Search results: schip

Stogie News: SCHIP Cigar Tax Increase to be Unveiled Today

13 Jan

[UPDATE: According to the IPCPR, the tax cap will be 40 cents per large cigar. Please click here for their full press release. The tax portions of the bill can be downloaded here (pdf) and the full bill can be downloaded here (285 page pdf).]

Well, it looks like today we’ll all finally learn just what the new federal tax will be on cigars. No more speculation and rumor. The facts will be laid out in the bill to reauthorize the 11-year-old State Children’s Health Insurance Program (SCHIP), which is slated for a vote in the House of Representatives Wednesday or Thursday.

Federal budget crunchers were working the numbers Monday, trying to see if everything adds up. Apparently, the increased tax revenue—largely from a cigarette tax boost—isn’t now sufficient to expand and fund a five-year plan. So, there’s consideration of shortening the time frame and coming back again in a few years.

As I write this Monday night, the final SCHIP bill hasn’t been released. It’s anticipated this morning, and the first place you’re likely to find it is on the House Rules Committee site or on Thomas.gov. Groups involved with tobacco, such as the IPCPR and the National Association of Tobacco Outlets, will also be on top of it.

For most of you reading this, the heart of the issue is what happens with large cigars, the category that includes premium sticks. One provision that could have devastated small cigar shops, a floor tax on inventory, has been shelved. And the plan to boost the cap on individual cigars—currently about a nickel—appears also to have been scaled back.

When President Bush vetoed the previous SCHIP bill, the cap was $3. There has been intense lobbying to push it down more. A few weeks ago, a number of reports put the cap proposal at $1. Over the weekend, a couple of retail shop owners told me they’d heard the cap would be 40-45 cents. A GOP staffer on the Hill told Patrick S on Monday that he was hearing cap figures between 39 cents and $1.

Jeff Borysiewicz, an executive at the gigantic Corona Cigar Co. and executive vice president of Cigar Rights of America, said Monday night that even if the tax ends up at the lowest of those ranges, he won’t be satisfied.

“I don’t feel good about what’s happened,” he told me. The group was among those arguing for a percentage tax increase equivalent to the 156.4 percent boost for cigarettes. That would have put the cigar cap between 12 and 13 cents.

Borysiewicz said he’s convinced that a tax even in the 40-cent range will have significant negative repercussions on manufacturers, importers, retailers and customers as it ripples through the market.

As you read the figures in the new bill, bear this in mind: What you see today is almost certain to become law. SCHIP enjoys strong support from key GOP and Democratic lawmakers, and what the House approves is what the Senate will vote on. Though there has been a lot of talk about having the legislation ready for a Jan. 20 signing by President Obama on Inauguration Day, I’m told it’s highly unlikely the Senate will vote by then.

George E

photo credit: Stogie Guys

Stogie Commentary: Go SCHIP Yourself!

29 Jan

A reader recently sent us a response he got from his senator, Barbara A. Mikulski of Maryland. He had written to express his concern and disappointment over the proposed approximate 20,000 percent tax increase on cigars.

Here is part of the response he received from Senator Mikulski:

cigar tax“I understand your concerns with the tax provisions in the recent version of the children’s health reauthorization legislation, which included a tax increase on large cigars to up to $10 per cigar. I agree that this would have placed an unfair burden on you or your business.

After reading your letter, I took action. I worked with my colleagues, in a bipartisan manner, and fought to drop the ceiling on large cigars from $10 to $3 per cigar. Though still an increase, I wanted you to know that I shared your concerns and acted accordingly.

You should know that I am extremely concerned for the over 12 million children without health insurance. I firmly believe that all children should have access to high quality, affordable health care and health insurance coverage.”

There are so many things wrong with this response, it is hard to know where to begin. First, Senator Mikulski (or, rather, her staff member who responds to constituent letters) includes a giant non sequitur by noting that she wants 12 million children to have health insurance through SCHIP.

Why do the massive costs of SCHIP have to be paid for by taxing an already heavily discriminated group like smokers? Or why it is a good idea to make health insurance funding dependent on people smoking? She never says. Nor does the Senator address the devastating effects that such a tax would have on the families of cigar factory workers in Central America.

But the biggest problem I have with this condescending letter is that it claims that she has addressed the “issue” by dropping the cap on the taxes from $10 to $3 – meaning that the tax increase will now be just 5,900 percent.

What she doesn’t mention is that her proposed tax rate lowers taxes for only the most expensive cigars, leaving taxes exactly the same for all cigars that usually retail for under approximately $8 – the vast majority of all cigars sold.

In short, this reply is the same political double-speak you’d expect from DC politicos: unresponsive and lacking in substance. An apt comparison would be telling someone that pleading not to be shot will result in only two bullets instead of six. Oh, thanks!

Just another reason why the cigar industry needs to get its act together and start doing a better job of fighting these unjust cigar taxes.

Patrick S

photo credit: Stogie Guys

Commentary: The FDA Should Not Be in the Business of Regulating Premium Cigars

25 Jul

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The deadline for comments to the Food and Drug Administration about whether or not it should regulate handmade cigars are due today at midnight. You should submit your comments here.

If you are wondering what to tell the FDA, we gave some succinct suggestions here. Our comments the FDA were a little more in depth. We reprint them here in their entirety:

As Publisher and Editor-in-Chief, respectively, of the cigar news and review site StogieGuys.com, and as cigar consumers, we strongly urge the Food and Drug Administration (FDA) to completely rescind—or, at the very least, significantly curtail—all FDA regulations that apply to handmade cigars.

We have been reporting and writing about the premium cigar industry for over a decade (since StogieGuys.com’s founding in May 2006) That level of experience is not required to understand that, because of their natural and handmade production process, premium cigars will always be an inferior product, compared to other tobacco products, when it comes to effective nicotine delivery. That, combined with their high price point, makes premium handmade cigars particularly unattractive to underage tobacco users. In sum, the interests of public health and harm reduction are not served by regulating premium handmade cigars.

Our comments today reincorporate our comments to the FDA from August 27, 2014 in opposition to any regulations of handmade cigars. Our comments then made five key points, each of which continues to be a compelling reason to not regulate handmade cigars, especially when compared to existing efforts to enforce pre-2016 regulations on cigarettes and other tobacco products:

1. Cigars are fundamentally different from cigarettes and most other types of tobacco.

2. The FDA should not extend authority at all, and certainly not to handmade cigars, because it lacks the ability to do so [given current and future budget constraints].

3. If the FDA erroneously chooses to [continue to] regulate cigars, it should adopt a premium handmade cigar exemption that doesn’t rely on an arbitrary price, or flavor distinctions.

4. FDA regulations on premium cigars will cost jobs, both domestically and abroad. (Avoiding unemployment is almost universally considered good for your health. For example, experts have found (https://bit.ly/2A1X1lZ) that “people who are unemployed: have poorer physical and mental health overall, consult their [primary physician] more, are more likely to be admitted to hospital, [and] have higher death rates.”)

5. The FDA should focus on existing regulations, not expanding new regulations to handmade cigars.

Subjects one, two, four, and five demonstrate why the FDA’s mission of public health, with a special focus on the prevention of tobacco use by minors, should exempt handmade cigars so the focus can be on cigarettes and other tobacco products that fulfill the FDA’s above-stated goals.

We further emphasize the third key point made in our 2016 comments regarding a potential definition used for premium or handmade cigars: If the FDA decides to exempt “premium” cigars, it should do so based on the artisanal techniques used to produce handmade cigars. If, however, the FDA insists on using product cost to draw such a line, it should rely on the only line drawn by Congress which limited SCHIP tax rates to the first 40.26 cents of the wholesale price per cigar (i.e., cigars with a wholesale price above 40.26 cents should be exempt and classified as premium cigars).

Regulation of Handmade Cigars Won’t Advance the FDA’s Stated Goals

If the FDA is devoted to deploying its resources to pursue an agenda of harm reduction, this militates against regulating handmade cigars. The undeniable truth is virtually every human activity—including choices about diet, exercise, healthcare, social relationships, etc.—comes with some health risk. The FDA has recently moved towards a focus on risk-reduction, whereby regulatory activity is judged by its net effects, taking into account that regulation can and will steer individuals towards other, more or less risky, activities. Decreased regulation of handmade cigars logically follows from these stated goals.

Those who have read the National Institute of Health’s “Monograph 9: Cigars: Health Effects and Trends” and overviews of the health impacts of cigarette use will conclude that if the average cigarette smoker were suddenly transformed into the average handmade cigar smoker, public health would be far better off. Cigar smokers tend to smoke far less frequently and are therefore are far more capable of quitting, should they decide to.

The Regulation of Handmade Cigars Will Be Unwieldy

While handmade cigars are made in what is called a “cigar factory,” ultimately compared to most modern standardized manufacturing practices, the very nature of handmade cigars is far less precise than other more mass-market tobacco products. In fact, it is fair to say that the basic cigar manufacturing process has evolved little in decades, or perhaps even centuries.

Cigars are made with very broad specifications, which leaves significant discretion to each cigar roller to produce a final cigar that bares the key characteristics of the blend but is ultimately tweaked slightly to produce a cigar that will still combust and taste as expected by the consumer. The fact is, each cigar leaf is not identical in size, nor can each tobacco be produced uniformly because each frequently comes from a different farm (and part of that farm), a different growing season, and had been hand-processed by a different person.

In other words, no two handmade cigars are ever identical. This makes any attempt to regulate cigars through an FDA pre-approval process inherently unwieldy and unworkable.

The FDA’s Limited Resources Should Be Focused On More Consequential Tasks

Perhaps most critically, the FDA should exempt handmade cigars. Given existing fiscal realities, FDA regulation of handmade cigars would mean less regulatory resources elsewhere. If the FDA had infinite resources to regulate all tobacco products, the correct question to ask would be: Can regulation of handmade cigars create any net health benefit? But even if it could, that is not the reality the FDA faces today, or will ever face.

In a world of growing deficits, increasing financial obligations from entitlement spending, and little appetite for large tax increases, the FDA must accept it is increasingly being asked to do more with less, or at the very least more with the same resources, especially considering its existing large portfolio of non-tobacco regulatory mandates. In that light, the real question the FDA should ask as it considers whether to undertake the regulation of handmade cigars is: Will regulation of handmade cigars, to the detriment of other FDA regulatory activities, create a net gain in public health or risk reduction?

When judged against the potential impact of deploying FDA resources elsewhere, the considerable resources that would need to be devoted to any regulation of handmade cigars (which overwhelmingly produced in jurisdictions outside the United States) cannot be justified. Studies do not show that handmade cigars are used in any meaningful amounts by minors, and in fact even the previous FDA-cited justifications conflated handmade cigar use with use of non-handmade cigars, and also repeatedly conflated tobacco use by adults as old as 25 or even 29 with those of minors (see: https://bit.ly/2dIDpan), almost certainly because of the lack of evidence that studies show that actual minors are using handmade cigars. Whether the FDA chooses to focus on public health overall or tobacco use by minors, regulation of handmade cigars does not serve that goal when compared to using the same taxpayer dollars elsewhere.

Finally, while we believe current overwhelming evidence should cause the FDA to leave handmade cigars out of its tobacco regulation regime, such a decision would not preclude the FDA from, should new evidence be produced or documented use patterns change, revisiting the issue at later date. Barring an act of Congress specifically exempting handmade cigars (there has been, and continues to be, wide bipartisan support for such an exemption), the FDA will still retain such regulatory powers to be deployed later under the Tobacco Control Act.

When it comes to the many tasks given to the FDA by Congress, whether for tobacco regulations or other public health goals, regulating the small percentage of tobacco products that constitute handmade cigars at this time cannot advance the FDA’s larger goals of risk reduction and overall public health compared to deploying the FDA’s limited resources elsewhere. Therefore, we ask the FDA to eliminate its current regulations of handmade cigars.

–Patrick A & Patrick S

photo credits: Stogie Guys

Commentary: Random Thoughts from the Humidor (XXV)

22 Jan

In this edition of Random Thoughts from the Humidor, I remember an old foe, lament the health of the industry, and ponder how social media is changing cigar marketing.

Actually, It’s CHIP Now, Not SCHIP

Remember SCHIP? All the news about a looming government shutdown—as I am writing this, the House has passed a bill to keep the federal government funded for another four weeks, but the Senate doesn’t look poised to reach an agreement—has brought back memories of the Children’s Health Insurance Program (CHIP), formerly known as the State Children’s Health Insurance Program (SCHIP). Just search “SCHIP” on this site (our search bar is in the upper right-hand corner) and you’ll find dozens of articles, mostly from the period of 2007-2009. This January 2009 article was published and updated on the day the SCHIP tax increase was announced (the cap is, and was, 40 cents per large cigar). As we reminded you on Friday, although CHIP’s “funding” would expire if a government funding deal isn’t struck, the tax on tobacco will remain either way. Fantastic. One silver lining: If and when CHIP’s tobacco tax funding is restored, we can once again claim to be “smoking for the children.”

And the Winner Is… Nobody

As you may have seen at Halfwheel.com, the site is not issuing an award for best new cigar company in 2017 because, well, there really wasn’t one. “We’ve given the award each year since 2013 alongside a host of other awards; that will change this year and there’s a good chance that change will be for good,” wrote Charlie Minato. “Due to a variety of reasons, chief amongst them the U.S. Food & Drug Administration’s (FDA) regulation of premium cigars, there simply aren’t many new companies that would be eligible for the award.” We should all be alarmed by this. Creation, innovation, and new blood are signs of a rich and vibrant industry. This is evidence that burdensome regulations and taxes are taking their toll. For those who would stroll the aisles of the IPCPR Trade Show and cite the volume of booths and displays as an indication of industry health, I say this: Think about all the booths and displays that aren’t here. Think about all we might be missing, especially in the form of limited edition smokes. Looking to the horizon, absent major policy changes, isn’t it fair to expect more cigar company consolidation and closures, and fewer new operations?

What Is Skip Martin Eating Today?

Thanks to social media, the way in which the cigar smoking public connects with cigar makers has changed drastically in recent years. In the past, if you wanted to converse with your favorite cigar maker, you’d need to attend a huge gathering like Cigar Aficionado’s Big Smoke, or wait until he hosts an event at a retailer in your area. Today, you can simply log on to Facebook to trade comments, messages, photos, etc. Many cigar smokers even tag the cigar maker when they’re enjoying one of his cigars. The savvy cigar makers are embracing this trend, using Facebook to update their many followers about what they’re smoking, blending, working on—even eating and drinking. In this fashion, social media becomes a powerful tool to constantly stay top of mind with your most loyal customers. It also allows the cigar makers to bypass more traditional media options—like industry magazines, press releases, and, yes, blogs—and take messages directly to the masses. If you doubt this trend, just follow Skip Martin of RoMa Craft Tobac and Steve Saka of Dunbarton Tobacco & Trust on Facebook; they’re constantly posting (some might say marketing). I am surprised more cigar makers don’t wholeheartedly adopt this approach.

Patrick A

photo credit: Flickr

Weekly Cigar News Sampler: Boveda Launches Smart Sensor, CHIP Showdown Won’t Affect Cigar Taxes, Alec Bradley Partners with Rabbit Air, and More

19 Jan

As we have since July 2006, each Friday we’ll post our sampling of cigar news and other items of interest from the week. Below is our latest, which is the 563rd in the series.

1) Boveda, the Minnesota-based “global leader in two-way humidity control,” has introduced what it is calling “the best innovation for premium cigars since the invention of Boveda.” The new Boveda Smart Sensor will sync up your humidor’s humidity and temperature levels with an app on your phone or tablet. After a two-point calibration is completed, the device will be accurate within +/- 1.5% relative humidity, and the app can be customized to alert you to humidity or temperature changes exceeding a user-defined threshold of acceptability. The Smart Sensor is currently available at Boveda.com and retails for about $40, or $50 if you also want four large humidification packets and a calibration kit. Check back at StogieGuys.com in the coming weeks as we are currently testing the device for a full product review.

2) One of the sticking points in the current last-minute budget negotiations in Washington is the extent to which any deal will include funding of the Children’s Health Insurance Program (CHIP). The program is funded largely by tobacco taxes, including a 40-cent-per-cigar tax on handmade cigars. Although the program’s “funding” would expire if a deal isn’t struck, the tax on tobacco remains whether or not a deal is struck and signed by the president.

3) Inside the Industry: On Monday, Alec Bradley Cigar Co. announced a new partnership with Rabbit Air to distribute “customized Alec Bradley/Rabbit Air co-branded air purifiers.” The SPA-700A model, for example, covers 700 square feet and will retail for about $520; the SPA-780A covers 815 square feet and will retail for about $620. The California-based Rabbit Air is “a leader in the air purifying industry, and its MinusA2 Ultra Quiet Air Purifier is the cigar industry standard for wall-mounted smoke-eating units,” according to a press release. “Our mutually beneficial relationship with Rabbit Air is a no-brainer,” said Jonathan Lipson, Alec Bradley’s director of sales and marketing. “Together, we have the opportunity to positively affect brick and mortar tobacconists. Not only will they have the opportunity to use and display the units, tobacconists will also have the ability to sell the units to the end consumer.”

4) From the Archives: Winter is tough on cigar humidity, but if you think your humidity may be off, the first thing to check is the accuracy of your hygrometer (especially if you are using the spring-loaded hygrometers that come in most humidors). For that, you’ll need to perform the simple but extremely useful salt calibration test.

5) Deal of the Week: StogieGuys.com recommends Bespoke Post, a monthly collection of awesome items (think fine bar accessories, hot sauce kits, wine, workout gear, exclusive cigar packages, and more) delivered for just $45. Once you are signed up, there is no obligation; you can skip or purchase each month. Sign up here to be eligible for the February box; the “Churchill” box features four cigars, an ashtray made of reclaimed wood, an odor-eating candle, cedar spills, and a cutter.

–The Stogie Guys

photo credit: Boveda

Commentary: The Truth About Cigar Studies

18 Nov

FDA-cigars-large

By now, you’ve probably heard or read about the findings of a new long-term study of cigar smoking that generated headlines like this one from Fox News: “Cigars just as harmful to health as cigarettes, study says.” Well, don’t toss your Davidoffs in the dustbin just yet.

A closer look inside the numbers, along with some helpful responses from the study’s lead researcher, show that the results aren’t nearly that clear for those of us who enjoy premium, hand-rolled, all-tobacco cigars.

First, and perhaps most importantly, the study made no distinction between those who smoke machine-made cigars and those who smoke premium cigars. In fact, that information wasn’t even collected in the survey of 25,522 subjects for the 1999-2012 National Health Nutrition and Examination Survey, Dr. Jiping Chen, an epidemiologist in the Food and Drug Administration’s Center for Tobacco Products, told me in an email.

Consequently, there was also no consideration of differences in smoking, such as inhaling/not inhaling or the frequency of consumption, Dr. Chen said. “No information was collected in the study on the types of cigars smoked or reasons why cigars were smoked.”

So, someone who sucks down a half-dozen White Owls a day is a “cigar smoker,” the same as someone who lights up an Arturo Fuente Hemingway once a week. “All cigar smokers were treated as a single group,” Dr. Chen said of the survey that was the basis for the cigar study.

This is important because, without getting overly technical, the study compared levels of five “biomarkers”—substances scientists use to measure things like disease or environmental exposure—found in cigar smokers and non-smokers. To get the measurements for cigar smokers, she said, researchers took “the average levels of biomarkers of all cigar smokers.”

Now, to put that in perspective, bear in mind there are roughly 350 million premium cigars sold annually in the United States. Machine-made cigars are sold in the billions. In other words, the premium cigar market is just a tiny fraction of the cigar market.

So it stands to reason that the cigar-smoking group in the study would be vastly tilted toward those who smoke machine-made cigars, and it’s also as likely that an overwhelming percentage of them utilize cigars as do those who smoke cigarettes—as a nicotine delivery system, not for enjoyment, as do most premium-cigar smokers.

Averaging things like this can be dangerous. If, for example, you take the average of Bill Gates’ assets and my assets, we both appear to be very wealthy men.

One other point from the research that I find worth noting is the fact that there was no assessment of the impact of the 2009 SCHIP tax increases. Those undoubtedly led an unknown number of cigarette smokers to turn to machine-made “cigars” because they were taxed at a lower rate and offered a cheaper alternative. To my mind, while these people may now be classified as cigar smokers, they’re really cigarette smokers under a different name.

This contention was at least partly supported, I think, by findings that cigar smokers who were former cigarette smokers had higher levels of the two biomarkers found only in tobacco than did those who hadn’t smoked cigarettes before.

Now, let’s be honest. I don’t think anyone could reasonably dispute the notion that if you smoke cigars like cigarettes you’re almost certainly engaging in the same highly risky behavior as a cigarette smoker. And I can’t imagine that, in this day and age, that would surprise anybody. But that isn’t even remotely the way nearly all of us who smoke premium cigars actually smoke them. We don’t inhale, we don’t smoke all day long, and we aren’t addicted to nicotine.

We do recognize that there is some added danger to smoking premium cigars, but we also know that it is relatively small, and it’s a risk we’re willing to take. Just as we willingly take many other risks in our lives to do things we enjoy.

And as the FDA continues to consider its position on regulating cigars—and whether to grant an exemption for premium cigars—the distinctions I’ve pointed out could make a world of difference. It would be more than a shame for this research to help derail the efforts to secure that exemption because I believe it clearly isn’t applicable.

One bright spot in all this is that the very helpful FDA press officer who helped arrange my email exchange with Dr. Chen told me she will forward this to those involved in the consideration of cigar regulations.

Hopefully, they’ll read it and reach the right conclusion.

George E

photo credit: Stogie Guys

Commentary: Our Comment to the FDA on Regulating Cigars

7 Aug

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The deadline for submitting comments on the FDA’s proposed cigar regulations is Friday, August 8 (tomorrow). If you haven’t yet registered your opinion to help protect handmade cigars, please do so. (See our tip for what to tell the FDA here.)

As you might expect, here at StogieGuys.com we’re registering our comment, and we wanted to share with you what we told the FDA:

We strongly oppose the FDA extending its jurisdiction as proposed in the Deeming Document, and specifically oppose any attempt by the FDA to regulate handmade cigars. However, if the FDA moves forward with the regulations proposed in the deeming document, it should employ the exemption proposed under Option 2, with the following changes: (1) any reference to cigar pricing ($10 or otherwise) should be eliminated from the definition of cigars exempt under Option 2, and (2) the requirement that cigars not have characterizing flavors should be eliminated.

In support of this position, we submit the following points:

Cigars are fundamentally different from cigarettes and most other types of tobacco.

As the Publisher and Editor-in-Chief, respectively, of StogieGuys.com we have been writing about handmade cigars since 2006 and have published thousands of articles and over 750 reviews of handmade cigars. The very nature of our site shows why FDA regulation of handmade, or “premium,” cigars is unwarranted.

A similar site about cigarettes would never exist and could not generate the readership that our site has because cigarettes are a nicotine delivery device, while cigars are a handmade product which exists completely independent of its ability—or more realistically, relative lack of ability—to deliver nicotine. What makes certain cigars good or bad has nothing to do with the nicotine content, and everything to do with the skill that went into making and blending them.

For a person seeking to fulfill their addiction or desire for nicotine, handmade cigars will always be an unappealing and irrational way to attempt to fulfill that desire.  This is particularly true for minors (for whom purchasing tobacco products are already illegal) because they will always have more access to other tobacco products, and will always find that there are easier ways to obtain nicotine through products that are already approved under existing tobacco regulations.

The FDA should not extend authority at all, and certainly not to handmade cigars, because it lacks the ability to do so.

The FDA, like all government agencies, has a limited budget (our national debt is currently increasing at over $2 billion every day), which is why the real question the FDA should be evaluating is not “Should the FDA should regulate cigars?” but “Should the FDA divert resources from its other activities, including existing tobacco regulations, to regulate cigars?” The answer clearly is no.

The FDA has not shown it has the capacity to carry out its existing tobacco regulations. Of the thousands of new products waiting for approval, only a few dozen have been ruled on so far. This demonstrates the FDA does not have the capacity to extend its regulations to handmade cigars. The FDA is specifically not authorized by Congress to ban cigars or other types of tobacco, and given the inability to handle existing pending approvals, expanding jurisdiction to handmade cigars would result in a de facto ban on new cigars because the agency has not demonstrated the ability to approve additional tobacco products at all, let alone in a timely fashion.

Given that Congress mandated that the FDA regulate cigarettes, but left it up to the agency’s discretion whether or not to regulate cigars, the FDA should respect the priorities of Congress and not add cigars to its already overwhelmed regulatory jurisdiction. This is compounded by the number of new cigar products that are introduced every year. While there is no reason to believe that new cigars are at all different in their impact on public health (new products are almost entirely made by changing the blend and ratio of tobaccos used in existing products) every year hundreds or even thousands (if new sizes are each considered a new product) of new cigars are introduced. This would overwhelm existing FDA product approvals and make it more difficult for the agency to fulfill its core mission of regulating cigarettes.

If the FDA erroneously chooses to regulate cigars, it should adopt a premium handmade cigar exemption that doesn’t rely on an arbitrary price, or flavor distinctions.

In the Deeming Document the FDA proposes Option 2, which includes an exemption for premium cigars. This is an important realization of the fact that premium handmade cigars do not pose the same public health concerns that cigarettes do. However, the arbitrary and unscientific $10 price floor should be abandoned.

Simply put, there is no scientific or public health reason for the exemption to rely on a $10 retail price, and the FDA has never demonstrated that one exists. Furthermore, the arbitrary price point doesn’t reflect any reality of the handmade cigar industry. If the FDA insists on a price-based definition of handmade or premium cigars, it should look to Congress to draw the line. To the extent Congress has drawn such a line, it did so in the SCHIP tax rates, which decided to limit taxes to the first 40.26 cents of the wholesale price per cigar. More importantly, any definition that includes production techniques will make it impossible to produce a cigar below a certain price, which sets an organic, as opposed to an arbitrary, price definition.

“Flavored” or infused cigars also represent an arbitrary and unscientific differentiation that should be rejected. No evidence that we know of, or has been presented by the FDA, demonstrates that these cigars pose any additional public health risks.

For these reasons, if the FDA intends to base its regulations on scientific evidence and not on arbitrary standards, it should reject any definition of premium or handmade cigars that includes flavor or a price, while it adopts an exemption for premium handmade cigars.

FDA regulations on premium cigars will cost jobs, both domestically and abroad.

It should also not go unnoticed that aside from the dubious public health justifications for regulating handmade cigars, there are significant human costs to such regulations. Thousands of jobs within the United States would be put at risk if the FDA regulates handmade cigars as proposed, and tens of thousands of individuals in developing countries (particularly the Dominican Republic, Nicaragua, and Honduras) would lose one of their best opportunities for a good job.

The burdens that proposed FDA regulations pose to small businesses—whether cigar shops in this country or cigar factories abroad—would have a huge costs and eliminate countless jobs, especially in places where good jobs are very hard to find. So while regulating cigars would accomplish little if anything in regards to public health here in the United States, it would effectively doom tens of thousands of people to worse lives. Any calculus for public health should not ignore this serious impact.

The FDA should focus on existing regulations, not expanding new regulations to handmade cigars.

Given the existing backload of tobacco products waiting for a ruling from the FDA, it is clear that the agency lacks the resources to regulate cigars. Because diverting limited resources to regulating cigars means less resources for other FDA activities—specifically other tobacco regulations—regulating handmade cigars is not only unnecessary but actually detrimental to the FDA’s public health goals. To the extent there is any doubt on this issue, the FDA should defer any decision on regulating cigars to a later date after it proves capable of fulfilling its existing mandate to regulate cigarettes and other types of tobacco that can have a substantial impact on public health.

As handmade cigar smokers and experts writing about the industry daily since 2006, it is abundantly clear to us that handmade cigars are inherently different from other tobacco products. In proposing an exemption for premium cigars it did just that, but it did so in a clumsy and arbitrary way. If the FDA is serious about fulfilling its Congressionally-authorized mandate, it should not expand its regulations to include handmade cigars. However, if the FDA insists on expanding oversight it should adopt a broad exemption for handmade premium cigars that does not include a characterizing flavor or arbitrary price definition.

Failure to take these suggestions into consideration will make clear to cigar smokers and the premium tobacco industry that the FDA is less interested in public health and more concerned with stifling cigar innovation, eliminating cigar-related jobs, increasing the costs of cigars, and limiting the ability of consenting adults to enjoy premium cigars.

The Stogie Guys

photo credit: Stogie Guys