Fitch: FDA's menthol review poses risks to U.S. tobacco companies

Fitch Ratings said the outcome of the Food and Drug Administration's menthol review poses significant risks for U.S. tobacco companies selling menthol cigarettes and potentially considerable risks confront those selling unflavored cigarettes.

The regulations that will result from the FDA's menthol review are uncertain, and the timeline for potential enforcement is unclear. However, the agency said it considers the qualitative substance of these risks in concert with the overall risks of particular credits.

Based on the science as a whole, Fitch believes it is difficult to conclude that menthol cigarettes are more harmful than unflavored cigarettes. However, the 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, the agency said.

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