|
 BAT and Imperial Brands rose between 1% and 2% in morning trading
and were among a handful of gainers on a day most stocks on the
wider FTSE 100 index <.FTSE> were hammered by heightened tensions in
the Middle East.
The U.S. Food and Drug Administration on Thursday said e-cigarette
makers will be banned from selling pod-based e-cigarette flavors,
including fruit, dessert and mint, in the United States from
February.
Public health advocates criticized the new guidelines, saying they
were not stringent enough and that users will still be attracted to
the exempted flavors.
The ban was seen as a watered down version from the one U.S.
President Donald Trump had proposed in September, when he threatened
to remove all e-cigarette flavors from shelves to curb a teenage
vaping epidemic.
Fears of an outright ban led BAT and Imperial to lower their growth
forecasts for their vaping businesses last year.
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"Following a significant period of disruption and uncertainty, this
regulatory clarity is a welcome step towards returning the U.S.
vapor market to stability," BAT, the maker of Lucky Strike, Dunhill
and Vuse e-cigarettes, said on Friday.
Brokerage Jefferies said that while vaping sales would take a
near-term hit from the move, the overall financial impact for BAT
and Imperial would be minimal as most users would switch to menthol
or tobacco, or even higher-margin traditional tobacco products.
"We are actually bullish on implications of this final guidance,"
the brokerage wrote in a note.
Imperial Brands, which sells Blu e-cigarettes in the United States,
was not immediately available to comment on the FDA's move.
(Reporting by Siddharth Cavale and Ankur Banerjee in Bengaluru;
Editing by Saumyadeb Chakrabarty)
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