Cigar Association of America - Tobacco Reporter

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.

December 27, 2023

Javier Estades Reelected

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.

November 14, 2023

Budget Office Urged to Ditch Flavored Cigar Ban

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.”

November 8, 2023

DOJ Appeals FDA Premium Cigar Decision

The premium cigar industry recently declared victory in the fight against oversight by the U.S. Food and Drug Administration. Celebrations may have been premature.

The U.S. Department of Justice has filed an appeal on behalf of the FDA for a decision handed down from the United States District Court for the District of Columbia that fully vacated the Deeming Rule as it applied to premium cigars, according to media reports.

The lawsuit was filed by the Cigar Association of America, the Cigar Rights of America (CRA) and the Premium Cigar Association. The case focused in part on the rulemaking process, which requires the FDA to inform the public about upcoming regulations and solicit feedback on those proposed rules.

In last month’s decision in Cigar Association of America et al. v. United States Food and Drug Administration, Judge Amit P. Mehta made a sweeping, albeit expected, ruling that granted relief to the three cigar industry trade groups that sued the regulatory agency in 2016 on behalf of the premium cigar industry.

The news confirms industry fears that warning labels, premarket tobacco product application (PMTA) review of cigars and other limitations that have impeded the ability of cigarmakers are still a possibility.

Recently, the FDA acknowledged the decision and one of its impacts, telling cigar companies that it did not plan to assess user fees for “premium cigars” sold during Q4 FY23.

The Department of Justice, which represents FDA on legal matters, had 60 days to appeal the ruling. It’s unclear whether the agency will ask a court for a stay, which could reenact the deeming regulations for “premium cigars” as the appeal process works itself out.

September 30, 2023

U.S. Premium Cigar Imports Drop

The Cigar Association of America (CAA) has released a report showing that U.S. imports of premium cigars from January-July 2023 are down 3.4 percent compared to the record pace that was set in 2022.

Through the end of July, CAA estimates the U.S. imported 252.81 million cigars, compared to 261.63 million in the same period during the year before.

While the numbers are down compared to last year, the trend line for the first seven months of the year is actually closer to 2022 than the Q1 numbers. More importantly, the numbers are still significantly above pre-Covid-19 levels, reports Halfwheel.

On a month-by-month basis, imports rose in four of the seven months, though March and April were down a combined 11.7 million cigars, or 14.41 percent compared to 2022. Addittionally, there were 6.5 million more cigars imported in May and July, or 8.33 percent over last year.

Nicaragua remains the dominant supplier of premium cigars to the U.S., accounting for roughly 55 percent of imports through the first seven months, according to CAA. However, those imports are down 4.2 percent compared to last year.

The CAA breaks down individual imports from seven countries and all were down except the Dominican Republic, which the group estimates has shipped 3.37 million more cigars compared to the same period last year, an increase of 4.8 percent.

September 28, 2023

Court Tosses Premium Cigar Regulations

The U.S. District Court for the District of Columbia has vacated the Food and Drug Administration’s deeming regulations for premium cigars, reports Halfwheel.

As a result, the deeming regulations introduced by the agency in 2016 do not apply to cigars that meets all of the following criteria:

It is wrapped in whole tobacco leaf
It contains 100 percent leaf tobacco binder
It contains at least 50 percent long filler tobacco
It is handmade or hand rolled
It has no filter, nontobacco tip or nontobacco mouthpiece
It does not have a characterizing flavor other than tobacco
It contains only tobacco, water and vegetable gum with no other ingredients or additives
It weighs less than 6 pounds per 1,000 units.

The lawsuit was filed by the Cigar Association of America, the Cigar Rights of America (CRA) and the Premium Cigar Association.

The case focused in part on the rulemaking process, which requires the FDA to inform the public about upcoming regulation and solicit feedback on those proposed rules.

Contrary to the FDA’s assertion when it announced its finalized rules in 2016, the agency received feedback, according to Judge Amit P. Mehta. Specifically, the CRA in a comment to the proposed rules cited a finding from an FDA-funded study indicating that cigar smokers do not have higher “all-cause” mortality rates than nonsmokers.

According to Halfwheel, the cigar industry is likely to ask the FDA to reimburse the user fees it has paid the agency, which the publication estimates at about $100 million per year for both premium and non-premium cigars.

The FDA still has the option to deem premium cigars as regulated tobacco products, but it must complete the process that it failed to complete properly from 2014 to 2016.

August 9, 2023

Flavor Ban Will Create Unregulated Markets

The Cigar Association of America (CAA) has published a new analysis showing the significant negative impacts the Food and Drug Administration’s proposed ban on flavored cigars would have on public health and law enforcement activities.

“Making flavored cigars illegal will not eliminate the demand for flavored cigars; it will only criminalize their sale and create illicit markets,” said CAA President David M. Ozgo in a statement. “The nation has seen this with marijuana and our failed experiment in alcohol prohibition in the 1920s.”

Earlier this month, the House Agriculture Appropriations Subcommittee approved language in the FDA’s 2024 appropriation that would effectively block the agency from enforcing the proposed ban, Ozgo said. “We applaud the appropriators for recognizing how damaging FDA’s proposed ban on flavored cigars would be.”

According to the CAA, the existing regulatory system for flavored cigars was designed to ensure that legal tobacco products are manufactured to meet established standards, undergo quality control measures, and prevent inclusion of unregulated ingredients that could pose health hazards to consumers.

Criminals, however, do not care about regulatory standards or quality control, Ozgo noted. The analysis shows how illicit tobacco products sold through criminal enterprises often contain dangerous contaminants such as asbestos and rat droppings.

“Further, FDA claims it will only enforce the flavored cigar ban against manufacturers and retailers, not against individuals,” the CAA wrote in a press note. “However, the report notes that nearly all states have cigar excise taxes, and all 50 states have laws that treat unlicensed tobacco sales as a serious crime.”

In written comments submitted to FDA, many law enforcement groups opposed the ban, including the National Association of Police Organizations, Federal Law Enforcement Officers Association Foundation, National Narcotics Officers Association Coalition, National Troopers Coalition and the National Organization of Black Law Enforcement Executives.

The groups pointed out they don’t enforce FDA law, but they do enforce state laws requiring that excise taxes be paid on cigars. Shifting resources to police a new crime—sale of untaxed flavored cigars—will mean reduced efforts to combat other criminal activity, according to the law enforcement groups.

The analysis also raises concerns that law enforcement efforts would fall disproportionately on minority populations. The National Black Chamber of Commerce stated in its FDA comments: “…enforcement of local laws against these transactions (flavored cigars) will certainly bring African Americans, already the subject of over policing, into further confrontations with law enforcement personnel.”

The Congress of Racial Equality also opposed the ban in its public comments, noting that the deaths of Eric Garner and Michael Brown at the hands of police involved tobacco enforcement. Michael Brown’s initial infraction was related to cigars and Garner’s to the sale of untaxed tobacco.

May 29, 2023

Industry Group Opposes Flavored Cigar Ban

The Cigar Association of America (CAA) has filed comments opposing the Food and Drug Administration’s (FDA) proposed flavored cigar ban, saying FDA’s own data show that underage usage of flavored cigars—the main rationale for the proposal—is at historic lows, after years of continued decline.

“This clearly shows that FDA is proposing a solution in search of a problem. The underage usage of flavored cigars is minuscule,” said CAA President David M. Ozgo in a statement. “It is a blatant example of targeting an industry that is clearly marketing its products to legal age adults.”

The comments note that one of the key purposes of the Tobacco Control Act—the law giving FDA authority to regulate tobacco—is to continue to permit the sale of tobacco products to adults, in conjunction with measures to ensure tobacco products are not sold or accessible to underage purchasers. The current historically low youth usage rates show the success of existing measures.

According to the CAA, government evidence shows that youth usage of cigars is so low as to be almost immeasurable. When the FDA first sought to exercise regulatory authority over certain tobacco products in 1996, the only survey that tracked youth usage of cigars in 1997, the National Survey on Drug Use and Health (NSDUH), showed last 30-day youth usage at 5 percent in 1997. In 2020 NSDUH tracked last 30-day youth usage of cigars at 0.8 percent.

The CAA comments highlight the most recent data from the government’s Population Assessment of Tobacco and Health Survey (PATH) showing that youth last 30-day usage of cigars overall was down to 0.75 percent and that youth usage of flavored cigars is around just 0.29 percent.

“In short, youth usage of flavored cigars continues to decline to almost unmeasurable levels,” Ozgo stated in the filed comment. “FDA asserts that flavored cigars attract youth. If that were true, we would expect flavored cigars to account for a majority of youth cigar use,” the comment added.

“But the government data clearly show that youth usage of flavored cigars is tiny and declining further,” Ozgo noted.

The comments also state there is no scientific basis for the proposed ban, but there would be devastating economic consequences. Many small businesses, often minority owned, would be negatively impacted as well as an assortment of cigar manufacturers, suppliers and producing countries such as the Dominican Republic and Honduras.

Additionally, the CAA comments go on to demonstrate how the FDA does not show any differentiated health effects posed by flavored cigars and that banning flavored cigars would only lead to the development of an unregulated illegal market for flavored cigars. Illegally produced and sold product can often have dangerous additives.

August 7, 2022

U.S. Premium Cigar Imports Up

The United States imported 21.4 million premium cigars in 2022, up 3.8 percent from the previous year, reports Halfwheel, citing the Cigar Association of America (CAA).

Nicaragua supplied 14.73 million premium cigars while Honduras delivered 3.21 million, both showing increases from 2021.

Imports from the Dominican Republic, on the other hand, decreased by more than 40 percent.

The CAA calculates its report numbers based on import numbers from the U.S. Census Bureau, U.S. Customs Services and information reported by cigar companies. Numbers are not exact due to reporting differences, according to the association. The CAA estimates how many “large cigars” were actually “premium cigars.”

May 3, 2022

U.S.: Record Premium Cigars Imports

The United States imported a record-setting 456.3 million premium cigars in 2021, according to the Cigar Association of America (CAA).

The CAA estimates that 364.4 million premium cigars were imported in 2020, showing a 25.2 percent increase in 2021.

December, however, showed a 23.7 percent drop in imports, marking the only month that did not exceed 2020 figures. The fourth quarter as a whole represented a 6.8 percent decrease compared to 2020.

According to Halfwheel, the CAA calculates its numbers based on the import numbers provided by the U.S. Census Bureau, U.S. Customs Services and information from cigar companies. The trade group’s numbers are not exact because of reporting differences; it estimates how many “large cigars” were actually “premium cigars.” There are some machine-made cigars that meet the U.S. definition of a “large cigar,” though those cigars would not be considered premium cigars by most people.

March 22, 2022

Tag: Cigar Association of America