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FDA to Consider the Impact of Menthol Cigarettes

Menthol cigarettes account for more than one-third of the American cigarette market, and menthol-smoking trend even keeps growing. Public Health advocates claim that the fame of menthol cigaretts particularly among new smokers should be decreased; however, it demands consideration and will lead to negative aftermaths.

Menthol and cigarettes

The latest meeting of the recently-formed Tobacco Products Scientific Advisory Committee, established after the American Food and Drug Administration was authorized to regulate tobacco industry, will be devoted to the health risks related to the consumption of menthol flavoring in tobacco. The meeting is scheduled for March 31 and will be held in Washington, DC.

The Committee will consider and advice to the FDA of the methods of regulating mentholated tobacco products. Menthol is the sole flavor not covered by the Tobacco Control Act, which banned such flavorings as fruit, vanilla and chocolate in cigarettes, however, it could be banned if there is reliable evidence on the risks of its prolonged consumption in cigarettes.

In conformity with a nationwide survey, smokers who took up cigarettes lately are more probably to consume menthol cigarettes than experienced cigarette lovers. Moreover, the number of present smokers who prefer mentholated cigarettes is growing.

According to the survey, the consumption of menthol cigarettes is higher among smokers who began puffing over the last 12 months (44.6 percent) than among experienced smokers (32percent). Also, among smokers who lit up during the last month, the number of those who preferred menthol cigaretes grew up from nearly 31 percent in 2004 to almost 34 percent in 2008. Such growth is the most perceptible among teenage tobacco users (4 percent increase) and among younger adults (from 34 percent to 41 percent).

Eric Broderick, Director of Substance Abuse and Mental Health Services Administration admitted that menthol flavoring may have its appeal in encouraging the smoking habit – one of the most severe problems of public health across the USA. He added that the evident fascination that mentholated cigarettes exert on adolescent smokers is very concerning since menthol tobacco products can lure more teenagers and younger adults to start the hazardous smoking habit.

The research demonstrates that the number of smokers who prefer menthol cigarettes among Black Americans (83 percent) is much higher than among Hispanic populations (32 percent) and White Americans (24 percent) and other populations. Among Black Americans, the experienced smokers were more probably to consume mentholated cigarettes than those who started smoking over the last 12 months, while the opposite behavior is found among other populations.

In addition, there was a considerable increase in the number of male menthol smokers, which went up from 26.9 percent in 2004 to 30.8 percent in 2008.

Menthol flavoring is an ingredient added to cigarettes in order to conceal the harshness of tobacco, by providing a feeling of coolness and freshness during the process of smoking. However, when concealing the harshness, mentholated cigs could ease the way to cigarettes for the adolescents. Several recent studies found out that menthol cigarettes can be harder to give up than the regular flavored ones.

Menthol flavored cigarettes – a temptation for new-coming smokers

The research carried out by the U.S. Substance Abuse and Mental Health Services Administration showed that the usage of menthol cigs is more wide spread among those smokers who started to light up recently (45 percent) than among those who have been smoking for more than 5 years (32 percent).

Camel menthol cigarettes poster

Moreover, the researchers found out that the rate of menthol cigarettes lovers rose from 31 percent, registered 5 years ago to 34 percent of current smokers. This growth was the most dramatic among teenage smokers aged between 15 and 18 (from 43 percent in 2004 to 47 in 2008) and the rate of younger adults who prefer menthol cigarettes also increased from 34 percent four years ago to 41 percent.

Menthol is a flavoring agent of natural origin added to the cigarette content which is used to cover the real strength of cigarettes and providing smokers with a nice “freezing” aftertaste in the mouth. By offsetting the harshness with menthol flavor, the tobacco industry gives teenagers and young adults a gateway for getting hooked on smoking.

According to other studies by various research teams, menthol cigarettes are even more addictive than unflavored cigarettes, and therefore, it is much more difficult to give up smoking for those who prefer them in comparison with those who smoke ordinary cigarettes.

However, Menthol is the only flavoring not covered by the Tobacco Control Act, signed into federal law in June by President Barack Obama, although public health groups call the FDA to include flavored cigarettes in the ban.

SAMHSA lead researcher Christopher Louden, Professor of Public Health said that menthol-flavored cigarettes are able to keep smokers loyal to their deadly habit, and the leading cause of preventable deaths tormenting Americans. He added that evident fascination menthol cigarettes represent to adolescents and younger adults who recently tried smoking is especially concerning because these cigarettes can allure more young people to start smoking.

According to the study, the rate of smokers who prefer menthol cigarettes is the highest among African Americans (82.5 percent) what is significantly higher than among Hispanic smokers (33 percent) and White Americans (24 percent). The study showed an interesting tendency – among long-term African American smokers the overwhelming majority prefers menthol cigarettes, whereas new-comers are more likely to take up ordinary cigarettes, which is opposite to the tendency found among other ethnical groups.

Among other findings of the study is the apparent increase in the rate of male smokers of menthol cigarettes, which rose from 27 percent in 2004 to 31 percent in 2009.

Lorillard stirs investors’ interests

According to several experts Lorillard has become a takeover target for tobacco industry tycoon R.J. Reynolds due to the emerging popularity of its cigarette brands – Newport and Kent. It also has appeared to be a major object of interest since it is a less than expensive stock that might be traded up to 30% higher.

newport-cigarettes

Lorillard Tobacco Company is listed in the Top 20 of the oldest US companies. It is also the oldest cigarette manufacturer in the United States. Lorillard is the third biggest American tobacco company behind Philip Morris and R. J. Reynolds. Although it produces a rather large variety of cigarette brands like Maverick, True, Old Gold, Kent, Satin, and others, the company is world-famous for its leading brand – Newport, which has been the best selling menthol cigarette during two years.

Lorillard Tobacco Company is a bright example of a one-brand company; hence its market value comprises more than $10B. Although it is smaller than main rivals, this company owns an absolutely astonishing net profit margin of over $1B and has no debts. Moreover, the revenues are supposed to reach a 7% raise this year. Despite the Americans tend to give up smoking, Lorillard earned almost 3% more last year in comparison with a 3% decline for the tobacco industry as a whole.

Lorillard best brand Newport makes a 7,8% share of the American cigarettes market, being the number two in the list of best selling cigarette brands behind Philip Morris’s Marlboro.

Many investors consider that Lorillard is heavily underestimated on Wall Street. It is also rumored that R. J. Reynolds has started private negotiations with Carolina Group, the owner of Lorillard, attempting to purchase Lorillard for a much more considerable price than its actual $62/ share. Should Reynolds succeed in their attempt, they would become the largest tobacco company in the world, leaving Imperial Tobacco and Philip Morris International behind them.

However, it is still unclear if a Reynolds/Lorillard merger would be approved by antitrust legislation. Hence, experts remind about the Miller/Coors combo that contributed to the birth of a monopoly at the beer market duopoly but managed to go through the antitrust review.

Peter Edelman, a BNP Paribas expert admitted that Lorillard is the simply the best tobacco company in the world. He stated that it should have an $80 share, since they are simply undervalued by the Wall Street.

According to several other analysts, if Reynolds succeeds in the purchase of Lorillard it would be the most outrageous deals from both financial and strategic points of view.

Yet, there is only one but enormous obstacle, namely the law introduced to the Congress. If the law would be endorsed, the Food and Drug Administration would obtain the right to regulate the cigarette industry. It could lead to imposing a ban on menthol cigarettes. However, this situation seems rather unbelievable since it has been scientifically proven that menthol-flavored cigarettes provide maximum the same health complications as regular-tasted cigarettes.