PPA & EMA Submit Comments On FDA Proposed Menthol Ban
In July, PPA and EMA submitted comments in opposition to the FDA’s proposed ruling to ban menthol in cigarettes and characterizing flavors of all kinds in cigars.
Not only are these rules not necessary, but by the FDA’s own admission, these rules would inflict substantial economic damage on American small businesses.
The proposed rule is likely to lead to an illicit market and to exacerbate inflation.
Losing these sales to an illicit market would be a serious blow to businesses who are already devastated by inflation, supply backlogs, labor shortages and the declining real wages of their customers.
In addition, the proposed rule would have a cascading effect on PPA member companies who supply fuel to independently owned and operated small business gas stations.
Retailers may have no alternative but to raise gas prices and in-store items to compensate for the loss of revenue due to the menthol/cigar characterizing flavor ban.
However, given the magnitude of the proposed rule, we believe many small retailers would likely be forced out of business due to the loss of operating capital necessary to pay for their next load of fuel.
This would leave wholesale energy marketers with a substantial account receivables amount which would likely put both the wholesaler and retailer out of business and lead to higher prices at the gas pump due to consolidation.