FDA Seeking “Nationwide Ban” Of Menthol Cigarettes

From Zacks: Earlier this month, the FDA outraged American teenagers by banning flavored nicotine vaping products used with the increasingly popular Juul. 

And while many cynical observers quickly attributed the vape crackdown to heavy lobbying by Big Tobacco, as it turns out, the agency’s crackdown on teenage nicotine use is shaping up to be even broader than many had expected.

According to the Wall Street Journal, the FDA said Thursday that it will seek a “nationwide ban” of menthol cigarettes.

If its successful, this would be a huge blow to the tobacco industry: Menthol-flavored cigarettes account for nearly one-third of the roughly 250 billion cigarettes sold annually in the US, and the industry has a long history of marketing them to minorities.

But wary of the disproportionate impact that a Menthol ban would have on minority smokers, African American leaders like the Rev. Al Sharpton have warned that banning Menthols like the market-leading Newport brand would only create one more illict market that would inevitably give police one more reason to racially profile black people. In the US, 81% of black smokers and 46% of Hispanic smokers prefer menthols, compared with 29% of white smokers. Meanwhile, some 45% of children ages 12 to 17 who smoke say they smoke menthols, according to the data. Among black teens, that figure is 52%.

Other African-American groups like the NAACP have praised the ban, saying it would help improve public health within the black community.

The NAACP and the National Urban League this week said they would support a federal ban on menthols. The FDA’s plan “is long overdue to protect the health of African-Americans and to reduce the deleterious impact of menthol smoking and tobacco use overall on America’s health,” Marjorie Innocent, the NAACP’s senior director of health programs, said Wednesday.

It’s believed that menthols are popular among young people because they mask some of the negative effects of smoking.

“The menthol serves to mask some of the unattractive features of smoking that might otherwise discourage a child from smoking,” FDA Commissioner Scott Gottlieb said in a statement, adding that menthol products “exacerbate troubling disparities in health related to race and socioeconomic status.”

Seeing as the FDA had sought public comment on the safety of menthols and other flavored tobacco products back in March, the ban isn’t all that surprising. Big Tobacco, including British American, Altria and others argued during the hearings that the FDA’s research on menthol use by underaged smokers “suffered from fundamental scientific flaws.”

Though the objections of the tobacco industry and menthol smokers, who insist that a ban would only create a black market, ultimately don’t amount to much. Because a 2009 law said the agency could ban menthols if it could demonstrate that the cigarettes had a negative impact on public health. Around the time that the law was passed, the agency banned spice- and fruit-flavored cigarettes (including popular clove cigarettes) citing their appeal to children. But the FDA left open the question of menthols.

That will soon be settled.

The Consumer Staples Select Sector SPDR ETF (XLP) was trading at $56.23 per share on Friday afternoon, up $0.31 (+0.55%). Year-to-date, XLP has declined -0.60%, versus a 3.19% rise in the benchmark S&P 500 index during the same period.

XLP currently has an ETF Daily News SMART Grade of B (Buy), and is ranked #21 of 41 ETFs in the Consumer-Focused ETFs category.

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