Category: Cigars

  • PCA Previews 2024 Cigar Industry

    PCA Previews 2024 Cigar Industry

    The U.S. premium cigar industry will face both challenges and opportunities in 2024, according to the Premium Cigar Association (PCA).

    In a commentary published on its website, the trade group details the issues it expects to impact its business this year.

    With congressional gridlock and narrow partisan margins in the U.S. Congress, the PCA expects few pieces of legislation to be signed into law in 2024. As a result, government action is likely to be more regulatory than legislative.

    In both the U.S. House of Representatives and Senate, active legislation remains a threat to the premium cigar and pipe industry that would result in massive federal tax increases. Standalone legislation exists in the form of the Tobacco Tax Equity Act and the Care for Moms Act that use tobacco tax revenue to pay for new maternal health programs.

    The White House Office of Information and Regulatory Affairs is conducting meetings and a review of the Tobacco Product Standard for Characterizing Flavors in Cigars, which would prohibit characterizing flavors (other than tobacco) in all cigars.

    In November 2023, the PCA raised several objections to the product standard and asked the Office of Management and Budget (OMB) to remit the rule back to the Food and Drug Administration for further analysis. The Center for Tobacco Products (CTP) has since delayed the release of the final rule, which was expected in December 2023. Although the FDA is working toward completing the final rule in 2024, the PCA believes it could prove politically challenging to release a final rule that would deprive millions of adult consumers of their preferred product choice before the election.

    The FDA is also proposing new requirements for tobacco product manufacturers regarding their products’ manufacture, design, packing and storage. The PCA participated in many public forums and submitted written comments opposing the proposed rule, including its applicability to premium cigar factories. The rule is expected to be sent to the OMB in 2024 for regulatory review.

    In 2022, the Biden administration announced plans to develop a proposed product standard that would establish a maximum nicotine level to reduce the addictiveness of cigarettes and certain other combustible tobacco products. The agency has not moved on releasing a proposed rule, and the main question for the PCA is whether this rule will apply to premium cigars, cigars more generally or pipe tobacco.

    In September 2023, the Department of Justice, which represents the FDA, informed the court of its decision to appeal the decision rendered by Judge Amit Mehta in Cigar Association of America et al. v. United States Food and Drug Administration et al., which vacated the deeming rule as it applies to premium cigars. The decision is being appealed to the United States Court of Appeals for the District of Columbia Circuit before a three-panel group of judges. The case is expected to be argued in 2024. At present, the vacatur of the deeming rule for premium cigars stands during the appeals process. However, the appeals court may be asked to block the ruling while it considers the arguments.

  • Copperman to Lead Cigar Rights of America

    Copperman to Lead Cigar Rights of America

    Credit: Thapana Studio

    The Cigar Rights of America (CRA), a cigar industry trade group, announced the promotion of Mike Copperman to executive director.

    Copperman, who serves as director of legislative and regulatory affairs, has been with the organization since 2011. Before that, he owned Bethesda Tobacco in Bethesda, MD, and once served on the board of the IPCPR, the organization now known as the Premium Cigar Association.

    He will continue to serve as director of legislative and regulatory affairs while also serving as executive director.

    “We are thrilled to welcome Mike as the new executive director of CRA. His wealth of experience and dedication to our cause make him the ideal leader to advance our mission and navigate the evolving landscape of premium cigar advocacy,” said Robert Levin, president of CRA and owner of Holt’s/Ashton, in a press release.

    The CRA’s executive director role has remained vacant for three years following the departure of Glynn Loope in late 2020.

  • U.S. Premium Cigar Imports Flat in 2023

    U.S. Premium Cigar Imports Flat in 2023

    A recent report by the Cigar Association of America (CAA), an industry trade group, found that the United States imported a total of 338.87 million premium cigars between January and September 2023. The amount is only 2.61 million cigars less than the number imported during the same period in 2022. This represents a decrease of 0.8 percent.

    “As of the end of the third quarter this year, premium imports have climbed back to near breakeven when comparing this year with the third quarter in 2022,” said Daniel Cotter, chief statistician for CAA, in a press release. “The data show the low point when comparing this year to last year was at the end of April. As of 4/30/23, premium imports were down almost 7 percent year-over-year (YOY).”

    Nicaragua continues to be the top supplier of premium cigars to the U.S. with 181.41 million premium cigars imported in the first nine months, accounting for roughly 53.5 percent of all imports.

    The Dominican Republic, which accounts for 30.7 percent of imports, has had increased exports for most of 2023, compared to 2022.

    In order to surpass 2022 imports, the U.S. would need to import an average of 41 million cigars per month. CAA calculates its numbers based on both the import data provided by the U.S. Census Bureau and U.S. Customs Services, as well as information from cigar companies themselves.

  • Resolution to Exempt Premium Cigars

    Resolution to Exempt Premium Cigars

    Image: conzorb

    A resolution introduced in the U.S. House of Representatives would remove the Food and Drug Administration’s authority to regulate premium cigars, according to Halfwheel.

    Cigar Rights of America (CRA) worked with Representative Byron Donalds to introduce the joint resolution, which would provide a definition of premium cigars and specify that the term “tobacco product” does not mean premium cigar.

    To be considered a premium cigar, a product must meet these requirements: is wrapped in whole tobacco leaf; contains a 100 percent leaf tobacco binder; contains at least 50 percent (of the filler by weight) long filler tobacco (i.e., whole tobacco leaves that run the length of the cigar); is handmade or hand-rolled (i.e., no machinery was used apart from simple tools, such as scissors to cut the tobacco prior to rolling); has no filter, nontobacco tip or nontobacco mouthpiece; does not have a characterizing flavor other than tobacco; contains only tobacco, water and vegetable gum with no other ingredients or additives; and weighs more than 6 pounds per 1,000 units.

    The resolution has gained 10 co-sponsors from both political parties. It has been referred to the House Committee on Energy and Commerce and is awaiting further action.

    If the resolution is passed, premium cigars would be exempt from all aspects of the Family Smoking Prevention and Tobacco Control Act. Congress would take back authority over cigar regulation.

  • Habanos Debuts ‘El Rey Del Mundo Royal’

    Habanos Debuts ‘El Rey Del Mundo Royal’

    The El Rey del Mundo Royal Series (50 ring gauge x 155 mm length).

    Habanos S.A. released its latest vitola, the El Rey Del Mundo Royal Series, at an event in Cyprus last week. The event was put on one of Habanos’, the Cuban cigar industry’s distribution arms exclusive distributors, Phoenicia T.A.A.

    The Royal Series (50 ring gauge x 155 mm length) will be on sale exclusively at La Casa Del Habano franchise stores.

    The company also unveiled new products such as the Edición Regional Por La Larrañaga Fénix, and the new Cohiba Wide Short (machine-made Cuban cigar).

    The launch of the new vitola shared the spotlight with both companies celebrating 15 years of a “fruitful business partnership,” according to an emailed release.

    The event brought together more than 450 aficionados from Lebanon, United Arab Emirates, Qatar, Kuwait, Malta, Italy, France, Spain, Germany, United Kingdom, the Democratic Republic of Congo, Switzerland, the Netherlands, Kuwait, Bulgaria, Canada and Bahrain.

    Also in attendance were the co-presidents of Habanos, Maritza Carillo González and Luis Sánchez-Harguindey Pardo de Vera.

  • PCA Debuts Advocacy Grant Program

    PCA Debuts Advocacy Grant Program

    Image: Olivier Le Moal

    The Premium Cigar Association (PCA) of the United States announced a new state advocacy grant program aimed at investing in state associations and their boots-on-the-ground lobbying capacity for the 2024 legislative cycle.

    The resources in the program approved by the PCA board of directors will be spent much like a match grant program where the state association agrees to match funding by the PCA, going toward hiring contract lobbyists to advance positive legislation or fight back against erroneous regulations. State associations must have a basic infrastructure in place and must meet certain criteria to be eligible for funding, including having an incorporated state association and agree to accountability and transparency with the PCA about where the funds will be spent. 

    “This is not only a way for us to support existing state associations and their advocacy capacity, but it also establishes a baseline for starting a brand new state association with the prospective of seed funding. This criterion is a blueprint to get started and to receive funding. Our staff will continue to support individual associations and retailers with strategy and logistics, and this is a new tool to help maximize that effectiveness,” says Scott Pearce, executive director of the PCA.

    Grant criteria include: having an incorporated and active state association; having an elected board of directors; having a designated treasurer with authority over accounts; agreeing to comply with PCA reporting requirements; agreeing to PCA involvement in consulting lobbyist selection process; agreeing to disclose any and all issues for which funds are used and for which lobbyist is engaged; and providing the PCA with the operating budget and amount and source of funds raised by the state association.

    “This year, our team has been extremely effective in the states and is reflective of retailers stepping up to defend their businesses. This state grant program is aimed at spurring this level of activity and, frankly, success moving forward. Each year, our team must evaluate our priority area, and in the past, our Vision 50 strategic plan focused on litigation or international outreach. Make no mistake, this is the year of the states,” says Joshua Habursky, the PCA’s head of government affairs.

    Applications can be submitted to the PCA online portal and will be reviewed by appropriate advocacy staff and the PCA Legislative Affairs Committee. Applications will be reviewed on a rolling basis and will reflect legislative/regulatory necessity in the state. 

  • Planting on Schedule in Sancti Spiritus

    Planting on Schedule in Sancti Spiritus

    Photo: Habanos

    Tobacco planting in Cuba’s Sancti Spiritus province are proceeding according to schedule, reports Prensa Latina.

    The 2023-2024 crop is expected to benefit from investments in science and technology, according to Isidro Hernandez, agricultural director of the local tobacco collection and processing company.

    According to Prensa Latina, tobacco growers have been satisfied with the contributions achieved through root ball tunnels and seeds obtained through mechanization and phytosanitary care.

    Meanwhile, photovoltaic panels are assisting in the efficient administration of fertilizers and optimal use of water.

    In addition, controlled leaf curing will reduce farmer’s reliance on the weather.

  • Javier Estades Reelected

    Javier Estades Reelected

    Photo: CAA

    The Cigar Association of America (CAA) has reelected Tabacalera USA CEO Javier Estades as its chairman.

    “Chairman Estades has been a leader in advancing public policy for the Cigar industry at the federal, state and local levels,” said CAA President David Ozgo in a statement. “He helped guide us to significant victories on a number of critical issues, which his peers recognized by reelecting him for another term as chairman. I personally appreciate his partnership, guidance, and support.”

    “I am excited to continue as Chairman of CAA, and proud of all the big wins we have achieved for the cigar industry,” said Estades. “We still have challenges ahead, but CAA is ready to continue fighting against improper, overreaching efforts by FDA and state and local governments.”

    As head of Tabacalera USA, Estades oversees a number of premium cigar entities, including Fort Lauderdale-based premium cigar company Altadis USA, the distributor and marketer of classic handmade premium cigars such as Montecristo, Romeo y Julieta and H. Upmann. He is also responsible for JR Cigar, one of the largest online retailers for premium cigars, cigar accessories, humidors, etc. and Casa de Montecristo, the premier modern cigar store featuring a large selection of premium cigars, smoking accessories, walk-in humidors, lounges and full bars across the U.S.

    After joining the U.S. cigar industry in 2011, he was first elected chairman of the CAA in November 2015.

    CAA is a leading national trade association for the U.S. cigar industry, representing the full range of the cigar industry. The organization supports its members by helping them successfully navigate through a challenging business environment, utilizing a broad network of advocates, who engage officials at the federal, state and local levels of government.

    “Cigars are more than a great American tradition—they are a powerful contributor to the American economy, responsible for billions of dollars in annual revenue and thousands of quality jobs,” Ozgo noted.

    Originally established in New York City in 1937 as Cigar Manufacturers of America, CAA’s roots date to predecessor organizations prior to 1900. The group is now based in Washington, D.C.

     

  • Budget Office Urged to Ditch Flavored Cigar Ban

    Budget Office Urged to Ditch Flavored Cigar Ban

    Photo: Paul Raven

    The Cigar Association of America (CAA) has asked the Office of Management and Budget (OMB) to withdraw the Food and Drug Administration flavored cigar product standard (FCPS) banning flavors in cigars, which it said would cost the industry nearly $4 billion in sales—up to 47 percent of industry sales—and destroy 16,000 jobs.

    “We presented evidence to OMB that FDA’s proposed flavored cigar ban dramatically fails to meet the criteria necessary for such a ban under the Tobacco Control Act, offering little or no public health benefit while having a devastating economic impact on the industry,” said CAA President David Ozgo in a statement following the group’s Nov. 6 meeting with OMB officials.

    “FDA claims the product standard will reduce youth usage of cigars and that prohibiting flavored cigars will address health disparities in minority adult subpopulations. CAA showed OMB government data demonstrating that neither of these claims is true.”

    In order for FDA to impose a flavored cigar ban through a FCPS, the law requires that the Agency consider: whether the potential product standard is appropriate for the public health, taking into consideration scientific evidence concerning the risks and benefits to the population as a whole; the increased or decreased likelihood that existing users of tobacco products will stop using such products; and, the increased or decreased likelihood that those who do not use tobacco products will start using such products.

    “FDA’s flavored cigar product standard fails on all three accounts,” Ozgo charged. “Youth usage rates of cigars, and of flavored cigars in particular, are at all-time lows and these low rates reflect a stable and sustained trend.”

    There is little or no public health benefit from the proposed flavored cigar product standard, but huge negative economic consequences will result.

    David Ozgo, president, CAA

    The 2022 National Youth Tobacco Survey (NYTS) showed past 30‐day youth cigar use at 1.85 percent and past 30‐day youth flavored cigar use at 0.83 percent. The recently released 2023 NYTS data showed past 30‐day youth cigar use has declined to 1.6 percent. While the flavored cigar use data has not yet been released, it is expected to follow the trend at under 1 percent of use.

    Other government surveys reflect similar trends. In fact, the most recent Population Assessment of Tobacco and Health Survey (PATH) showed that past 30-day youth usage of cigars was only 0.7 percent and past 30-day youth usage of flavored cigars was just 0.14 percent.

    In addition to unsupported youth usage claims, the CAA contends that the FDA failed to show that adult subpopulation health disparities are associated with flavored cigar use or that banning flavored cigars would remedy these disparities among Black, Non-Hispanic Americans. The CAA did so despite the fact that FDA is required by law to base its decisions not on subpopulation impacts but on impacts to the population as a whole.

    “FDA’s claims aside, there is simply not a pattern of use of these products that raises a concern of public health that can justify eliminating an entire category of products, while depriving adult consumers of the right to choose these products” Ozgo said.

    While the public health case is non-existent, FDA’s proposal would have dramatically negative economic consequences. A recent study by the Policy Navigation Group showed the flavored cigar ban would reduce retail sales by nearly $4 billion, up to 47 percent of industry sales, causing some 16,000 people to lose their jobs.

    The CAA and other industry groups recently convinced a court to reject the agency’s effort to regulate “premium” cigars. More particularly, the judge in the case ruled against the FDA, citing the agency for ignoring the scientific evidence. The proposed FCPS similarly ignores scientific evidence.

    “Just as it did in 2016 and 2019, we urge OMB to again reject FDA’s flavored cigar proposal,” said Ozgo. “There is little or no public health benefit from the proposed FCPS, but huge negative economic consequences will result. This is as bad as public policy gets. Ultimately, FDA’s proposal is a solution in search of a problem.”

  • Cigar Group Wants Better Justification for U.S. Flavor Rule

    Cigar Group Wants Better Justification for U.S. Flavor Rule

    Image: razoomanetu

    The Premium Cigar Association (PCA) testified before the White House Office of Management and Budget’s Office of Information and Regulatory Affairs (OIRA) as part of the administration’s review of the U.S. Food and Drug Administration’s draft Final Rule “Tobacco Product Standard for Characterizing Flavors in Cigars.”

    PCA President Scott Regina provided several examples of the impact that the rule would have on specialty tobacco retail, emphasizing that the FDA had not conducted a proper small business impact analysis. The PCA also outlined how the rule would directly affect regulatory matters outside of the FDA’s jurisdiction, including law enforcement, international trade and foreign policy.

    “It’s questionable whether FDA has the authority to issue standards that result in a product ban, especially when they are acknowledging that the regulation does not address a specific risk,” said Regina in a statement.

    “Ultimately, we asked OIRA to consult with a host of affected federal agencies and to remit the draft Final Rule back to FDA for better justification of authority, cost-benefit analysis and small business impact,” said Scott Pearce, executive director of the PCA.

    The OIRA has scheduled meetings with additional stakeholders throughout the month as well as proponents of the characterizing flavor product standard for cigars.

    The PCA published a full list of recommendations on the draft Final Rule.