Shares of U.S.-listed big tobacco companies are all expected to open lower Tuesday, according to overnight trading data, after taking a hammering Monday on news of possible changes to the country's nicotine level caps for cigarettes.
Shares of Altria Group Inc. are expected to open Tuesday in New York down 1.22% at $48.48 after falling 6.17% a day earlier to $49.08 each. Philip Morris International Inc. shares will hear the bell 0.065% off at $91.61 - they closed behind 1.33% Monday at $91.67 a share. Philip Morris doesn't sell or market cigarettes in the U.S. but its stock still fell on the news. British American Tobacco PLC paper will welcome Tuesday 0.58% lower at $39.38 after ending April 19 trade at $39.61 - or a 2.19% fall.
The government is considering changing tobacco regulations - including a reduction in nicotine level caps and a nationwide ban on menthol cigarettes, sources familiar with the matter say.
A report published by The Wall Street Journal said officials were discussing the possible changes ahead of a deadline for a decision on whether to impose a national ban on menthol cigarettes.
The sources cited by the report said officials were trying to determine whether the nicotine cap reduction would be implemented in conjunction with the menthol cigarette ban - or as a separate policy. The same sources said the government was aiming to reduce cigarette use by reducing nicotine contents.
While nicotine may not be as harmful to the body as other substances, it does make smoking cigarettes addictive. The sources said lowering cigarette nicotine content may help some smokers quit the habit - or encourage them to switch to safer products.
Altria - one of the world's largest producers of tobacco and the parent company of Philip Morris USA - reacted to the proposals saying it would be detrimental because it would result in job losses and encourage illegal trade.
"Any action that the Food and Drug Administration takes must be based on science and evidence and must consider the real-world consequences of such actions - including the growth of an illicit market and the impact on hundreds of thousands of jobs from the farm to local stores across the country," Altria representative George Parman said in a statement.
