trending Market Intelligence /marketintelligence/en/news-insights/trending/gDeE6lvz5T6Bq0kT1Eei9w2 content
Log in to other products

Login to Market Intelligence Platform

 /


Looking for more?

Contact Us

Request a Demo

You're one step closer to unlocking our suite of comprehensive and robust tools.

Fill out the form so we can connect you to the right person.

If your company has a current subscription with S&P Global Market Intelligence, you can register as a new user for access to the platform(s) covered by your license at Market Intelligence platform or S&P Capital IQ.

  • First Name*
  • Last Name*
  • Business Email *
  • Phone *
  • Company Name *
  • City *
  • We generated a verification code for you

  • Enter verification Code here*

* Required

In This List

FDA proposes adding graphic warnings to cigarette packs

S&P Global Market Intelligence

Cannabis: Hashing Out a Budding Industry

Segment

IFRS 9 Impairment How It Impacts Your Corporation And How We Can Help

The Market Intelligence Platform


FDA proposes adding graphic warnings to cigarette packs

The U.S. Food and Drug Administration has proposed a rule that would require graphic warnings to adorn cigarette packages and advertisements.

Announced Aug. 15, the 13 proposed warnings feature photo-realistic color images depicting some of the lesser-known but serious health risks of smoking, such as bladder cancer and erectile dysfunction. These warnings would "represent the most significant change to cigarette labels in more than 35 years," the FDA said in a press release.

The FDA's goal is to promote greater public understanding of the negative health consequences of smoking, the agency said. The images would accompany the statements that already appear on cigarette packages and ads in the U.S.

The health warnings would cover the top half of the front and rear panels of cigarette packs and at least 20% of the top of cigarette ads. The proposed rule will be open for public comments for 60 days through Oct. 15. When finalized, it would fulfill a requirement of the Family Smoking Prevention and Tobacco Control Act.

In 2012, the tobacco industry defeated an attempt to implement a similar rule on the grounds that it violated the First Amendment. In March, a judge in the U.S. District Court for the District of Massachusetts directed the FDA to publish a new proposed rule by August and issue a final rule in March 2020. The judge's order came after several public health groups filed a lawsuit.

The proposed images include a sickly looking child next to the phrase, "Tobacco smoke can harm your children." Another shows a man with a large scar down his chest beside text that reads, "Smoking can cause heart disease and strokes by clogging arteries."

SNL Image

The FDA on Aug. 15 proposed new rules for cigarette-makers that would require larger and more graphic warnings on packs.

Source: FDA

Large graphic warnings are better than text-only warnings when it comes to capturing people's attention and getting them to think about quitting smoking, Gary Giovino, SUNY distinguished professor of community health and health behavior at the University at Buffalo, said in an interview with S&P Global Market Intelligence. Text-only warnings can be easy to miss depending on their placement and size, Giovino said.

Still, it is unclear what impact the proposed warning labels would have on U.S. cigarette consumption, Bonnie Herzog of Wells Fargo said in a research note. Similar labels have existed for a few years in Australia and the U.K. and have not necessarily had a material negative impact on cigarette volumes, she said. The tobacco industry can litigate the proposed rule and is expected to do so, Herzog said.

"We believe this is yet again another manageable risk for the industry and as such, we see limited downside risk to tobacco stocks," Herzog said.

Altria Group Inc. spokesman David Sutton said in an email to Market Intelligence that the cigarette manufacturer's approach to the proposed rule will be "constructive."

"We will carefully review the proposed rule and its implications to our businesses and submit comments," Sutton said.

British American Tobacco PLC-owned Reynolds American spokesperson Kaelan Hollon said in an email to Market Intelligence that the company "firmly" supports public awareness of the harms from smoking.

"But the manner in which those messages are delivered to the public cannot run afoul of the First Amendment protections that apply to all speakers, including cigarette manufacturers," Hollon said.

A spokesperson for Vector Group Ltd. declined to comment.

The FDA's gambit on graphic warnings comes as the cigarette industry faces shrinking sales volumes and pressure to innovate with different kinds of products and investments.

A World Health Organization report in July on what it called the "global tobacco epidemic" said that while countries have made progress, many are not adequately implementing policies that can help save lives from tobacco.

Philip Morris International Inc. issued a press release blasting the WHO report for failing smokers by not acknowledging "the robust science and innovation behind alternatives to smoking cigarettes."