US tobacco stocks fell sharply on Monday following media reports US regulators could announce plans to ban menthol cigarettes as early as this week.
Altria added to Friday’s losses, falling 3.5 percent in early trading before recovering somewhat shortly after 1600 GMT, while Philip Morris International was one percent lower.
The declines followed steep losses in London for British American Tobacco, which lost 10.6 percent, and Imperial Brands, which sank 2.1 percent.
Media reports last week said the US Food and Drug Administration would seek to ban menthol cigarettes while imposing age restrictions and limiting the points of sale for e-cigarettes.
‘Along with cigarette volumes shrinking, regulation is the other inevitable fact of the tobacco industry,’ Nicholas Hyett, an analyst at Hargreaves London, said in a research note.
At 14 percent, the share of US population that smokes tobacco products is at a record low but consumption of e-cigarettes, many available in a variety of flavors, has skyrocketed among the young – alarming parents and health regulators.
Tobacco is the leading cause of preventable death in the United States, killing 480,000 Americans a year. About 16 million Americans suffer from tobacco-related illnesses.