Despite an updated document on regulation, the most draconian rule remains in place: Consumers of premium cigars still cannot receive free samples.
The U.S. Food & Drug Administration has published a new document that clarifies its position on the prohibition of free samples in the premium cigar industry. Called The Prohibition of Distributing Free Samples of Tobacco Products, the document is an update to a draft published earlier this year that explains the FDA’s rules and regulations on free cigar samples.
The FDA’s position on free cigar samples was first outlined in the organization’s Final Deeming Rule, which went into effect on August 8, 2016. The updated, revised document provides more guidance to the cigar industry on the types of cigar samples and promotions that are prohibited—and, most importantly, the types that are still allowed. Recall how first drafts of the Final Deeming document prohibited free samples altogether, (even business-to-business samples from manufacturers to retailers). In January, the FDA relented a bit and released an abridged policy that was less rigid.
In the guidance document published yesterday, the FDA says that adult consumers are still prohibited from receiving free cigars from retailers or manufacturers without buying a tobacco product first. Money must change hands. This means a consumer can enjoy a “buy one get one free at the time of purchase” promotion, but a free cigar sample at no monetary cost to the consumer is not allowed.
The guidance document makes an exception for business-to-business free samples. The FDA states: “FDA does not consider this regulation to apply to businesses distributing free samples in a limited quantity (i.e., no more than necessary to achieve a business or market goal, such as awareness of and exposure to the product for the purposes of product or inventory selection) to another business as part of a genuine effort to sell or market a tobacco product to that business.”
This allows cigarmakers to continue the practice of providing free samples to retailers—a practice considered to be an integral part of the premium cigar industry.
In response to the guidance document published yesterday, J. Glynn Loope, executive director of Cigar Rights of America told Cigar Aficionado: “There was really no great surprise for the premium cigar industry with the issuance of this guidance document on free samples, as that has really been the case since August 8, 2016. It does, however, clarify that free samples exchanged between manufacturers, distributors and retail tobacconists are acceptable.”
The guidance document reiterates that retail tobacconists can still offer membership and rewards programs to their customers, so long as benefits of said program are distributed as part of a sales transaction.
In addition, the free sample ban does not prohibit cigarmakers, distributors and retailers from offering discounts or discount coupons to their customers. However, a coupon that offers a free tobacco product without any tobacco product purchase or monetary payment would be prohibited.
For cigar contests and games of chance, the FDA has similar free sample ban rules. The FDA states that a contest may not offer a free tobacco product as a prize without some sort of sales transaction. Again, the winner has to buy something, though the document is unclear as to whether or not there is a minimum purchase amount. The FDA writes: “The contest prize may not be a tobacco product unless it is distributed as part of a tobacco product sales transaction that requires monetary payment and is subject to minimum age and ID requirements.”
Loope’s organization, Cigar Rights of America—along with two other cigar industry trade groups, Cigar Association of America and the International Premium Cigar & Pipe Retailers Association—is fighting a legal battle against the FDA’s overreaching rules and regulations, which include the ban on free samples. Loope says the ban has a negative impact on consumers and the overall health of the cigar industry.
“Cigar Rights of America has gone on record opposing the ban on free samples to adults of age to enjoy premium handmade cigars,” Loope says. “We also believe the ban on samples complicates cigar events for consumers, hurts the ability of the industry to support cigars for charity functions and causes, infringes upon the ability of manufacturers to introduce new products into the market, and is another example of how FDA regulations inflict economic harm upon the industry. That’s why the U.S. Senate needs to act on the premium cigar exemption in the current U.S. House of Representatives budget … to stop this clear example of bureaucratic overreach.”