Shares in Camel cigarettes maker, British American Tobacco (BAT) fell to their lowest level in over four years on the back of a potential ban on menthol cigarettes in the US, according to the Irish Examiner.
The ban would eliminate products such as Newport, which generates up to a quarter of the company’s profits.
The US is seeking to filter out menthol cigarettes from traditional trading, which the US Food and Drug Administration has been considering doing for some time.
Falling Shares
BAT’s shares dropped 11% at one stage, taking up to €9.6 billion off its market value.
Richard Taylor, an analyst at Morgan Stanley, said that BAT is the “most exposed name to the potential risk”.
It also highlights that despite the move towards vapour and heated-tobacco products, BAT is still heavily reliant on its cigarettes business.
Other tobacco companies like Altria, maker of Malboro, saw their share fall by 1% in New York, while Imperial Brands saw their shares fall by 2% in London.
The move to cut out menthol cigarettes comes as the administration steps up its campaign against youth smoking, which previously saw clove cigarettes taken off the market.
BAT recently revised its expectation on its smoking alternative products, which it said it now expects to make £100 million short of expectations.
© 2018 Checkout – your source for the latest Irish retail news. Article by Aidan O’Sullivan. Click subscribe to sign up for the Checkout print edition.
