Lorillard Joins Suit Against FDA Cigarette-Label Rule

Date : 08/16/2011 @ 5:58PM
Source : Dow Jones News
Stock : Vector Grp. Ltd. (VGR)
Quote : 20.67  0.0 (0.00%) @ 7:00AM

Lorillard Joins Suit Against FDA Cigarette-Label Rule

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Lorillard Inc. (LO) said it is suing the U.S. Food and Drug Administration to prevent it from forcing the cigarette maker to put graphic warning labels on its products.

The company said it has joined peers Reynolds American Inc.'s (RAI) R.J. Reynolds, Imperial Tobacco Group PLC's (IMT.LN) Commonwealth Brands and Vector Group Ltd.'s (VGR) Liggett in opposing the new regulation, which would require that all cigarette packaging and advertising feature pictures depicting the adverse health effects of smoking by Sept. 22, 2012. The FDA currently only requires text warning labels, though other countries have already adopted visual warnings.

Lorillard, the third largest U.S. cigarette manufacturer by revenue, dominates the market for menthol cigarettes, which remain popular with young adults despite declining smoking rates among the larger U.S. population.

The company on Tuesday called the labels an unconstitutional way of forcing tobacco firms to spread the government's anti-smoking message and requested an injunction to delay the rule's implementation.

"The notion that the government can require those who manufacture a lawful product to emblazon half of its package with pictures and words admittedly drafted to persuade the public not to purchase that product cannot withstand constitutional scrutiny," Lorillard attorney Floyd Abrams said.

Lorillard shares were recently up 0.5% at $105.65 after hours. The stock has gained 41% over the past year through the close.

-By Drew FitzGerald, Dow Jones Newswires; 212-416-2909; andrew.fitzgerald@dowjones.com

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