The FDA's Premium Dilemma

Mixed reactions to proposed cigar segment exemption

WASHINGTON -- Much of the attention surrounding last week's proposed deeming regulation announcement has centered on the electronic cigarette segment, but it wasn't just the nascent high-tech products that the U.S. Food & Drug Administration (FDA) was proposing to regulate. In fact, perhaps the greatest question of the 75-day comment period hangs over a different segment altogether: cigars. J Glynn Loope Cigar Rights of America (CSP Daily News Convenience Stores)

More specifically, will the FDA choose to include or exclude cigars it defines as premium?

The proposed regulations include two options for the cigar segment: one that applies regulations to all cigar products and one that would "exclude from the scope of this proposed rule certain cigars that we refer to as 'premium cigars'." The agency went on to say it was specifically seeking feedback on this issue during the commenting period.

It's something premium cigar manufacturers and retailers have been lobbying for, recruiting more than 150 members of Congress to voice their support for a premium exemption due to the fact that the price point of higher-end cigars is prohibitive to young smokers and ensures that they are an occasional--not habitual--purchase.

The message has clearly reached Mitch Zeller, head of the FDA's Center for Tobacco Products (CTP).

"The message that the premium cigar interests have tried to deliver is that there are differences between products that sell for upwards of $8, $9, $10, $11 apiece and are not sold in packages, kept in special climate-controlled facilities and that the consumer--and they say it's only adult consumers--come and buy one, two, three at a time," Zeller said during a Dec. 2013 CTP webinar. "We have gotten the messages that there may be differences when it comes to premium cigars versus other cigars, and the message is that FDA needs to take that into account into figuring out how they should be regulated."

J. Glynn Loope, executive director of the premium cigar manufacturer and consumer group Cigar Rights of America, expressed optimism over the exemption option.

"It appears that two years' worth of education work has paid off to a degree because it does seem that [the FDA is] recognizing the difference between premium cigars and e-cigarettes and mass-market products," he told Cigar Aficianado magazine. "This public comment period is going to be critical to further drive that point home."

"The FDA's request for comment on a possible exemption for premium cigars is a clear reflection that the agency recognizes the unique nature of the category," a spokesperson for Fort Lauderdale, Fla.-based Commonwealth-Altadis Inc. told CSP Daily News. "This position also correctly recognizes that 'one-size-fits-all' approach is not appropriate for the cigar category of products. We look forward to working with the FDA in developing a rational science based approach to any regulation of these products, one that takes into account the differences between and among various products."

Mary Szarmach, vice president of trade marketing and government relations for the Boulder, Colo.-based Smoker Friendly, expressed concerns over how the FDA might intend to define which products fit its definition of "premium."

"The option on premium cigars that included a minimum retail of $10 doesn't make much sense," Szarmach, who also serves as president of the National Association of Tobacco Outlets Inc. (NATO), told CSP Daily News. "There was no thought put into the different tax rates at the state level that make up retail pricing; and there are literally thousands of excellent hand-rolled cigars that are below that retail price, and they are used by adult consumers. We need to work with the FDA on the definition of premium cigars for sure."

There is a lot at stake for cigar manufacturers who produce products that could be deemed as premium: under the proposed regulations, manufacturers would be subject to FDA factory inspections

"The regulatory process has now begun in earnest," Dan Carr, president of the Richmond, Va.-based General Cigar Co., told Cigar Aficionado. "We are hopeful that Center for Tobacco Products will make scientific-based decisions that will allow adult consumers to continue to responsibly enjoy premium cigars."

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