A Brief Overview on What's Happening Between the FDA and the Cigar Industry

A Brief Overview on What's Happening Between the FDA and the Cigar Industry

"FDA REGULATIONS COULD JEOPARDISE THE CIGAR INDUSTRY"

The Food and Drug Administration has a long-running history on the debate against selling cigars and tobacco. In recent years, the agency has increased the pressure on cigar manufacturers to adhere to their new regulations, causing feelings of frustration from manufacturers and consumers as it could cost them thousands of dollars to comply. Right now, the premium cigar industry is facing a May deadline that requires all new tobacco products to obtain regulatory clearance from the FDA, creating extra pressure to the industry. According to data compiled by Magnum Economic Consulting, the compliance costs could put nearly 90% of U.S. cigar manufacturers out of business and destroy 5,300 jobs!

NEW REGULATIONS INTRODUCED - This whole saga could be traced back to 2016, when the FDA placed stricter regulations on the whole U.S. tobacco industry, including premium cigars. The whole aim, stated by the FDA, was to improve overall public health. Their controversial proposal includes the banning of free samplers, restricting tobacco purchase from those under 18, and the addition of mandatory health warnings with a clear indication of authorisation from the FDA. Not only will this affect manufacturers from the U.S, but it will also affect Cuban cigars companies.

Out of all these proposals, cigar manufacturers are most concerned about mandatory health warnings from the FDA. In an industry where releasing new products is absolutely crucial to its success, these additional protocols could further delay the whole process of getting the product from the manufacturer to the consumer, while also incurring additional costs.

Hans-Kristian Hoejsgard, the owner of Davidoff and other cigar brands cites: "We're 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 ten years."

Hoyo de Mena Farm in Cuba.

"CIGAR INDUSTRY CHALLENGES THE FDA"

Amidst the FDA regulations, there are three lobbying groups that are challenging the FDA's implementation of harsher regulations, that would be the IPCPR (Cigar Association of America, Cigar Rights of America and Premium Cigar Association). These associations have actually sued the FDA due to these new regulations.  

UNCONSTITUTIONAL - The lobbying organisations have complained that the 'Final Deeming Rule' is an unconstitutional case of 'compelled' speech, which is part of the First Amendment in American law. In the 2000s, the Federal Trade Commission and the U.S. cigar industry, agreed on placing health warning labels on the packaging, including the addictiveness warning. But on top of the FTC warnings, the FDA are now also demanding two additional stickers that will be covering 30% of two main sides of each cigar box. 

INACCURATE MEASURE - In July 2019, these groups compiled a file of comments coming from cigar companies from right, left and centre, to reiterate the reasons why the FDA should take a step back and reconsider their stance on the whole situation - and hopefully - reassess whether an exemption could be made. Robert Levin, the chairman of CRA, stated that this was done to raise the question of "Substantial Equivalence", which is one of the three pathways to product approval by the FDA - it is basically when a new product is compared with an older product that has been proven to be safe to consume. Levin further commented that "premium handmade cigars do not present a threat to the public health; that as an all-natural product, there are natural agricultural variances that make regulations such as testing, inappropriate for handmade cigars." Though machine-made cigars could adhere to these regulations, Mr Levin's comments imply that it wouldn't make sense to apply it to handmade cigars as there are far too many variations out in the market; therefore it would be unfair for the FDA to base their decisions on this measure.

RE-ESTABLISH THE DEFINITION OF PREMIUM CIGARS - Another comment in the file suggests that the FDA should establish a federal premium cigar definition, in order for a much more fair measure to regulating premium cigars. The CAA proposed that a 'premium cigar' should be defined as (1) Wrapped in whole leaf tobacco (2) Contains 100 per cent leaf tobacco binder (3) Manually combing the wrapper, filler and binder (4) Has no filter, tip or non-tobacco mouthpiece, and is capped by hand (5) Weigh more than 6 pounds per 1,000 units. This was proposed in the hope that the FDA could use a better measure than "Substantial Equivalence". The whole process of cigar constructional is very artisanal, starting al the way from the cultivation of tobacco to the art of cigar blending.

Tobacco from the El Laguito 'Cohiba' Factory in Cuba.

 

"A REASON TO BE OPTIMISTIC?"

CITED AS LOWEST PRIORITY - Just a few weeks ago, the FDA issued a somewhat optimistic new guidance citing handmade cigars as the agency's "lowest priority", as they recognise how the youth rarely consume these premium goods. The FDA emphasised how instead, they will be focusing on regulating vaping and e-cigarettes. Though this may certainly seem like good news, J. Glynn Loope from the Cigar Rights of America quotes "We appreciate the recognition of being on the lower end of risk, but we'd like to not be subject to this regulation at all." To many cigar companies, including the J.C. Newman Cigar Co, it doesn't provide much certainty or relief to the situation.

"THE EFFECT ON THE CUBAN CIGAR INDUSTRY"

Though it is mainly affecting U.S. cigar manufacturers, the Cuban cigar industry is also subject to these proposals by the FDA. After all, the U.S. market is one of its largest markets to exploit. With the embargo placed on Cuba enduring for more than 50 years, the approval process for these exclusive cigars will become even more lengthy and expensive. It could leave the Cuban cigar companies to question whether it is worthwhile to enter the market, especially with the additional costs now involved. With that in mind, it may also further delay the prospects of getting the Cuban cigar ban lifted in the US, thanks to the embargo on Cuba, which was first placed during Fidel Castro's Cuban Revolution. But from the current developments, it seems like it won't make it any easier for U.S. consumers to get their hands on their favourite Cohiba Behike 52 cigar, Montecristo No. 2 cigar or any other Cuban Cigar Brands any time soon.

So what now? The cigar industry is still very hopeful that the FDA, as well as the Trump administration, reconsiders the regulations placed on premium cigars. But for now, cigar aficionados can only hope for the best.

Looking for premium cigars to add to your humidor? Why not check our Cuban Cigar Shop where we sell some of the Best Cuban Cigars in the market. And if you're interested in reading more articles about the world of Cuban cigars, do check out our Cuban Cigar Blog: