In a move aiming to curb youth vaping and address health risks, the U.S. Food and Drug Administration (FDA) ordered R.J. Reynolds to stop the sale of its Vuse Alto menthol e-cigarettes on Friday. This directive has led to a court challenge from British American Tobacco (NYSE:BTI), the parent company of Reynolds. However, this order will not affect the sales of Reynolds' tobacco-flavored products.
The FDA is also expected to impose a ban on all menthol cigarettes, including Newports, which generate annual sales of $7.5 billion. Despite these bans, manufacturers like Juul will be permitted to continue selling their products during litigation.
According to data from Goldman Sachs, menthol vapes account for 29% ($1.6 billion) of the U.S. e-cigarette market, with Vuse products making up 40% of that segment. It was noted that Vuse vapes are particularly popular among middle and high school students.
In response to the FDA's decision, The Campaign for Tobacco-Free Kids expressed support, while Reynolds challenged California's recent ban on flavored tobacco. Reynolds criticized the FDA for permitting vapor products with youth-appealing flavors like Cotton Candy and Peanut Butter Cookie to remain on sale.
Previously, Reynolds voluntarily halted the sale of its mixed berry flavor. Dr. Alex Liber suggested that bans on flavored-vape could potentially lead to an increase in cigarette sales in a market already saturated with illicit products.
British American Tobacco emphasized its commitment to the rule of law in regulated markets and criticized the proliferation of youth-appealing flavors in the industry. Meanwhile, California's state attorney general issued a warning against cooling flavor products amidst the ongoing youth e-cigarette crisis.
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