The Associated Press May 14, 2010, 1:03PM ET

Fitch: FDA review poses risk to tobacco industry

The outcome of the Food and Drug Administration's menthol review poses significant risks for tobacco companies, Fitch Ratings reported Friday.

The FDA is developing a report on the risks of menthol flavoring and issuing a recommendation based on its findings. Fitch said that it believes it is difficult to conclude that menthol cigarettes are more harmful than unflavored cigarettes. But the risk for tobacco companies, Fitch said, is that the FDA could give more weight to studies that find menthol cigarettes harmful based on better data collection, study methodology and other factors in those studies.

The outcome, regulations and timeline of enforcement stemming from the review are still uncertain. But Fitch said it poses "significant" risks for companies that sell menthol cigarettes.

Among cigarette makers, Lorillard Inc. was down 47 cents, or 0.6 percent, at $79.18 in afternoon trading Friday. Reynolds American Inc. dipped 24 cents to $53.68. Altria Group Inc. rose 5 cents to $21.69.


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