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 J.C. Newman Cigar Co of Tampa, Florida has been in business since
1895, and now has about 750 employees that make premium cigars by
hand or on vintage machines.
In less than 90 days, the industry will have to comply with the
first-ever rules on cigars issued by the U.S. Food and Drug
Administration. Against expectations, the agency included premium,
hand-rolled cigars in its oversight along with mass-produced,
machine-cut stogies.
Cigar industry advocates warn the rules, particularly a requirement
to submit new products for FDA review, may prove too costly for up
to 75 percent of the smaller manufacturers that use more traditional
methods.
The premium industry has lobbied for several years for an exemption
from the rules, and some of its leaders, including Newman, say they
will meet with members of Congress or take legal action to fight the
new FDA regulation. Major cigar associations are expected to gather
next week to map out a strategy.
"The FDA took the path of least resistance,” said Newman, the fourth
generation of his family to head the cigar company. "It is easier to
make a one-size fits all regulation than try to understand the
nuances of the industry."
The FDA last Thursday banned the sale of e-cigarettes and cigars to
minors and said it would require manufacturers to submit their
products for review. Both are proving increasingly popular among
teens and middle school students, threatening efforts to keep a new
generation away from nicotine addiction and the ills of tobacco.
Teenage males in particular have taken to small cigars, or
cigarillos, infused with flavors such as chocolate, strawberry and
fruit punch. But the makers of premium cigars say their products are
smoked on average twice a week by adult men and don't represent a
temptation for minors.
"This is something that is enjoyed by adults in a relaxed setting,"
said Kevin Talley, senior director of federal affairs for the
International Premium Cigar and Pipe Retailers Association, which
represents about 5,000 small business retailers. "It's an artisan
product, a labor of love for these manufacturers."
Mitch Zeller, head of the FDA's Center for Tobacco Products, said
the agency could not make such fine distinctions in introducing new
consumer protections against tobacco products.
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"All cigars pose serious negative health risks. To exclude some
would be neglecting our duty to protect public health," Zeller told
reporters after the rules were announced.
The premium cigar industry accounts for about 300 million units, or
less than 3 percent of the nearly 12 billion cigars sold annually in
the United States, according to data from the Alcohol and Tobacco
Tax and Trade Bureau.
Euromonitor estimates that about $3.1 billion in large cigars - a
category that includes premium brands - were sold in the United
States last year. That compared with $2.9 billion in standard size
cigars and $1.3 billion in small cigars - which are typically less
expensive and made by machine.
The biggest challenge for the cigar industry would be to meet new
testing requirements for products developed after February 2007.
The new rules would be financially burdensome for the vast majority
of premium cigar manufacturers because most are small operations
that could not afford the time or cost government approval new
blends and cigars would take.
"When customers come into the store, the number one question we are
asked is what's new?" said John Anderson, whose stores include W.
Curtis Draper Tobacconist, located, steps from the White House. The
store has been open since 1887 and served presidents, but if
everything continues as laid out in new regulations "we would lose
85 percent of product on our shelves," said Anderson.
(Reporting by Jilian Mincer, additional reporting by Bill Berkrot;
Editing by Michele Gershberg and Alan Crosby)
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