US authorities are considering the move as part of clamp-down on tobacco addiction reported the Wall Street Journal.
The Food and Drug Administration has to make a decision on whether to ban menthol-flavoured cigarettes by 29 April and this has prompted it also to consider lowering nicotine levels to a level where it is no longer addictive.
Nicotine itself is not considered harmful, but most people take it by smoking which causes cancer, heart disease and lung-related illnesses such as COPD.
Around 480,000 deaths in the US a year are linked to smoking, said the report.
Menthol-flavoured cigarettes are popular among young people as they reduce irritation in the throat but are seen as the start towards a normal smoking habit. The UK banned menthol cigarettes a year ago.
Tobacco giant Philip Morris owner Altria Inc responded: “Any action that the FDA takes must be based on science and evidence and must consider the real-world consequences of such actions, including the growth of an illicit market and the impact on hundreds of thousands of jobs from the farm to local stores across the country”.
Another tobacco group, Reynolds American, said the scientific case for nicotine reduction is inconclusive and that “there are better tools for improving public health.”
The FDA has published research that indicates that where nicotine is reduced, smokers will quit or use alternatives such as e-cigarettes or gum.
Neil Wilson at markets.com added: “Lower nicotine cigarettes may be less addictive – so the rationale is that this would make it easier for smokers to quit or switch to other ‘safer’ products and therefore be a ‘good thing’.
“However, consumers may be tended to perceive lower nicotine cigarettes as safer, which could make them easier to sell, which would be the precise opposite of what the administration intends.
“A ban on menthol cigarettes is a much more straightforward policy. “
Shares in BAT dropped 6.2% to 2,733p while Imperial fell 5.3% to 1,498p.