...CHICAGO (S&P Global Ratings) Nov. 16, 2018--S&P Global Ratings said today that the U.S. Food and Drug Administration's (FDA) plan to ban menthol in combustible cigarettes and restrict the sale of flavored e-cigarettes to youths demonstrates the agency's desire to reduce smoking prevalence and initiation. However, the potential effects on Altria Group Inc.'s (A-/Stable/A-1) cash flow and leverage profile are limited over the near term. While in our view the potential menthol ban presents a more serious risk to Altria, it's still not clear that the FDA will be successful with this initiative given the need for scientific evidence supporting its view that menthol cigarettes are more harmful than non-menthol cigarettes, increase smoking initiation, and are harder to quit. Any adverse impact on Altria from such a ban are over two years away, and it is likely some menthol smokers would switch to non-menthol combustible cigarettes or menthol alternatives. Tobacco companies would probably initiate...
