The big difference is Altria is the cigarette gorilla and not a handmade cigar company. The cigarette fight was over 45 to 50 years ago. Cigarettes and premium handmade cigars are comparable like apples and bananas. Only about 300 million handmade cigars are made per year vs 300 mil cigarettes just got smoked when you blinked your eye.
Here is the impact assessment:
The ruling establishes a predicate date of February 15, 2007 for products to be verified by the FDA.
There is a lot of gray area here – so here’s an easier breakdown.
- If a cigar blend/brand was on the market for sale before February 15, 2007, it is essentially “grandfathered” into the market.
- If the cigar blend/brand was introduced for sale on or after February 16, 2007 but before the effective date noted above (August 8, 2016), the cigar manufacturer has 2 years to keep the blend available for sale before it must be submitted to the FDA for testing of “substantial equivalence”; meaning that the cigar “has been found by the FDA to either have the same characteristics as a predicate tobacco product; or has different characteristics than the predicate tobacco product but the information submitted demonstrates that the new product does not raise different questions of public health [fda.gov].” The cigar may remain on the market for an additional year (until 2019) while the substantial equivalence testing is completed.
- If the cigar blend/brand is to be introduced for sale on or after August 9, 2016, it must be submitted for premarket substantial equivalence testing – meaning it cannot be marketed and sold until the testing application has been approved by the FDA.
There’s an interesting discussion of the legislation and the
why’s of the predicate date here at Cigar Coop’s website. What’s unclear: it would be logical to expect that the FDA would still want to test the grandfathered brands; how that would be done has not been specified. Neither has the inner workings of the testing process, including (a) the actual cost to the manufacturer for submitting his or her product; (b) how long the testing process will take; (c) what steps constitute the testing process; (d) whether a manufacturer has recourse to appeal or be exempted from the FDA testing process; and (e) what happens to a product’s ability to be marketed and sold if the testing process takes longer than a year. Additional questions are raised when we look at the standards dictated in the “equivalence” – what are the baseline metrics or benchmarks against which the affected cigars are being tested, and who selects them? That hasn’t been clearly defined either. As to what constitutes a product that’s to be tested, it’s still unclear to us if we’re talking about
a cigar brand, a blend, or each individual size/shape available in a line.
As for Cuban cigars, their future in America seems more cloudy, even as the doors to diplomacy are slowly being pried open. They haven’t been available for sale in the U.S. since 1961 – and no one is sure if the Cubans or their distributors have the resources to submit their cigars for FDA testing, or even would be willing to do so.
Many of the cigar makers in this business have generations of tobacco history in their family history. A family history that, if it went through Cuba, saw their fathers and grandfathers jailed, beaten and shot, with their livelihoods looted by Fidel Castro and his true believers. They were forced from their homes with nothing in their pockets, and rebuilt their businesses from scratch; don’t underestimate their willingness to figure out a way to do it again. And for those who maybe don’t have such a storied pedigree, like boutique cigar makers – they’ve built impressive businesses, and they’re not about to give them up that easily. And they all have one thing in common: premium cigar makers don’t target kids, and they don’t tolerate underage smoking.
