Tag: premium

  • Bill Aims to Exempt Premium Cigars from FDA Control

    Bill Aims to Exempt Premium Cigars from FDA Control

    A bill introduced on the Congressional House floor Friday would exclude cigars from the broader “tobacco product” categorization defined by Federal Food, Drug and Cosmetic Act, thereby exempting premium, handmade cigars from FDA regulation.

    Under the new bill, premium cigars would follow the same definition Judge Amit P. Mehta recently established in the cigar industry’s lawsuit battle with the FDA. This definition of a premium cigar would include the following parameters:

    • Wrapped in whole tobacco leaf  
    • Contains a 100% leaf tobacco binder  
    • Contains at least 50% long-filler tobacco
    • Is handmade or hand-rolled
    • 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  
    • Weighs more than six pounds per 1,000 units.

    The Federal Food, Drug and Cosmetic Act essentially authorizes the FDA to regulate food, drugs, medical devices, and cosmetics. These broad categories ultimately include “tobacco products,” which are broadly defined in the Act as “any product made or derived from tobacco, or containing nicotine from any source, that is intended for human consumption…” H.R. 2111, being brought forth by Rep. Byron Donald, would amend this portion of the Act.

    “Back in January, the cigar industry notched yet another big victory against the FDA in the longstanding battle over regulating cigars,” Garrett Rutledge wrote for Cigar Aficionado. “The United States Court of Appeals for the District of Columbia shot down the FDA’s appeal, which sought to overturn the 2023 ruling by Judge Mehta that ruled against the FDA’s application of the Deeming Rule on the cigar industry. The ruling spared the industry from a number of draconian regulations, but it did not fully remove the FDA’s ability to regulate premium cigars. H.R. 2111 aims to take that next step in excluding premium cigars from FDA regulation.”

    “Congressman Donalds’ leadership in introducing this bill is a victory for premium cigar manufacturers, small businesses, and the countless American consumers who appreciate these handcrafted products,” says Mike Copperman, executive director of Cigar Rights of America. “This legislation is not just about regulation, it’s about preserving an industry and ensuring that premium cigars are treated fairly.”

    Donalds introduced similar legislation during the previous Congressional session, and while it gained 13 co-sponsors, it stalled in the committee stage largely due to the election.

  • JTI Sees Shift to Cheaper Cigarettes Continuing

    JTI Sees Shift to Cheaper Cigarettes Continuing

    To combat decreasing volumes, many cigarette companies are forced to increase prices to keep the needed revenue margins. That, combined with continuously rising federal and state taxes, has made buying a pack of cigarettes in the United States quite expensive. As a result, many smokers are leaving traditional premium name brands and trading down to the value and super-vale segment of the market.

    Japan Tobacco International’s finance chief Vassilis Vovos said he expects pricier brands to continue losing ground even as affordability improves, and that the shift toward cheaper cigarette brands in the U.S. will top 42% of the market by 2027.

    JTI completed the acquisition of U.S. tobacco company Vector Group last year, which pushed its share of the super-value segment to 40% by the fourth quarter of 2024.

    “This is a hard trend and we see it continuing over time,” Vovos said, adding steep price increases will continue to push consumers to trade down, a trend visible in many markets where big price gaps emerge.

    Industry giants such as Altria and BAT hope the trend away from premium brands is temporary and will recede as economic pressures ease. BAT, which does not produce a product for either of the value markets, saw its U.S. volume fall 10.1% last year.