigovian tax) to correct the loss of money in maintaining the health of these people who consume cigarettes. the debate should not be whether menthol cigarettes are harmful to health, it is logical that all smoking is bad. the debate is how all of society pays the costs of a bad prevention. These items should have a higher selling price due to state tax application ( http://bit.ly/1bKvceb ).
    23 Jul 2013, 05:16 PM Reply Like
  • Can the government / states not look at the billions of dollars cigarettes sale generate? Remember the Florida case in the late 90's regarding the potential BK of MO. They decided to change the law so that every state will get their fare share of the sale taxes generate by tobacco.
    23 Jul 2013, 08:58 PM Reply Like
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