Marlboro Cigarettes, a product of Philip Morris International
Daniel Acker | Bloomberg | Getty Images
Tobacco stocks tumbled Monday on a report that the government in Biden is considering limiting nicotine levels in cigarettes.
The report, which makes people aware of the matter, was published in the Wall Street Journal. According to the newspaper, the discussion took place when public officials approached a deadline to say whether they intended to ask for a ban on menthol cigarettes or not.
The people of Biden are trying to determine if it should lower nicotine levels along with a ban on menthol or as a separate policy, the people told the Journal.
Nicotine does not cause cancer, but it does make smoking more addictive. The goal of lowering nicotine levels is to make cigarettes less addictive, hoping to entice smokers to quit or switch to other products that are considered safer.
The Food and Drug Administration, which oversees tobacco, declined to comment on the report.
“Any steps the FDA takes should be based on science and evidence and should take into account the real consequences of such actions, including the growth of an illegal market and the impact on hundreds of thousands of jobs from the farm to local shops across the country. Altria spokesman George Parman told CNBC in an email.
Altria’s shares closed up more than 6%. In extended trading on Monday, shares fell 2%.
British American Tobacco shares closed up 2% on Monday, while Philip Morris International’s shares closed up more than 1%. Both stocks were also lower after the market closed.
Philip Morris International declined to comment. The tobacco company does not sell or sell cigarettes in the US, but its stock has fallen despite the news.
British American Tobacco did not immediately respond to a request for comment. The company owns Reynolds American, the manufacturer of Camel cigarettes.
“Many consumers mistakenly believe that a low-nicotine cigarette has a lower risk than traditional cigarettes, a misconception that poses a major obstacle to determining proposed arrangements for low-nicotine-rich cigarettes,” he said. Reynolds U.S. spokesman Kaelan Hollon said in an email.
Read the full story from the Wall Street Journal here.