Source: Sharecast
The US Food and Drug Administration issued marketing denial orders to RJ Reynolds Vapor Company, which is owned by BAT, for six flavoured e-cigarette products sold under the Vuse Alto brand.
The orders means the company may no longer market or distribute any of the products - three of which are menthol flavoured and three mixed-berry - in the US.
The regulator said having reviewed the evidence supplied by RJ Reynolds in its premarket tobacco production applications (PMTAs), it did not believe that either the menthol and berry-flavoured vapes provided enough benefit to smokers to outweigh the "known risks" to youth.
Matthew Farrelly, director of the FDA’s Centre for Tobacco Product’s Office of Science, said: "If an application contained sufficient evidence to meet the necessary public health standard, including a non-tobacco flavoured product, we’d authorise the product. But such evidence was lacking in this case."
As at 1030 BST, BAT’s London-listed shares were down 3% at 2,455.3p.
In a statement, BAT said: "RJ Reynolds Vapor intends to challenge denials, and will seek a stay of enforcement of menthol denial immediately." Companies may submit new PMTAs for products that are subject to marketing denial orders.
Vuse is the most commonly sold e-cigarette brand in the US, the FDA noted. Vuse Alto makes up the majority of BAT’s vape volumes in the country, where menthol flavours are particularly popular.
Russ Mould, investment director at AJ Bell, said: "Vaping and e-cigarettes - so-called next generation products - were the industry’s and BAT’s answer to increasingly tight restrictions on the sale of cigarettes.
"If regulators start clamping down hard in these new areas too, it will raise questions about the sustainability of the business in the decades to come."
BAT, which owns Lucky Strike and Rothmans, acquired American rival RJ Reynolds in 2017 in a $49bn deal.