The U.S. Food and Drug Administration this month is expected to make its first public statements about whether sales of menthol cigarettes should be restricted.,
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Lorillard is the company most at risk. It makes Newport, the top seller in the menthol category,
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LORILLARD IS FAIRLY SMALL, compared with the rest of the industry, with a $16 billion stock-market value. Though it has the industry's strongest brand and commands the highest prices-per-pack, it is largely undiversified outside of its Newport line, whose core customer base is largely on the East Coast. It recently outlined plans for a major push to extend its Newport franchise into the Western states and to build a nonmenthol brand, Newport Red, as well as a menthol-light brand. Such growth plans typically come at a cost, and could well cut into margins if the company must offer promotional pricing to build volume.
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