News

Morgan Stanley Predicts FDA Proposal To Limit Nicotine Could Cut Profits In Half

The firm believes smoking could decline to zero with regulations

Profits for major U.S. tobacco companies could be cut in half if the Food and Drug Administration adopts a “maximum nicotine” rule within the next 15 years, according to analysts at Morgan Stanley.

The FDA is set to publish in October its proposed rule regulating the amount of nicotine allowed in cigarettes and other tobacco products “so that they are minimally addictive,” according to the agency. The rule, if adopted, “would have significant public health benefits” and “potentially vast economic benefits,” the FDA said.

The regulation, if adopted by 2035, would also cost the industry roughly $165 billion in lost profits, Morgan Stanley analysts wrote in a research report Sunday.

“Reducing nicotine in cigarettes to non-addictive or minimally addictive levels, in our view, would be a potential game changer for the U.S. industry,” the analysts wrote. Morgan Stanley has rated the stock of Imperial Brands and Marlboro-maker Altria as underweight, which is effective a sell recommendation, and downgraded British American Tobacco to underweight.


To Read The Rest Of This Article On CNBC, Click Here

Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

CHAMPS Smoke Shop Report, or ‘CSS’, online source for the updates and innovations on the smoke shop scene. News and information are geared strictly to accessories retail channels, with distribution limited to retailers that Smoke Shop products and wholesalers.

Newsletter

Stay informed with the most up-to-date industry news to help you grow your business: subscribe to our newsletter below!




Copyright © 2019 CHAMPS Smoke Shop Report. Terms & Conditions | Privacy Policy

To Top