Marlboro cigarettes, a product of Philip Morris International
Daniel Acker | Bloomberg | Getty Images
Tobacco stocks fell on Monday on a report that the Biden administration plans to cap nicotine levels in cigarettes.
The report, which cited people close to the subject, was published in the the Wall Street newspaper. The newspaper said the discussion took place as officials approached a deadline to say whether or not they plan to push for a ban on menthol cigarettes.
The Biden administration is trying to determine whether it should reduce nicotine levels in conjunction with a menthol ban or as a separate policy, people told the Journal.
Nicotine doesn’t cause cancer, but it makes smoking more addictive. The goal of reducing nicotine levels would be to make cigarettes less addictive, in the hopes of getting smokers to quit or switch to other products considered safer.
The Food and Drug Administration, which exercises regulatory oversight over tobacco, declined to comment on the report.
“Any action taken by the FDA must be based on science and evidence and must take into account the real consequences of such actions, including the growth of an illicit market and the impact on hundreds of thousands of jobs,” from farm to local stores across the country, ”Altria spokesperson George Parman told CNBC.
Altria stock closed more than 6% lower on the report. In extended trading on Monday, stocks fell a further 2%.
Shares of British American Tobacco closed down 2% on Monday, while shares of Philip Morris International ended the day down more than 1%. Both stocks were also down after the market closed.
Philip Morris International declined to comment on this issue. The tobacco company does not sell or market cigarettes in the United States, but its stock still fell on the news.
British American Tobacco did not immediately respond to a request for comment. The company owns Reynolds American, the maker of Camel cigarettes.
“Many consumers mistakenly believe that a very low nicotine cigarette is less risky than traditional cigarettes, a misconception that poses a major obstacle in determining the proposed regulations for low nicotine cigarettes”, Reynolds US spokesperson Kaelan Hollon said in an email.