FDA Ruling Threatens Cigar Industry

FDA Ruling Threatens Cigar Industry

The Food and Drug Administration announced this morning tough new regulations on the entire U.S. tobacco industry, including the segment that makes and markets premium, handmade cigars.

Despite previous hopes, the premium cigar industry did not get the exemption it—and thousands of cigar lovers across the United States—had lobbied for. The FDA chose Option One, the tougher of the two routes, casting aside any exemption for premium cigars.

If left unchecked, the rulings issued today would take effect in 90 days, or August 8, 2016. The premium cigar industry is preparing a legal response to challenge the FDA ruling.

The ruling includes:

• Establishing a federally mandated minimum of 18 years for the purchase of any tobacco product, including sales made online, and age verification made by photo ID.

• The banning of free tobacco samples.

• The requirement of products released after February 15, 2007 to be verified by the FDA before going to market.

In a conference call to the media early this afternoon, Mitch Zeller, J.D., Director, Center for Tobacco Products for the FDA, said the FDA intended to also target flavored cigars, including flavored premium cigars.

The FDA has said this new product verification will be done "under staggered timelines, the FDA expects that manufacturers will continue selling their products for up to two years while they submit—and an additional year while the FDA reviews—a new tobacco product application. The FDA will issue an order granting marketing authorization where appropriate; otherwise, the product will face FDA enforcement."

This last item has been the one most feared by premium cigarmakers. In an industry where new products are an important part of the market, product verification and government approval prior to release would radically slow the process of getting new product to store shelves, as well as adding to the cost of business.

The FDA confirmed that all required applications could “cost hundreds of thousands of dollars” per application. "It's an average and there's a range," said a representative from the FDA during the conference call.

This ruling comes a little more than two months prior to the industry's biggest trade show, the International Premium Cigar & Pipe Retailers trade show, taking place in Las Vegas, in which cigar samples are an integral part.

Premium, handmade cigars account for roughly 315 million units a year in the United States, a mere fraction of the nearly 12 billion cigars sold annually in America, the vast majority of which are made by machine.

"We are deeply disappointed that the Food and Drug Administration has decided to regulate premium cigars," said Eric and Bobby Newman, owners of the J.C. Newman Cigar Co. of Tampa, Florida, in a joint statement. "The premium cigar industry is made up of dozens of small, family-owned cigarmakers, like us, along with thousands of small, independent specialty cigar stores across the country. The cost and burdens of onerous regulations threaten the entire industry. We are closely studying the 499 pages of regulations that the FDA issued this morning and are hopeful that we can find a way to save our historic cigar factory in Tampa."

"The FDA's regulation of premium cigars, if left unchecked, would have a devastating impact on retailers and manufacturers alike," said Mark Pursell, CEO of the International Premium Cigar & Pipe Retailers Association. "Fortunately, the industry's legislative strategy continues to be implemented, including language recently adopted by the Appropriations Agricultural Subcommittee disallowing any funding of FDA regulation of premium cigars and negating the arbitrary predicate date of February 2007, after which any tobacco product would be considered new, and have to go through an expensive and time consuming compliance process. Bills H.R. 662 and S. 441, exempting premium cigars and pipe tobacco, continue to gain co-sponsors as we pursue a legislative solution to unneeded and harmful government intrusion."

Said Hans-Kristian Hoejsgaard, chief executive officer of Oettinger Davidoff AG, owner of Davidoff and other cigar brands: "We are very disappointed to note that the FDA seems to have ignored the compelling logic to treat premium cigars differently from cigarettes, and to also have further harmed the premium cigar category by requiring a predicate date that goes back over 10 years."

While the FDA's ruling is certainly harsh on the industry, it's not clear if this will become law. And the Cigar Rights of America is preparing to fight against the FDA.

"We're going to be totally concentrating our efforts on a two-front war right now. One is advancing the legislation that was adopted by the House Appropriations Committee, which calls for an exemption on premium and large cigars, and getting that through the full House of Representatives and adopted by the Senate, which probably won't happen until after this year," said J. Glynn Loope, executive director of the Cigar Rights of America. "Secondly, we're going to be evaluating immediately all of our legal options for litigation. We spent a lot of the last six weeks interviewing law firms for just such a contingency."

During the FDA's official media conference call, it was made clear that Congress still has the power to enact the previous riders proposed by the House Appropriations Committee last month. The two riders would cut funding for the FDA to regulate premium cigars and push the predicate date from February 15, 2007 to 2016. The FDA vehemently opposes these riders.

"If the rider were to be enacted, it would have an enormous impact on public health," said a representative from the FDA during the conference call.

Check back to CigarAficionado.com as we will continue reporting on this developing story as new information comes forward.

For more, read FDA And Cigar Regulation—How Did We Get Here?

[Update: FDA comments and quotations were added after this afternoon's media conference call.]




"I'm not happy about premium cigars being classified with the massive machine made cigar industry which is what the FDA should be focusing on, but on the other hand the Premium Cigar Industry does need some type of oversight and if not done in house this is what can happen. There is a constant bloat of "new" cigars and boutiques which have slowly inched up the cost of cigars to a level that makes the cost/enjoyment ratio questionable. " —May 25, 2016 19:34 PM
"Few things These Ass holes cannot go around but I this crap is to make a hell of a taxes and tons of fees to pay if you planing to to business in tobacco industry. Few ...always it is about few. They will make it semi legal....and the ones with real deep pocket will do business and other as before try to smuggle few smokes....so same story...police and police and police...they all make money ...sad ...yes it is sad....but story never changes " —May 12, 2016 20:38 PM
"32 comments? This is looking like the CA record break thread. Good stuff!" —May 12, 2016 17:48 PM
""this falls on the shoulders of those Certain Authoritarian Conservatives" How do you figure? The law was initiated by Waxman and Kennedy, both liberal Democrats. Passed by the 110th (230 Dem., 96 Repub.) then the 111th in the Senate (54 Dem., 23 Repub.). Then it was signed into law by Democratic president Barack Obama. Bush threatened to veto the bill if it ever came to his desk. So, you have a law initiated by Democrats, passed through the House and Senate by majority Democratic vote and then signed into law by a Democrat president, yet this falls on the shoulders of conservatives? What a bizarre thing to say." —May 12, 2016 09:50 AM
" @matt hill: Obama signed the FDA act into law back in '09. He had plenty to do with this. See the timeline: http://www.cigaraficionado.com/webfeatures/show/id/fda-and-cigar-regulation-how-did-we-get-here-18796" —May 11, 2016 17:48 PM
"I have a problem with those Of you that blame the current Administration, this falls on the shoulders of those Certain Authoritarian Conservatives, these people are the Ones that want to Regulate every aspect of our lives, but not be held accountable for Their Own, I have been a Cigar lover for over 20 years and it is only now that they FDA wants to regulate this this sounds very familiar of what Conservatives have done during the Prohibition times, I for one will fight along with others to get this Atrocity known as the FDA to stop these asinine regulations on Premium Cigars, Frankly they are overstepping their bounds and I will not Tolerate it, tobacco Products should be under the ATF hell Tobacco is their middle name. lets stop Pointing Fingers here and get together and fight this kind of Authoritarian views out of our everyday Lives and enjoy a great stick." —May 11, 2016 14:56 PM
"@matt hill: Obama signed the FDA act into law back in '09. He had plenty to do with this. See the timeline: http://www.cigaraficionado.com/webfeatures/show/id/fda-and-cigar-regulation-how-did-we-get-here-18796" —May 11, 2016 13:04 PM
"@jerodmason: "Why is everyone complaining?" Because every cigar maker is going to have to pay out of their own pockets for FDA testing. That's hundreds of thousands of out-of-pocket dollars per brand just for the FDA to look at their cigars. Some smaller brands don’t even net that much in profits. Know what that means? Brands get wiped out, leaving only the pre-2007 cigar lines, or the companies who can afford testing." —May 11, 2016 11:48 AM
"@matt hill: Obama signed the FDA act into law back in '09. He had plenty to do with this. See the timeline: http://www.cigaraficionado.com/webfeatures/show/id/fda-and-cigar-regulation-how-did-we-get-here-18796" —May 11, 2016 11:26 AM
"I still don't get why everyone is complaining? I love cigars but I'm naive enough to deny that they aren't a toxic product. What's wrong with regulation? Maybe we'll finally find out what asbestos laced lead paint chips Drew Estate puts on their acid cigars to make them taste so good? " —May 11, 2016 05:41 AM
"With all the foreign items coming in this country that we consume evereyday that are TOXIC to us all,,these FOOLS are worried about cigars?? the FDA needs to realllly do their jobs and maybe restrict all the DR prescribed drugs that are killing us slowly and all the BAD foreign crap(consumable) that is sold to us in dept stores everywhere.im not rich,,i reallly enjoy my $4-$7 cigars,,,i really hope these fools do not end up making us pay $8 for a $2 cigar.how about the FDA getting us all SAFE water and things like that before they ruin a regular guys affordable cigars." —May 11, 2016 02:22 AM
""La muerte es una vida vivida. La vida es una muerte que viene" Big Fish eats the small fish! Enjoy the meal and smile. " —May 10, 2016 23:33 PM
"Already wrote (another) letter to my congresscritters. I should be getting that 'but kids smoking is a National Crisis' form letter any day now. I'll put it with the others. Truth has no effect on these preening idiots. " —May 10, 2016 21:08 PM
""Quit voting in these Communistic politicians who will keep America a Nanny state. You all know this but continued to vote for Obama and his Congress of Cronies." Yeah, except Obama had nothing to do with this. And if you notice, there were plenty of Dem opponents to this measure, and not nearly the amount of opponents one would expect from the Republican side of the aisle. " —May 10, 2016 19:47 PM
"I am going to resist the partisan nonsense. Have people forgotten that BOTH parties consistently whittle away at their liberties? Seriously. One strikes at your financial freedom and personal autonomy, the other grabs at your personal lifestyles and moral choices, combine them both, they make one majestic two-winged vulture. The cigar legislation almost certainly came as a result of prohibition minded nanny state supporters, granted. Not arguing that. Some group or several groups don't like cigars and pushed their addendum through. The irony is that - like some have observed, as Cannabis becomes more accepted and legal, this action is a backwards step for an industry that has existed for centuries with few problems. What many people are not aware of - both Tobacco and Cannabis have anti-cancer properties in their natural state. Tobacco extracts, much like decarboxylated cannabis extracts, can shrink a tumor, and have saved lives. This was old knowledge centuries ago when people turned to plants as medicines. Yet, if you grew a bunch of tobacco in your backyard with the intent to make an extraction and give it to a neighbor who wanted to "last try" it on a terminal cancer, you could have the ATF show up with guns drawn. http://www.ncbi.nlm.nih.gov/pubmed/17501699 The flavor compounds in tobacco are similar to the compounds in cannabis that destroy tumors. https://www.youtube.com/watch?v=DqHassCMX-0 Trust the FDA, and you will almost certainly have a wide selection of little variety, adulterated, partly toxic, but approved because its commercial and had the $$$ to grease the wheel. " —May 7, 2016 10:06 AM
"Hey Mr. Rothstein, Check out the studies done by a group called the National Institute of Health, which has done a number of studies on the link between cigar smoking and cancer. The correlation in nearly every instance, (exception for guys who chain smoke and drink at the same time) is zilch. There was even one study that showed a cigar a day REDUCES cancer. This was oral and pulmonary. So you are not in possession of the facts, only your hatred of tobacco products and love of the nanny state." —May 7, 2016 01:58 AM
"it is a truly amazing thing that a regulatory body that has such a poor track record of protecting and keeping us safe by the testing of drugs and other health items now want to regulate the cigar industry. this is laughable. how bad will they screw it up ??????" —May 7, 2016 01:09 AM
"Pleasure Police strike again. Next they'll come for your single malt, then your football. Anyone having a good time is on their radar. We'll all be sunk when they take away sitting on the beach with feet in sand." —May 6, 2016 18:59 PM
"But, Kevin Rothstein, you go and vote for Hillary -- which is what you're doing when you vote for Jill "no name" Candidate -- and you can expect to see more of your liberties taken away in the future by the same people you continue to vote for, just like what the FDA is doing here. You get the politicians you deserve. You can't have it both ways. Thanks for nothing." —May 6, 2016 18:29 PM
"**** TAKE ACTION, WRITE TO YOUR CONGRESSMAN **** The House Appropriations Bill in question is H. R. 5054. (Agriculture, Rural Development, Food and Drug Administration, and Related Agencies Appropriations Act, 2017). The section that would PREVENT the FDA from enforcing this is Sec. 749. Tell your representative that you SUPPORT this language. " —May 6, 2016 18:24 PM
"Now I know why Drew Estate sold out when they did." —May 6, 2016 18:23 PM
"This is pure and utter BULLSHIT. We are consenting adults enjoying a legal product that those greedy alphabet soup agencies can't keep their noses and hands out of the publics pockets. This will affect all of the cigar events like the Big Smoke in Las Vegas, New York, and all of the other events around the country. Tell the FDA that they need to regulate the anti freeze in tooth paste coming from China, antibiotics in their fish, and a million and a half pounds of rat meat sold here as boneless chicken. You'll get my cigar when it's smoked pass the band and its pried out of my cold dead hands. " —May 6, 2016 16:42 PM
"Edward, we expect business as usual at the Big Smoke. " —May 6, 2016 16:16 PM
"Yea, well I am a liberal, lefty, Democrat who voted for Bernie last month and will vote for Dr. Jill Stein in November and I have to laugh at the ignorant Trump supporters in this forum whining about their "freedom". I don't support the legislation; however, the conceit that cigar smoking is harmless is pure b.s. Man made, global climate change is real; obesity and diabetes are real problems in America; cigarettes are bad for you. When you get sick due to your bad habits you access doctors and hospitals, pushing-up health costs for all. Voting for Trump is a fool's errand. Did the F.D.A. make a mistake with the legislation? Yes. But stop the kvetching. Being fat, drunk and stupid is no way to go through life, my fellow cigar lovers." —May 6, 2016 08:14 AM
"I'm sure this is a whirlwind time for everyone involved at Cigar Aficionado, but I was wondering when there would be an official statement on how this will impact the 2016 Big Smoke. With tickets going on sale in roughly 10 days, I have been counting down until when I can purchase my ticket. I hope my yearly pilgrimage isn't ruined." —May 5, 2016 22:58 PM
"FOFLMAO - but marijuana is growing in acceptance among the states. Put away the golf course stogie and fire up a bong. Tax dollars that go to supporting unwed mothers, supporting other nations, and the continuing wars on police, coal and traditional values. The FDA is smart. They don't venture in to obesity and fast food otherwise they would really tickle the masses. One question - when does General Cigar offer up a deal such as buy now and they will ship your favorite brands to you over the course of your subscription plan. Lock in that inventory now and keep supplied before this kicks in." —May 5, 2016 19:28 PM
"FOFLMAO - but marijuana is growing in acceptance among the states. Put away the golf course stogie and fire up a bong. Tax dollars that go to supporting unwed mothers, supporting other nations, and the continuing wars on police, coal and traditional values. The FDA is smart. They don't venture in to obesity and fast food otherwise they would really tickle the masses. One question - when does General Cigar offer up a deal such as buy now and they will ship your favorite brands to you over the course of your subscription plan. Lock in that inventory now and keep supplied before this kicks in." —May 5, 2016 19:23 PM
"Hey lets just call this what it is. Bullshit!" —May 5, 2016 19:16 PM
"If most every cigar smoking, loving person in this country got on the CRA website, sent the letter that is attached to their representatives. Got to their local brick and mortar store to have a concerted effort to enroll new CRA members, join the shop to the CRA effort, got on the phone, DID SOMETHING! We can bombard Washington with a new outrage and possibly sway some of the laggers sitting in Washington. Don't ask for whom the bell tolls, it tolls for thee. If you wait till the 'other guy " to do something, you are the OTHER GUY! Do something or we are all sunk, once the train starts rolling, it will be more difficult to hit the damn brakes. Lets stop it now! " —May 5, 2016 19:15 PM
"Sounds like a liberal nanny state at its finest! Just think in a couple more years they'll tell us what to wipe our a** with and how to wipe! This regulation is the product of decades of liberal logic, that large government is good government. Well now all the libs that love cigars are seeing the fruits of that thinking. " —May 5, 2016 18:53 PM
"The representative talking about the impact on public health obviously know NOTHING about cigars or how they are meant to be smoked. Somebody should tell them about a man named George Burns " —May 5, 2016 17:10 PM
"You want things to change? Quit voting in these Communistic politicians who will keep America a Nanny state. You all know this but continued to vote for Obama and his Congress of Cronies. Support Trump and this could all change. He's a businessman and he will keep the FDA out of our Cigars. I'm sure he enjoys cigars and he also enjoys making money so I'm pretty sure he won't tax the hell out of the cigar industry. If you don't like him, vote Independant. Vote Democrat and this kind of crap will continue." —May 5, 2016 17:03 PM
"This is another way for the Obama administration to levy a tax without calling it a tax. We,re talking about Cigars here. The FDA needs to tend to their core purpose and not get distracted in over regulations." —May 5, 2016 16:09 PM
"@The Product Poet - unfortunately no, the date of 2007 *is* correct. Its insane." —May 5, 2016 16:06 PM
""Should this be "after February 15, 2017"?" No. The FDA is looking to regulate retroactively. The rider seeks to change this date to August of this year, but the FDA wants to regulate and charge application fees to the last nine years of cigar products. " —May 5, 2016 15:43 PM
"Question regarding the third bullet above: • The requirement of products released after February 15, 2007 to be verified by the FDA before going to market. Should this be "after February 15, 2017"?" —May 5, 2016 15:03 PM
"it is very disappointing that our government continues to impact not only the affordability but the liberty to enjoy a fine cigar. government intervention is the untold huge tax on america. i will work through my congressman and others to hopefully get support for eliminating these devestating new regulations. i think i will contemplate this issue over a great smoke on cinco d mayo" —May 5, 2016 14:59 PM
"I am SO sick of the Nanny State our country is becoming. From telling us what to eat, what to drive, where to live, and how to enjoy our 'free' time. Of course, if the fed passes these horrible tobacco laws, you KNOW they will exempt themselves from any of it. They will continue to enjoy benefits that we could only DREAM of, and never have to adhere to any restrictions placed on we peons. " —May 5, 2016 14:40 PM
"Leave it to the FDA to legislate on a subject which differs from other tobacco products. The real worry is not premium cigars but smokeless tobacco products which while i never used are dangerous more so than premium cigars. Cannot lump together with a broad stroke, or every other vice will come next" —May 5, 2016 14:27 PM