Major tobacco producers saw their share prices tumble on Friday after US health officials said they would explore ways to cut nicotine levels in cigarettes.

Shares in Altria, which markets brands such as Marlboro and Chesterfield, were down more than 10 percent in New York in afternoon trading, recovering somewhat from a 19 percent plunge earlier in the session.

Vector Group, maker of Pyramid and Liggett Select, was down five percent, while in London British American Tobacco had fallen close to seven percent.

The US Food and Drug Administration said Friday it planned to open a public comment period on possible regulation to reduce the level of nicotine in cigarettes, thereby making them less addictive and reducing disease and death caused by tobacco.

The agency said it also would issue a new enforcement policy for newly-regulated products such as e-cigarettes.

"The overwhelming amount of death and disease attributable to tobacco is caused by addiction to cigarettes -- the only legal consumer product that, when used as intended, will kill half of all long-term users," FDA Commissioner Scott Gottlieb said in a statement.

Tobacco causes the deaths of nearly a half million Americans every year, according to the FDA.

Neil Wilson of ETX Capital said it was "hard to overstate" what falling numbers of addicts and less frequent smoking could mean for corporate revenues.

"This will blow a hole in their earnings and forces a fundamental re-evaluation of earnings," he said in a research note.

The news was not just a concern for the US market, he added.

"We can easily see others, particularly in Europe, where regulatory pressures are already extremely high, following suit."

Altria said it supported the FDA process.

"We think today's announcement is an important evolution in the Agency's approach to regulating tobacco products and a meaningful step forward in developing a comprehensive regulatory policy that acknowledges the continuum of risk," the company said.

"Establishing a standard of any sort is a deliberative process. We intend to be fully engaged throughout this process."

source: AFP