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Cigar Industry

The Day Congress Listened to Cigarmakers

| By David Savona , Marvin R. Shanken | From Paul Giamatti, May/June 2019
The Day Congress  Listened to Cigarmakers
Photo/David Yellen

On April 5, members of the United States Congress came to Ybor City, Florida, to hear the plight of the premium cigar industry. Sen. Marco Rubio (R-FL), the Chairman of the Senate Committee on Small Business and Entrepreneurship, led a field hearing called “Keeping Small, Premium Cigar Businesses Rolling.” Joining him were Reps. Kathy Castor (D-FL-14) and Rep. Gus Bilirakis (R-FL-12).

It was the first time Congress had held a hearing dedicated to handmade, premium cigars. It was about time.

Congress needs to take action and finally realize the terrible card that has been dealt to the handmade cigar industry. When the Obama administration put the U.S. tobacco industry under the control of the Food and Drug Administration in 2009, it led to overarching and unnecessary government oversight of the handmade cigar industry. This is a small business segment. In a good year, some 300 million or so handmade cigars are sold, compared with around 13 billion mass-market smokes. Handmade cigars have no reason to be overseen by the FDA, a government agency that has far more important things to focus on.

Under FDA guidelines, cigar companies are forced to operate as if they were wearing shackles. Creating new products? Difficult and expensive. Innovation? Next to impossible. And forget it if you’re an entrepreneur who wishes to create a new brand. Government fees alone could cost you an estimated quarter-million dollars before you sold your first $10 cigar.

The intent of all these new rules was to keep tobacco out of the hands of children. While we firmly believe that minors should not be allowed to smoke or purchase cigars, we also know that the handmade cigar industry needs no policing to achieve that goal. Children are already discouraged from handmade cigars by their price and their lack of availability, as most are sold in brick-and-mortar shops where children are not welcome. Even the data from the FDA itself confirms this, as a 2017 study published in the New England Journal of Medicine found that very few children in America have ever smoked a premium cigar.

When uninformed politicians target cigarette smoking with scattershot legislation, cigars get caught in the crossfire. The lawmakers don’t seem to care that when they aim their guns at big tobacco, they unwittingly harm the many small and family-owned companies that make up so much of the handmade cigar business.

Speaking on behalf of the cigar industry in April were cigar retailer Jeff Borysiewicz, owner of Corona Cigar Co., and Drew Newman, part of the family that owns Tampa’s J.C. Newman Cigar Co., which has been selling cigars for 124 years.

“The greatest threat to my business is the heavy hand of government regulations being pushed forward by the FDA,” said Borysiewicz, who called the premium cigar business one “that can get squeezed out of business very easily.”

Newman compared premium cigars to fine wines. “None of this is standardized—it’s an art, a tradition that’s been passed down from generation to generation to generation,” he said.

Sen. Rubio is that rare lawmaker who seems to understand; cigars—he gets it. “If this goes into effect, there are not going to be many premium cigar manufacturers left,” Rubio said during the hearing. The senator asked the panelists if premium cigars could end up being a “contraband product” with unchecked FDA regulation. Newman said it was a possibility, saying the government could “squash this industry like a bug…It’s what keeps us up at night, and worries us. We urgently need relief.”

We applaud Sen. Rubio for his efforts to protect the handmade cigar industry from FDA regulation. Now it’s time for his colleagues in Congress to follow along and give the handmade cigar industry the protection from FDA regulation that it absolutely needs.

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