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Shares in menthol tobacco company soar after federal panel’s findings

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A federal panel ruled on Friday that the removal of menthol cigarettes from sale would be beneficial to United States public health, but fell short of recommending such action.

The chairman of the panel, Dr. Jonathan Samet, professor of medicine at the University of Southern California, said there was a scientific basic to support the proposition that menthol cigarettes were more deleterious than regular ones. The risk, the panel said, was not that menthol smokers had an increased risk of disease, but that menthol cigarettes made smoking more attractive because the flavor is less harsh.

Two tobacco companies filed suit last month in an attempt to block the panel or oblige the FDA to ignore its advice, claiming that three of the panel’s eight members had performed consulting or legal work against tobacco companies.

Euromonitor International estimates that 27 percent of the $80bn US cigarette market is for menthol cigarettes. Menthol smokers are disproportionately African-American, younger, or on lower incomes.
Menthol was initially added to cigarettes in the 1920s to improve their flavor. In 2009, Congress passed a law prohibiting flavorings of spice, fruit, or candy, but left the thorny issue of menthol to the FDA. The FDA will now review the panel’s findings and perform its own research.

MF Global Holdings analyst Mark McMinimy said he thought it”very unlikely” that the FDA would place a ban on menthol cigarettes. The Lorillard Tobacco company of Greensboro, NC derives 85 percent of its revenue from its Newport brand of menthol cigarettes. On Friday its stock closed at $87.11 after the ruling caused a rise of 10.6 percent.

Professor of the Boston University School of Public Health and tobacco expert Dr. Michael Siegel remarked that this latest episode was a “huge victory” for Lorillard. Lorillard’s principal scientist said that the behavior of black smokers might be caused by genetic or socioeconomic factors.

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