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Little Cigars Challenged

David Savona
Posted: May 19, 2006
The attorneys general of 40 states petitioned the U.S. government yesterday to change federal regulations on "little cigars." Calling the smokes "cigarettes wrapped in brown paper," the group said it wants the Department of the Treasury's Alcohol Tobacco Tax and Trade Bureau to change the way little cigars are taxed and regulated.

Little cigars are taxed under a different classification from cigarettes and face different restrictions in many states. They are quite popular in the United States. According to numbers provided by the attorneys general, who attributed them to the U.S. Department of Agriculture, 3.8 billion little cigars were smoked in 2005 in the United States, up nearly 1 billion units from 2004.

"The coordinated press releases and the petition by the states show a lack of understanding about little cigars," said Norman F. Sharp, president of the Cigar Association of America. "In addition, the petition filed by the states is misleading in their assertion that the states tax little cigars at a lower rate than cigarettes. In 22 states little cigars are taxed at either rates the same as cigarettes or even higher. In 19 of those states, the rates are higher."

Most little cigars are made by machine using a mixture of chopped tobacco and flavorings, and some have filters, such as the one shown in a photograph supplied by the attorneys general comparing some little cigars to cigarettes and larger cigars.

There is a very small portion of the little-cigar market that is targeted to premium cigar smokers, and these smokes are quite different. They are mini versions of big cigars that are often handmade and typically contain only tobacco and do not have filters.

For more on this story, see Tuesday's Cigar Insider.

Photo Courtesy National Association of Attorneys General

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