I thought some of you might be interested in reading this article I wrote for Scottsdale.com. It should shed some light on the new Cuban Cigar changes and FDA regulations. Let me know what you think. And, don’t be afraid to stand up for your rights to smoke a good cigar at a reasonable price!
October 19, 2016
By Daz Herring
As a cigar smoker, you may have been hearing news, both bad and good, about what is happening in the industry with regard to FDA regulation, and to the warming relations with Cuba and the world-famous Cuban cigar market. This mix of news is both exciting and concerning to the American cigar consumer.
On the one hand we can now bring Cuban cigars back into the United States, and do so legally. On the other hand, the FDA is tightening it’s control over the industry and, in essence, choking the it with new regulations and fees that seem designed to cripple both cigar manufacturers and retailers. So, how do we rejoice and mourn at the same time?
Let’s start with the exciting news, about Cuban cigars (and rum), that came out late last week. On Friday, October 14, the Obama administration announced a directive that would allow Americans to engage in more trade with the still-communist island. This included the news that American travelers can now bring back the same amount of Cuban tobacco and alcohol as they can from other countries. Additionally, the directive includes bringing back Cuban products from any other country where those products are legally sold.
So, Cuban cigars and rum are, in essence, back on the American menu. However, this doesn’t mean you can bring back as much as you want, as some articles on the subject would suggest. According to the United States Customs and Border Protection web-site, one can declare up to 100 cigars, before having to pay “duty.” So, if you’re in the Caribbean, Canada, Mexico, Europe or anywhere else in the world that has access, you can now purchase Cuban cigars and bring them back with you.
Unbeknownst to most American citizens traveling abroad, it had been a violation of the law to purchase Cuban cigars ANYWHERE. Even as others around the world can/could purchase- technically, as an American, you were ‘breakin’ the law!’ On March 16. 2016, the United States issued a directive that US citizens could purchase Cuban cigars while traveling abroad. And… the long-barred door was kicked open.
Since the warming of relations and change in regulations, you could bring in $100 of cigars, if you had traveled to Cuba on one of the very specific visas offered during that time. However, the cigars could not be sold then and cannot now. These new rulings impact cigars meant for personal use only. It is still illegal to sell Cuban cigars in the United States.
This would all seem like great news to the cigar industry, but here’s where we run into some problems. The cigar industry in Cuba may be world-renowned, but not for some of the reasons you might think. Sure, there are great factories and farms in Cuba that produce quality, premium cigars. Yet, since the US embargo in the early 1960s, the primary market of Cuban manufacturers has been Europe.
This leads us to the first problem: If the ban is completely lifted, who will supply all of these products to the United States? Cuba is a small island. There is no additional land available for tobacco production. They also are in the direct path of many Atlantic hurricanes. One strong storm could easily wipe out an entire year’s crop. Where would the enormous amount of cigars come from that the United States consumers would demand?
Another problem that arises is the quality of the current agronomy in Cuba. Let’s face it, Cuba is not a wealthy country and modern scientific advances in agriculture and cigar manufacturing have left the island behind. There are so many great products coming out of Nicaragua, the Dominican Republic and Honduras that are currently available in today’s industry. Can Cuban cigars prevail in this kind of open marketplace? Readers of international cigar review magazines have seen Cubans being listed less and less frequently. One good example is a well-known magazine that has a top 25 list in which only two Cuban cigars have been listed in the top five in the past three years. (That’s not two each year. That’s two in three years!)
Anyone that knows cigars knows that cigars produced in different countries will have different, inherent flavor profiles. Cubans are no different. They aren’t any better than cigars made in other countries. They just have a different taste.
In my opinion, the allure of smoking a Cuban is one of “the forbidden fruit.” As Americans, we can’t have them and that makes us want them even more. It’s much like what makes us crave all those delicious fatty foods, like double-bacon cheeseburgers and pizza when we’re on a diet. We know we can’t (or at least shouldn’t) have them, so we want them even more.
Many non-Cuban companies utilize the old-world Cuban traditional rolling techniques. If you were to lay a Dominican, Nicaraguan and Cuban cigar, of similar size and shape, next to each other, even a cigar expert would have a difficult time telling you which sample came from where. However, the tasting will tell the story and the American pallet has shifted to a more full-bodied profile. So, would Cuban Cigars really set American cigar store shelves on fire?
So, now that there is a way to purchase and enjoy Cuban cigars legally, when will we be able to buy them in our local brick and mortal cigar stores? The short answer is: no time soon! Aside from what I mentioned earlier, there are many other issues with bringing Cuban-produced cigars into the US marketplace.
First, there is the obvious issue of trade-mark. Following the embargo, many tobacco families left Cuba and established companies in other island nations (predominately the Dominican Republic and Nicaragua). They kept their family names, to identify themselves as being from the Cuban tradition of the finest cigar producers. How can we have boxes of cigars on the shelves of a cigar store with the same name, in some cases, the same logo, though they are being produced by different factories in different countries? If the ban is ever lifted there will be legal challenges and trade-mark infringement actions.
More importantly, how will Cuban manufacturers deal with the new Food and Drug Administration (FDA) regulations governing the cigar industry? Earlier this year the FDA published new regulations pertaining to the cigar industry. In the words of the FDA: “Tobacco use is the single largest preventable cause of disease and death in the United States. Since 2009, FDA has regulated cigarettes, smokeless, and roll-your-own tobacco. FDA finalized a rule, effective August 8, 2016, to regulate all tobacco products.” (http://www.fda.gov/TobaccoProducts/Labeling/RulesRegulationsGuidance/ucm394909.htm)
Strangely enough, in August of this year, the FDA published a study that indicates: “That consumption of up to two cigars per day, while not completely safe, is neither associated with significantly increased risks for death from all causes, nor smoking-related cancers.” (http://www.rstreet.org/op-ed/fda-study-cancer-risks-nearly-nil-for-1-2-cigars-per-day/)
Additionally, I have personally been involved with FDA-sponsored webinars that stated that these new regulations are aimed at stopping the marketing to and use of tobacco products by young people. How many times have you seen a 15 year old walk into your local cigar store and ask to buy a cigar? These new regulations are overreaching and stifling the cigar industry when the focus should be on highly-flavored tobacco products and the vaping industry.
Among the new regulations is what is being termed “the deeming rule.” There are too many aspects of this regulation to discuss in this article, so I’ll just touch on a few. One of the facets that many cigar smokers have already experienced is the death of the free sample. Cigar manufacturers and retailers can no longer give away tobacco products to their customers. From the outside this may sound like “no big deal.” From the inside- problematic. When a new cigar is being introduced, many consumers attend events where they get to know more about the product and are offered the opportunity to give it a try. How do you know if you like a new product unless you get to smoke it first?
This practice is a regular and prevalent mainstay in the food services industry. Think about it: when you walk through the aisles of your local grocery store, how often do you see someone handing out samples in order to promote sales of a new product? This can no longer be done in the cigar industry. So, gone are the days of the free sample. Retailers can’t even give you a free cigar on your birthday! In case you’re wondering, bundled deals (buy five, get one free) are still allowed, because the retailer is making a sale, not giving anything away for free.
Even more disturbing than losing our ability to hand out free samples is the FDA’s adoption of the “predicate date” for cigars. This date is set up to force cigar manufactures to scientifically test and analyze and submit the findings for all new products prior to them being placed for sale in the marketplace. According to the FDA, if a cigar was in regular production and has remained on retail shelves since February 15, 2007, it is “grandfathered” under this rule. (They will, however, have to change their packaging to reflect the new warning labels being inforced by the FDA.) If a cigar was manufactured and available to retailers from the February date through August 8, 2016, the company has a three-year window to have the cigar tested and to submit the regulated paperwork. If a manufacturer wanted to offer a new product after August 8, they may not sell the product until it has completed the FDA approval process.
You may think this doesn’t create a huge problem that will impact the average cigar smoker. If so, please continue reading. This is a very complicated regulation, so I am going to pair it down to the bare minimum of facts. According to the FDA website, the least expensive approval process would cost the manufacturer between $3,500 and $22,700. That cost is not, however, per brand. It is per cigar in the line. (If a company had a line that came in a Robusto, Toro, Churchill and Gordo, and each cigar was available in both a Habano and Maduro wrapper, the cost to keep that cigar in the market would be as high as $181,600, for one label!) If a company wants to bring a new product to market, they will have to spend between $117,000 and $466,000, per cigar. And, assuming the companies want to keep the product on the shelves, who will pay for this increase in production cost? We, the consumer, will!
If Cuban cigars are to enter the US marketplace, they will be required to go through the same approval process as all other newly available tobacco products. These costs will be crippling to some companies. As I mentioned before, Cuban cigars are in high demand around the world, where the FDA has no authority. Why would manufacturers want to pay so much to bring their products to the United States, when they are already able to sell them around the world without any government interference? Even if they do decide to market to the US, these already pricey cigars will cost even more, making them out of the reach of the majority of American cigar enthusiasts.
Many Dominican and Nicaraguan manufacturers have raised their prices over the past few months, citing the new FDA rules as the cause. This trend will continue for some time, as the reality of the “deeming rule” settles in on the industry. However, It isn’t too late to change these regulations. There are currently law suits, in at least two courts, dealing with this infringement of free commerce and there is a possibility that the FDA could lose part of it’s budget, if they persist in this type of regulation overreach.
There are organizations actively spreading the word and encouraging people to contact their legislators. Some notable examples are: www.savetheleaf.org, Cigar Rights of America: www.cigarrights.org, and IPCPR (International Premium Cigar and Pipe Retailers). IPCPR maintains a legislative issues website, which can be found at www.ipcprlegislative.org. These are only three of the many organizations fighting for the rights of cigar smokers. They are all quality organization that are looking out for our rights. I encourage you to visit their websites and join the fight. You need to exercise your right to be heard, as you may already be finding it more and more difficult to not only sit back and enjoy a good cigar, but to purchase quality cigars at reasonable prices.
From the cigar boom of the mid 1990’s, to the birth of the boutique cigar movement in the 2000’s, the cigar industry has always looked forward, while still holding onto the traditions of the past. Now, we have an outlet for purchasing Cuban cigars coupled with a clamp-down on governmental regulations.
Where is the industry heading? Hopefully it will continue to grow and thrive and the proud traditions of cigar production and smoking will be safe for generations to come. So, pull that cigar out of your humidor, stop by that brick and mortar tobacconist, even order on-line. Light it up and don’t give up your right to enjoy a good cigar with good friends!
Daz Herring is a cigar reviewer and has been involved in the premium cigar industry for several years. His blog, “The Smoking Gun Cigar Review,” can be found at https://thesmokinggunsite.wordpress.com/, Facebook and Twitter. In addition to his cigar interests, he is a professional musician, composer and director, having lived, traveled and performed around the world.