Menthol escapes FDA ban
Brenda Wisehart smokes a menthol cigarette in front of a Quick Stop store on March 30, 2010 in Miami, Florida.
Jeremy Hobson: Today the FDA gets a final report about the safety of menthol cigarettes. The report is expected to give companies like Lorillard -- which makes Newports -- some welcome news.
Marketplace's Jennifer Collins reports.
Jennifer Collins: Newport has been the menthol cigarette brand for decades.
Newport commercial: Newport tastes fresher. Tastes better too.
A scientific advisory panel has studied whether that better taste makes menthols more addictive and thus more harmful. The panel's draft report says menthols are certainly harmful, but it didn't forcefully recommend pulling them from the market.
Nik Modi is an analyst with UBS.
Nik Modi: People are becoming even more comfortable with the fact that the FDA will not ban menthol.
Modi says the FDA may not want to strip the $5 billion in tax revenue menthols generate in the U.S. But:
Patrick Hughes: We don't think the companies are out of the woods just yet.
Patrick Hughes is with Height Analytics. He says this report doesn't fully vindicate Lorillard and other menthol cigarette companies.
Hughes: We see FDA facing a very long road with extensive additional research required.
The FDA is expected to issue an update on menthols in the next three months.
I'm Jennifer Collins for Marketplace.