Cigar Companies to Pay Higher FDA User Fees this Year

Cigar Companies to Pay Higher FDA User Fees this Year

The U.S. Food and Drug Administration wants more money from the cigar industry. The FDA has released its calculations for user fees that will be collected from cigar companies in fiscal year 2019, and the grand total has increased to $80 million, up from $68 million last year. (Every year the FDA collects user fees from domestic manufacturers and importers of tobacco products and uses the money to fund its ongoing tobacco regulation activities.)  

The FDA collects user fees from six types, or classes, of tobacco companies—domestic manufacturers and importers of cigarettes, snuff, chewing tobacco, roll-your-own tobacco, pipe tobacco and cigars.

The cigar class, which includes handmade cigars as well as machine-made cigars, will pay 11.35 percent ($80 million) of FDA’s total user fee demand for fiscal year 2019. In total, FDA seeks $712 million from all the tobacco classes combined, up from $672 million last year. (For more on how FDA calculates user fees for the cigar class, see FDA User Fees Mean More Costs For Cigar Companies.)

User fees are considered burdensome to cigar companies and drive up the cost of doing business. Higher user fees could potentially force cigar manufacturers and importers to raise their prices to deflect the cost, resulting in more expensive cigars for the consumer.