The major vape brand of British American Tobacco (BAT), Vuse Alto, was prohibited from being sold in the market on Thursday by the US health agency. Of these flavours, the menthol flavour accounts for the majority of sales.
R.J. Reynolds, owned by BAT, is subject to three marketing denial orders (MDOs) from the U.S. Food and Drug Administration (FDA) regarding e-cigarettes. The MDOs cover three flavours: menthol and mixed berry. Each flavour is available in three different nicotine concentrations.
“R.J. Reynolds Vapour company intends to challenge denials and will seek a stay of enforcement of menthol denial immediately,” BAT stated.
According to the FDA, R.J. Reynolds’s research was insufficient to demonstrate that adult cigarette users benefited more from menthol and mixed berry-flavored products than from tobacco-flavored ones, or that the benefits outweighed the acknowledged hazards to children.
However, it stated that the corporation may file fresh applications for the goods covered by these MDOs.
Companies have successfully contested FDA rulings in court in the past.
An Imperial Brands subsidiary had challenged the FDA’s ruling to outlaw its flavoured and unflavored e-cigarette products. In August, a U.S. appeals court decided that the FDA ought to reevaluate its flavourless products.
According to Jefferies, menthol flavours make up about 75% of BAT’s vape volumes in the US, which is primarily composed of Vuse Alto.
Analyst Owen Bennett of Jefferies pointed out that BAT might be able to get a stay, which would stop the product from being taken off the market.
The largest market for these goods in the world has hurt BAT’s company due to the increase of disposable vapes. In the first half of 2023, its vape sales in the US decreased by 6.5%.
After being absent from the lucrative and tightly regulated U.S. market since 2004, BAT acquired R.J. Reynolds for $49.4 billion in 2017.