Today the FDA announced it’s findings and finalized plans to extend its authority to all tobacco products, including cigars. This is the first ruling to be made based on the Tobacco Control Act of 2009, which would require several changes to the premium cigar industry.

Today’s rule changes come with provisions that are supposedly aimed at restricting youth access;
-Products are not allowed to be sold to persons under the age of 18 (both in person and online)
-Requiring age verification by photo ID
-Not Allowing the selling of covered tobacco products in vending machines
-Not allowing the distribution of free samples

The new rule also requires manufacturers of all newly regulated products to show that the products meet the applicable public health standards set forth in the law and receive marketing authorization from the FDA (Cigar & Spirits is currently seeking out what these so-called “applicable public health standards” are).

Products that were brought to market prior to February 15, 2007 will be grandfathered into the marketplace and will not be required to undergo the review process.

It is expected that manufacturers will continue to sell their products for up to two years while the FDA processes applications and reviews new tobacco product applications. If an application is approved, the FDA will issue an order granting marketing authorization; otherwise, the product will face FDA enforcement.

Other requirements include:
-Registering manufacturing establishments and providing product listings to the FDA;
-Reporting ingredients, and harmful and potentially harmful constituents;
-Requiring premarket review and authorization of new tobacco products by the FDA;
-Placing health warnings on product packages and advertisements; and
-Not selling modified risk tobacco products (including those described as “light”, “low”, or “mild”) unless authorized by the FDA.

These rules would go into effect on August 8th, 2016.

At this point, the outlook for the premium cigar industry is relatively bleak; albeit there are a few options that remain to overcome this ruling.

Congress has already passed language on Agriculture Appropriations FY17, in the House Appropriations Committee that would exempt premium cigars from the FDA regulations. However, it is unlikely that this will see a vote until before August 8th, 2016.

It is expected that we will see several law suits and legal actions on behalf of the cigar industry.

The final option would be that during congressional review, congress would release a finding that the FDA has overstepped their bounds and the power given to them by congress. If congress were to pass a resolution of congressional disproval, it would still come under scrutiny of the President, and could face a veto threat.

We will continue to update as more information comes available.

 

UPDATE: May 5, 2016 10:03 am

The IPCPR has issued a formal response and is currently reviewing the document released by the FDA:

“This morning, the Food and Drug Administration (FDA) released its final determination deeming additional tobacco products, including premium cigars, subject to its authority under the Tobacco Control Act.  IPCPR’s policy team is reviewing this complex determination (499 pages) and will provide a further update concerning its impact on retail tobacconists.  The FDA’s regulation of premium cigars if left unchecked, would have a devastating impact on retailers and manufacturers alike.  Consumers will have less choice.  Youth access is simply not an issue in the premium cigar space where 35,000 Americans earn their living along with over 300,000 employees in the Caribbean Basin.  Fortunately, the industry’s legislative strategy continues to be implemented, including language recently adopted by the Appropriations Agricultural Subcommittee disallowing any funding of FDA regulation of premium cigars and negating the arbitrary predicate date of February 2007, after which any tobacco product would be considered new, and have to go through an expensive and time consuming compliance process.  Bills H.R. 662 and S. 441, exempting premium cigars and pipe tobacco, continue to gain co-sponsors as we pursue a legislative solution to unneeded and harmful government intrusion.”

Source links:

Official FDA Press Release: http://www.fda.gov/NewsEvents/Newsroom/PressAnnouncements/ucm499234.htm

PDF of Full Text of the Regulations: https://s3.amazonaws.com/public-inspection.federalregister.gov/2016-10685.pdf