On May 5, 2016 the Food & Drug Administration (FDA) announced that it would begin regulating Premium Tobacco, including: cigars, pipe tobacco, e-cigarettes, and vaporizers. The FDA released a 499 page eyesore of a document outlining the specifics of the regulation. Lucky for you though, our intent at Big Six is to merely summarize how this regulation will affect you as the consumer.
Why the new regulation?
We can only speculate that since the FDA was given power and authority back in 2009 under the “Family Smoking Prevention & Tobacco act”, (signed by President Barack Obama) that the regulation appears to be a means to catch up with other tobacco products that have been previously regulated, such as cigarettes and smokeless tobacco. It’s quite clear that the excise tax, regulatory process, and approval fees for producing tobacco will also help funnel additional spending dollars into the government.
What does this mean to you, the consumer?
At Big Six We think it will mean a few things:
- Cost increase to the consumer over time. Because of the additional fees & taxes, we suspect the cost to produce a single cigar will rise. The manufactures will likely pass this cost down the buying chain, ultimately increasing the cost to the consumer. Expect price increases over the next two years as this regulatory process gets some momentum.
- Delay in products coming to Market. Now that every new Cigar needs to be submitted and approved by the FDA its likely you will see some cigars come to the market much later than what you have historically seen. Subsequently, you are likely to see special additions/blends and limited offerings, diminish as a result.
- Warning labels. Currently Premium tobacco and cigar manufactures are not required to put warning labels on their products. Going forward, manufactures will be required to slap various warning labels on their boxes. Like me, many of you probably admire and appreciate the artwork and craftsmanship put into the packaging of cigars. Unfortunately, going forward you will see a fat ugly label on each box that is distributed out. You will also see warning labels posted up at your favorite retail cigar and tobacco shops in accordance with the new regulation.
- Stricter age identification policies. Although virtually all cigar retailers have either posted or enforced age restriction policies, the FDA is now mandating stricter age identification. Online retailers will now be required to use E-verify (internet age identification software). Brick and mortar locations also must ask for identification for anyone that is suspected, in appearance, to be under the age of 26.
- No more freebies! Yes. You read that correctly. No more cigar samples. Manufactures have been handing out cigar samples to distributors, retailers, and consumers for many years as a means to entice the purchase of their brand. The belief was that the sight, smell, touch, and smoke of the cigar would keep you coming back. This is no different from any other industry. The proof is in the pudding as they say. Going forward, no consumer will be able to leave an establishment with any part of a cigar without first paying for it. Don’t worry though, you will still have the ability to handle, feel, and smell a cigar before purchase. The FDA has recognized this as an important part of the buying process, so the ability to intimately scrutinize your next smoke will remain unchanged.
What can we expect in the near future?
We believe as the cigar community continues to inquire and ask questions about the newly released regulation, it’s likely the some of the gray area that exists today will be filled with some context and color, making the policies more clear and defined. We should start seeing the details of the new regulation come into focus over the next few months. With that being said, it’s important to understand that many parts of this regulation don’t actually go into effect for months and in some instances years.
It also seems as though the FDA did a fairly good job of getting a comprehensive understanding of the cigar and premium tobacco manufacturing process and are sensitive to its rich history, thus why they have elected to grandfather certain products and allow additional time for manufactures to change their internal processes to adjust to the regulation.
The Big Six is committed to continuing to update the cigar community on the policies and regulations set forth by the FDA. As things change and evolve and detail comes into focus, we will make communicate accordingly. If anyone has any questions about the policies to date, please feel free to reach out to me.