Fitch: FDA Review Riskiest for Lorillard

Source from:  The Business Journal of the Greater Triad Area 05/17/2010

Greensboro tobacco company Lorillard Inc. faces the greatest risk in the Food and Drug Administration's review of menthol products, according to a report by Fitch Ratings released Friday. The report said that "Fitch believes it is difficult to conclude that menthol cigarettes are more harmful than unflavored cigarettes. However, risk for tobacco companies lies in the FDA potentially choosing to give more weight to studies that find menthol cigarettes harmful for reasons of better data collection, better study methodology or other factors." Lorillard's Newport brand of menthol cigarettes accounted for more than a third of the overall menthol market and represented 91.5 percent of the company's 2009 revenues, which topped $5.2 billion. "In the worst case scenario, a ban on menthol cigarettes will be financially devastating for the industry, given that they represent almost 30 percent of the market," said Wesley E. Moultrie II, senior director at Fitch. Enditem