The 1970s slogan “Alive with pleasure” sold the allure of Newport menthol cigarettes to young Americans. Now the catchphrase could hardly sound less apt. The US Food and Drug Administration (FDA) reportedly wants to ban menthol cigarettes. Cue £7bn of market value in British American Tobacco (BAT), owner of the Newport brand, going up in smoke on Monday. As much as a quarter of BAT’s profits are drawn from menthols. That explains why its share price dropped 10%, more than double that of rivals such as Imperial Brands. An FDA ban, if confirmed, would add to the industry’s intensifying regulatory and competitive pressures. BAT’s shares trade on 11 times next year’s earnings, about half the multiple they commanded in 2016. In the short run, the shares might claw back some of their losses. Even if the FDA opts for a ban, it is likely to be some way off. Changing regulations is a lengthy process, requiring debates over scientific evidence. Tobacco companies are likely to sue the FDA, as ...

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