Tag: United States

  • 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.

  • Vapes Evading U.S. Import Duties

    Vapes Evading U.S. Import Duties

    Image: Gudellaphoto

    E-cigarette companies have imported hundreds of millions of dollars of disposable products from China into the United States without paying taxes and import duties, according to an AP report.

    Last week, U.S. authorities confiscated 1.4 million units of unauthorized single-use e-cigarette products at Los Angeles international airport, with an estimated retail value of more than $18 million. The products were mislabeled as toys, shoes and other items.

    Records show that the makers of disposable vapes routinely mislabel their shipments as battery chargers, flashlights and other items. Critics blame ineffective regulation. “The steps toward regulating disposables have been very weak, and that has enabled this problem to get bigger and bigger,” said Eric Lindblom, a former Food and Drug Administration official.

    Heaven’s Gifts, the parent company of Shenzhen iMiracle, which manufactures the popular Elf Bar and EB brands, previously described how it could help customers evade import fees and taxes, according to the AP report.

    The firm’s website reportedly advertised “discreet” shipping methods, such as mislabeling the content of e-cigarette shipments and declaring a low product value. 

    Another strategy appears to be shipping e-cigarettes by air rather than sea. Air carriers are not required to disclose the same level of detail about their cargo as ocean vessels.

    U.S. tobacco companies have complained that their vaping products cannot compete with such lower priced disposables. Altria Group and Reynolds recently filed cases in California and with the International Trade Commission, respectively, against importers of disposable vapes.

    Flavored disposables began pouring into the U.S. shortly before China banned vaping flavors last year. China’s vaping manufacturing sector, which produces the lion’s share of e-cigarettes worldwide, is worth an estimated $28 billion, and the U.S. accounts for nearly 60 percent of the country’s vape exports, according to the China Electronics Chamber of Commerce.

    Authorities have encouraged those exports while at the same time curtailing the country’s domestic vaping business.

  • 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.

  • White House Postpones Menthol Ban Decision

    White House Postpones Menthol Ban Decision

    Image: Marisela

    The White House has delayed its decision about whether to ban menthol cigarettes in the wake of fierce opposition from tobacco companies, retailers and other groups, reports The New York Times. The administration had originally planned to have the rule finalized by August 2023 and, later, signaled that the rule would come before the end of 2023. The government’s most recent Unified Agenda—a regulatory “to-do” list—suggests the final menthol rule is now expected in March 2024.

    The Food and Drug Administration officially announced its plan to ban menthol cigarettes in April 2022, citing public health concerns. Researchers say the cooling sensation of the menthol flavor makes it easier to start smoking and harder to quit. The FDA estimates that the menthol ban could reduce smoking by 15 percent in 40 years. Studies project that as many as 650,000 smoking-related deaths could be avoided.

    In recent months, dozens of groups have met with administration officials to discuss the proposal. Among other concerns, opponents of the measure cite job losses and aggressive police targeting of Black smokers, who tend to favor menthol cigarettes in the United States. An estimated 85 percent of U.S. Black smokers prefer menthol brands, according to market data.

    Critics, however, contend that tobacco companies are financing and fueling those fears. “They’re peddling stories—Big Tobacco is—that we’re going to go out and arrest African Americans if they use menthol cigarettes. But that’s not the case at all,” said Senator Richard J. Durbin. The FDA has said that the ban will be enforced at the manufacturers’ level, and not against individuals.

    Menthols account for about one-third of the U.S. cigarette market, according to the Federal Trade Commission. Reynolds American Inc. (RAI), which makes the market-leading Newport brand, earns about $7 billion from menthol cigarette sales a year, research by Goldman Sachs shows. RAI has vowed to fight the ban all the way to the Supreme Court, a battle that could postpone implementation of the final prohibition rule for years.

    Convenience store, gas station and wholesaler groups predict a loss of $34 billion in sales from menthol cigarettes and snacks and drinks purchased by customers. Some House Republicans have sent letters to the administration warning that the ban could have a disastrous effect on small businesses and that it could encourage cigarette smuggling that would benefit terrorist groups.

    Altria spokesman David Sutton said the company was also concerned about illicit sales as well as lost tax revenue and jobs.

    “We believe equitable harm reduction, not prohibition, is the better path forward and that the FDA should authorize smoke-free products and encourage adult smokers to transition to a smoke-free future,” Sutton said in an email to The New York Times.

    Public health groups were dismayed by the delay of the menthol ban. “This delay not only puts the rules at risk of never being finalized but also represents a significant victory for Big Tobacco’s well-documented exploitative practices, all at the expense of our nation’s public health,” said Kathy Crosby, CEO and president of Truth Initiative, in a statement.

    Public opinion polls have shown that about 60 percent of Americans favor banning menthol cigarettes.

  • Court Urged to Permit U.S. Graphic Warnings

    Court Urged to Permit U.S. Graphic Warnings

    Image: FDA

    The U.S. Food and Drug Administration urged a federal appeals court to let a regulation requiring graphic health warnings on tobacco packaging and promotions take effect, a year after it was blocked by a lower court, reports Reuters.

    On Dec. 5, FDA representative Lindsey Powell told the 5th U.S. Circuit Court of Appeals that the images on the proposed labels are necessary because text-only warnings failed to deter teenagers from starting to smoke. The labels would include 11 graphic images, such as diseased feet with amputated toes, to illustrate the risks of smoking.

    The tobacco companies that challenged the regulation have argued that the graphic labels violate their right to free speech under the First Amendment of the U.S. Constitution by compelling them to make emotionally charged, controversial statements rather than mere facts like existing written labels stating that smoking can cause cancer.

    The Family Smoking Prevention and Tobacco Control Act of 2009 instructs the FDA to create visual health warnings, but the D.C. Circuit in 2012 blocked the agency’s first attempt, saying that regulators had not convincingly demonstrated that the warnings would actually reduce smoking.

    In March 2020, the FDA released the final rule requiring new graphic warnings for cigarettes that feature some of the lesser known but still serious health risks of smoking, such as diabetes, on the top half of the front and back of cigarette packages and at least 20 percent of the area on the top of cigarette advertisements.

    R.J. Reynolds Tobacco Co., ITG Brands and Liggett Group filed a First Amendment challenge in April 2020. The rule was set to take effect in November 2023 after it was repeatedly pushed back by court.

    In a lengthy opinion issued Dec. 7, 2022, U.S. District Judge J. Campbell Barker of the U.S. District Court for the Eastern District of Texas vacated the FDA’s rule after finding that the required label statements and graphic images are not narrowly tailored to the agency’s interest in promoting public awareness of the health risks of smoking.

  • Menthol Ban Risks Alienating Voters: Poll

    Menthol Ban Risks Alienating Voters: Poll

    Photo: New Africa

    A majority of U.S. President Joe Biden’s core voter base opposes the administration’s proposed ban on menthol cigarettes and flavored cigars, reports National Review, citing a poll by Cornell Belcher commissioned by Altria.

    Biden’s core voter base is defined as minority voters or nonconservative white voters under the age of 45. Of this group, 54 percent oppose the proposed ban, with each battleground state showing a majority of opposition as well.

    “Candidates risk alienating base supporters in battleground states by taking up a cause that most voters oppose and don’t believe to be important,” according to the poll.

    Based on the poll, tobacco product bans are at the bottom of voters’ priority list when it comes to the U.S. Food and Drug Administration—opioid abuse, prescription medication and food safety are the top concerns.

    “Biden’s core voters are simply not comfortable with the idea of prohibition as a government approach to tobacco,” Belcher’s polling memo says. The majority of voters (74 percent) prefer a harm reduction approach.

    “With so many issues more pressing on voters’ minds—issues that voters actually agree with—these bans represent a very avoidable self-inflicted wound that could alienate base supporters in a battleground state,” the memo said. “Adult use of tobacco is far from a top-tier concern, and voters recognize there are more important matters for the president, Congress and the FDA to address. Candidates should not be taking up a cause that most voters oppose, that voters don’t believe to be important and that can get in the way of a campaign’s ability to mobilize supporters.”

    The poll was conducted from Sept. 17 to Oct. 10 among 3,021 likely voters in Biden’s “core coalition.” Roughly 600 voters per battleground state were included in the poll.

  • PMI Names U.S. Communications Officer

    PMI Names U.S. Communications Officer

    Photo: PMI

    Philip Morris International has appointed Travis Parman as vice president and chief communications officer of the U.S.

    “We are thrilled that Travis is joining us in our bold ambition to deliver a smoke-free future in the United States. We’re on a mission to replace cigarettes—the most harmful form of nicotine consumption—as soon as possible with science-based smoke-free alternatives that are a better choice than continued cigarette use,” said Stacey Kennedy, president of the Americas region and CEO of PMI’s U.S. business, in a statement. “With his passion for positive change and deep communications experience in the U.S. and internationally, Travis will be a valuable addition to our leadership team.”

    Parman joins PMI from AppHarvest, a tech-driven sustainable food company based in Kentucky, where he served as chief communications officer since 2020. He previously held multiple roles with the Renault-Nissan-Mitsubishi Alliance in Paris; Nashville; and Yokohama, Japan—most recently as vice president of international communications and global engagement.

    Prior to his work with the alliance, he held public relations and communications leadership roles at General Motors, Ally Financial and PulteGroup. Parman holds a master’s degree in communications management from the Newhouse School of Public Communications at Syracuse University and a bachelor’s degree in communications from the University of Tennessee.

    “Joining PMI at such a pivotal moment in the company’s journey toward a smoke-free future provides the perfect opportunity to drive meaningful change, which has been a hallmark throughout my career as a communicator,” said Parman.

  • FDA Prevails in Logic Challenge

    FDA Prevails in Logic Challenge

    The U.S. Food and Drug Administration has defeated Logic Technology Development after the e-cigarette manufacturer asked the courts to block the regulatory agency’s market ban on Logic’s menthol-flavored e-cigarette products, according to media reports.

    Logic filed a petition for review in the U.S. Court of Appeals for the Third Circuit, alleging the FDA violated the Administrative Procedure Act when it denied Logic’s premarket tobacco product application to market its menthol-flavored vaping products. The court denied that petition Thursday after concluding the FDA “based decisions on scientific judgments.”

    Logic alleged it was arbitrary and capricious for the FDA to apply the same regulatory framework to menthol that it used to remove fruit- and dessert-flavored e-cigarettes from commerce. The Third Circuit Court entered a stay on the FDA’s marketing denial orders (MDOs) in December 2022. The MDOs were the FDA’s first-ever MDOs directed at menthol e-cigarette products.

  • NJOY Sues Disposable Vapes Manufacturers

    NJOY Sues Disposable Vapes Manufacturers

    Photo: alexkich

    NJOY has filed litigation against 34 manufacturers, distributors and online retailers of illicit disposable e-vapor products that are unlawfully marketed and sold in California and other U.S. states. The suit alleges that these companies manufacture, distribute, market and sell products that violate California’s flavor ban law, are unlawful under federal law and subject to action by the U.S. Food and Drug Administration, and illegally compete against companies that comply with state and federal laws.

    The suit seeks a nation-wide injunction against the import, marketing and sale of these illicit products and significant compensatory and punitive damages.

    “These companies knowingly violate federal and state laws and need to be held accountable,” said Murray Garnick, executive vice president and general counsel of NJOY’s parent company, Altria Group, in a statement. “Today there are two markets—one for those who play by the rules and one for those who flagrantly ignore them. We are taking this action because the current state of the illicit e-vapor market is intolerable, and we must see more action from FDA and others.”

    Filed in the United States District Court for the Central District of California, the litigation is brought under four claims: unfair competition, false advertising, false advertising in violation of the Lanham Act and violation of the Prevent All Cigarette Trafficking Act of 2009.

    Named defendants in the suit manufacture and distribute illicit disposable e-vapor products which include  brands such as Breeze, Elf Bar, EB, EB Create, Esco Bar, Flum, Juice Box, Lava Plus, Loon, Lost Mary, Mr. Fog and Puff Bar. U.S. defendants include companies doing business in Arizona, California, Delaware, Florida, Michigan, Minnesota, New Jersey, New York and Texas. Foreign Defendants are all based in China.

    None of the Defendants has received premarket authorization from the FDA, according to NJOY.  

    Despite a ban on the sale of flavored tobacco products that went into effect in December 2022, flavored vapor products make up more than 97 percent of the California market according to a recent study commissioned by Altria.

    NJOY’s action against disposable vapor product manufacturers follows a complaint to the International Trade Commission by R.J. Reynolds Tobacco Co. charging multiple manufacturers, distributors and retailers of disposable vaping devices with unfair importation.

  • Major Tax Increase Introduced in Congress

    Major Tax Increase Introduced in Congress

    Credit: Roman R

    Last week, lawmakers in the U.S. introduced the CARE For Moms Act in Congress. That bill would increase healthcare for expecting and new mothers, while also exponentially increasing the taxes for vaping, roll-your-own, cigars and other tobacco products.

    The tobacco tax language in the CARE Act was copied and pasted out of the Tobacco Tax Equity Act, a bill that has been introduced as a rider in bills introduced in previous sessions of Congress but it failed to gain any traction, according to halfwheel.

    That could change after Sen. Ron Wyden and Sen. Dick Durbin have now introduced the Tobacco Tax Equity Act of 2023 in the Senate as a standalone bill, while Rep. Raja Krishnamoorthi introduced the bill in the House of Representatives.

    The tobacco tax-related language includes:

    • New taxes for e-cigarettes;
    • Doubling the tax on roll-your-own tobacco;
    • A more than 16x increase on pipe tobacco;
    • Doubling the tax on small cigars;
    • A massive tax hike for premium cigars;

    For premium cigars, the language removes the existing federal excise tax of 52.75 percent, capped at 40.26 cents per cigar, and replaces it with a weight-based tax of $49.56 per pound.

    Because it’s a weight-based tax, the difference between the existing tax and the new taxes would vary depending on how heavy the cigar is. For cigars robusto or larger, it would likely more than triple the current federal tax rate.