FDA Regulations Threaten Cigar Industry Shutdown

Sarah Jean Seman
|
Posted: Jan 21, 2015 2:02 PM
FDA Regulations Threaten Cigar Industry Shutdown

 L.J. Peretti Company, Inc. is a cigar shop situated in the North End of Boston. It is 145-years-old, founded back in 1870 by a Swiss immigrant. These types of shops are scattered all across the United States; they’ve lasted through wars, depressions, and shifting consumer demographics. But now, due to new regulations proposals by the U.S. Food and Drug Administration, these century-old shops face a whole new monster: the Nanny State.

Ever since Congress passed the Tobacco Control Act in 2009, the FDA has tried more than nine times to expand its oversight to premium cigars. Currently its reach applies only to cigarettes, cigarette tobacco, roll-your-own tobacco, and smokeless tobacco.

"This proposed rule is the latest step in our efforts to make the next generation tobacco-free," former Health and Human Services Secretary Kathleen Sebelius stated when the FDA announced its latest regulatory proposals last April.

“This effort by the FDA goes well beyond congressional intent,” according J. Glynn Loope, Executive Director of Cigar Rights of America.

Congress passed the Tobacco Control Act with the intent to curb chemical addictions tobacco products and to restrict youth access, he explained:

“Cigars are not chemically addictive and they are not attractive to the youth for a lot of reasons, price being one of them. The natural market price of a premium handmade cigar is anywhere from five to 30 dollars.“

Have you ever seen pictures of Winston Churchill puffing a rotund, fuming cigar? He is the stereotypical cigar smoker. While curious teens will certainly experiment, there is, as the American Cancer Society noted, a sort of “cigar culture” composed of people who consider themselves connoisseurs and hang out together at cigar bars.

Under the FDA’s proposed regulations, the most heavy-handed measure would require all premium cigars to meet pre-market FDA approval. According to Loope:

“To suggest that every cigar—size, shape, blend—has to be submitted to the federal government before it hits the market is one: ridiculous, and two: economically infeasible for the industry.”

The FDA’s economic analysts predicted that 3,639 types of premium cigars would be impacted by the proposal. These include 3,276 which are imported.

The expenses of premarket tobacco product applications and labeling changes would be “costly,” according the the FDA, which would reduce the manufacturer’s profits.

“Some domestic producers may cease to sell their products domestically or discontinue some products. Foreign producers may cease selling their products to the US or reduce the number of distinct products they sell in the US.”

International trade would take a heavy hit from these FDA requirements, Loope explained:

“There’s over 300,000 associates with this industry in Honduras, the Dominican Republic, and Nicaragua. There are supplier chains, in terms of specific tobacco leaf, coming from Brazil, from Mexico, from Ecuador, [and] from Indonesia.

Our federal government should not be undertaking any type of an exercise like this that threatens very stable, very good jobs, in Latin America the way this proposal does.”

Moving forward, organizations, such as the Cigar Rights of America, are focusing on getting legislation passed to exempt premium handmade cigars from FDA oversight and are working to educate political agencies on why cigars are outside of the Tobacco Control Act's original intent.

“This battle will never go away. You can just ask the chemical industry, and the coal industry, and the automobile industry, and the banking industry. These types of steps by the federal government never go away.”

The ever-lurking threat to the industry has already become a reality for Gary Pesh, President of the Old Virginia Tobacco Company:

“I’m kind of on hold, I can’t go anywhere, I can’t get a line of credit from a bank because I’ve got the threat of the FDA hanging over us.”

Townhall's Ky Sisson brings you the story: