Premium Cigar User Fees Top $100 Million

Premium cigar companies have paid more than $100 million to the U.S. Food and Drug Administration in user fees, reports Halfwheel, citing a filing sent to an appeals court on Sept. 18.

The filing was sent to clear up points raised at the end of a Sept. 20 hearing before a U.S. appeals court as part of a lawsuit filed by three cigar trade groups that in August 2023 resulted in a ruling vacating the FDA’s 2016 deeming regulations for premium cigars.  

The FDA has appealed the ruling.

User fees are fees paid by cigar companies and others to fund the FDA’s Center for Tobacco Products. The idea is that tobacco companies and their customers, rather than the general public, should bear the costs of regulations.

Cigarettes account for more than 83 percent of user fees in fiscal year 2024, around $148.7 million per quarter. The cigar category—which includes both premium and mass market cigars—is projected to pay $25.5 million per quarter.

While relatively minor on a per cigar basis, the user fees have been a particular annoyance for many premium cigar companies, according to Halfwheel.