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Tag: Premium Cigar Association

  • 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.

  • 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. 

  • 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.

  • DOJ Appeals FDA Premium Cigar Decision

    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.

  • Court Tosses Premium Cigar Regulations

    Court Tosses Premium Cigar Regulations

    Photo: Olena

    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.  

  • Cigar Association Meets CTP Officials

    Cigar Association Meets CTP Officials

    Photo: Rawf8

    The Premium Cigar Association (PCA) briefed Brian King, the new director of the Center for Tobacco Products (CTP), on the industry’s issue set and the association’s priorities.

    The briefing, which was one of King’s first engagements with stakeholders, covered material facts about the uniqueness of the products, legislative history, current health data, economics and impact of regulatory efforts.

    King was joined by several other members of the U.S. Food and Drug Administration, including Michele Mital, deputy director of the CTP. The PCA was represented by Greg Zimmerman (The Tobacco Co.), Scott Regina (Emerson’s Cigars), Mike Condor (Crowned Heads), Scott Pearce (PCA), Joshua Habursky (PCA) and Patrick Anderson (PCA consultant).

    “Director King is a researcher, and we urged him to lean into that part of his background and shed the current mantel that CTP wears—‘tobacco-free’ ideology is not what the Tobacco Control Act authorized,” said Zimmerman, president of the PCA, in a statement.

    “A lot of time and money has been spent by the government to try and justify FDA’s efforts to regulate premium cigars. While PCA is proud of our wins in defense of the industry, what we really need them to understand is that they are not achieving their own goals when they take broad sweeping approaches to regulation,” said Pearce, executive director of the PCA.

    “As long as the FDA remains our regulator, there needs to be productive dialogue. The necessity for the FDA to be aggressive toward premium cigars is not prudent, and we are hopeful that this personnel change will represent a departure from the past actions that were based on a one-size-fits-all approach,” noted Habursky, deputy executive director and head of government affairs for the PCA.

  • FDA Ignored Evidence in ‘Deeming’ Premium Cigars

    FDA Ignored Evidence in ‘Deeming’ Premium Cigars

    Photo: Viacheslav Yakobchuk

    The U.S. Food and Drug Administration ignored evidence about health risks in considering premium cigars to be subject to same law as cigarettes, a federal judge ruled on July 5, reports Reuters.  

    The litigation focuses on the 2016 Deeming Rule, in which the agency identified a wide range of tobacco products, including premium cigars, to be subject to its regulatory authority along with cigarettes under the Family Smoking Prevention and Tobacco Control Act.

    The FDA rule requires cigar makers to register their products annually, provide ingredient lists for each product and submit products for laboratory testing—procedures the premium cigar industry considers impractical for its handmade, “artisan” products.

    The Premium Cigar Association and Cigar Rights of America challenged the Deeming Rule, arguing that, unlike cigarettes and e-cigarettes, premium cigars do not appeal to young people and are not associated with addiction. They cited studies showing that young people are unlikely to use premium cigars, that users of premium cigars are unlikely to smoke them frequently and that infrequent cigar use is not associated with increased mortality.

    U.S. District Judge Amit Mehta in Washington DC agreed that the FDA had not adequately considered the studies cited by the plaintiffs, instead asserting that there was “no evidence” that premium cigars were less harmful.

    “Where, as here, an agency speaks in absolute terms that there is no evidence, it acts arbitrarily and capriciously when there is in fact pertinent record evidence and the agency ignores or overlooks it,” the judge wrote.

    Judge Mehta asked the FDA and the industry groups to submit briefs on whether he should vacate the FDA’s decision or simply remand the matter back to the agency.