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Newsletter 102108-Re Do:Layout 1 OCTOBER 2008 About Us taxes, overly restrictive smok- Oliva/NUB Cigars, Padilla Ci- In This Issue: ing bans, cigar sales restric- gars, Padron Cigars, PROCI- igar Rights of America tions, and FDA regulation GAR, Prometheus, Rocky I WILL CIGARS Cwas formed in April 2008 of cigars. Patel Cigars, Tabacalera Per- BECOME A PART to meet the demand of cigar The organization receives domo, Tatuaje Cigars, OF THE FDA lovers across the United funding through membership Thompson Cigar Co., Torano States for a voice in the de- dues, revenues from events Cigars, and Xikar. REGULATORY bate over cigar rights for those and from sponsors. As of Oc- For more information, or to SCHEME? who enjoy cigars for pleasure tober 2008, sponsors include join, please visit www.Cigar- and not because of any addic- Arturo Fuente Cigars, Ashton Rights.org. Comments or tion to, or dependence on Cigars, Camacho Cigars, questions may be emailed to I WHAT IS nicotine. CAO Cigars, Casa Fernandes [email protected], faxed to IN THE NEWS? CRA is a membership or- Cigar, Corona Cigar Co., (818) 541-6865 or mailed to ganization dedicated to main- Davidoff/AVO Cigars, Dia- Cigar Rights of America, 2222 taining the personal freedom mond Crown Cigars, Don Foothill Boulevard, Suite I THE 2008 of individuals to enjoy cigars. Pepin Garcia Cigars, Drew E122, La Canada Flintridge, Its activities are focused on Estate/Acid Cigars, Fonseca California 91011. I STATE CIGAR education about handmade Cigars, General Cigar Co., TAX RATES premium cigars, opposing un- God of Fire Cigars, Graycliff fair legislation such as exces- Cigars, Humidipak, La Aurora sive state and federal cigar Cigars, La Flor Dominicana, CIGARS PART OF THE FDA REGULATORY SCHEME Have no doubt, the bill now in Congress to use the U.S. Food and Drug Administration as an oversight agency for tobacco products includes cigars. lthough the bill talks about “tobacco products” to incor- tobacco and the sealing gum (usually gum tragacanth, a natu- Aporate all types of tobacco – cigarettes, cigars and pipe ral product) used to hold the cap together. In better machine- tobacco – the primary focus is on cigarettes and on trying to made cigars, the ingredients are generally short-filler tobacco keep younger people from smoking. In sec. 901 (b), the bill with the wrapper made of natural leaf or homogenized tobacco states that “This chapter shall apply to all cigarettes, ciga- leaf (HTL), a paper-like substance thatʼs made from the scrap rette tobacco, roll-your-own tobacco, and smokeless tobacco tobacco, including leaf stems. and to any other tobacco products that the Secretary by reg- (2) BE SUBJECT TO REGULATIONS prescribing “good ulation deems to be the subject of this chapter (emphasis manufacturing practices” that specify how cigars should be added). That means an empowered FDA and a spirited di- made, packed and stored. This potentially onerous regula- rector could turn the screws to cigar makers. tion at least notes that historical manufacturing practices be The bill as passed by the House of Representatives (H.R. taken into account and the financial resources of the makers 1108) by a veto-proof 326-102 margin on July 30, 2008 runs al- be referred to when making any requirements. It would be a most 100 pages in length and while aimed at cigarettes and terrible thing, indeed, for small cigar makers to be eliminated smokeless tobacco products, there is plenty for cigar smokers as family cigar operations have been the lifeblood of new to get edgy about. If the FDA did extend the billʼs requirements concepts in the industry for more than 100 years. to cigars, manufacturers would be required to: (3) USE TOBACCO, especially foreign-grown, that (under sec. (1) DETAIL OUT ALL INGREDIENTS in their cigars, which for 907 (a)(1)(b)) “was grown or processed using a pesticide chem- the premium market wouldnʼt be that difficult: generally, itʼs the ical that is not approved under applicable Federal law for use L 1 WWW.CIGARRIGHTS.ORG OCTOBER 2008 ISSUE 1, VOLUME 1 L in domestic tobacco farming and processing . .” This could be In addition to these impacts on the makers and distributors of a problem for some leaf growers in Central American countries cigars, the bill also includes some troubling provisions for others. who may be using chemicals not currently approved in the U.S.. In section 906 (d)(1), the bill gives the FDA an opportunity to (4) POTENTIALLY HAVE TO CONTROL THE NICOTINE con- “require restrictions on the sale and distribution of a tobacco tent of cigars, reduce or eliminate other “harmful components” product, including restrictions on the access to, and the adver- of their products. tising and promotion of, the tobacco product, if the Secretary (5) SUBMIT NEW PRODUCTS AHEAD OF TIME in a process determines that such regulation would be appropriate for the which could take up to six months (180 days) for approval or protection of the public health.” This is amplified in sec. 906 denial, similar to the process used for drugs in the U.S. (d)(4), which directs the issuance of regulations “to address the (6) PAY FEES TO THE FDA to support its activities involved in promotion and marketing of tobacco products that are sold or tobacco control. The amount to be paid (and no doubt passed distributed through means other than a direct, face-to-face ex- on to the consumer) would be based on a formula used in the change between a retailer and a consumer in order to protect 2004 bill for the termination of the tobacco quota; cigar makers individuals who have not attained the minimum age established were charged with 2.783% of the total amount of that fee, based by applicable law for the purchase of such products.” In effect, on their share of the gross domestic sales total. This fee does who could sell cigars and how they are sold could be dictated not apply, however, unless the “class of tobacco products” being by the FDA and all mail-order or Internet sales of cigars could taxed is actually under FDA oversight; all cigars are lumped into be abolished. the same category. The one helpful section is 907 (d)(3) (A), in which “banning all cigarettes, all smokeless tobacco products, all little cigars, all cigars other than little cigars, all pipe tobacco, or all roll- In The News your-own tobacco products, or (B) requiring the reduction of nicotine yields of a tobacco product to zero” is not permitted You will find news on legislative issues and anti-smoking under the Act. Congress reserved to itself the ability to ban to- movements affecting your personal freedom and rights bacco products. to enjoy cigars. Get involved, learn about the Issues and In June, the International Premium Cigar & Pipe Retailers As- take action! See the stories to these headlines and more sociation (IPCPR) circulated a note to the trade which stated that at www.cigarrights.org/news.htm: “As we have previously stated and discussed, cigarettes, RYO tobacco, and smokeless tobacco would be regulated immedi- LOS ANGELES SMOKING BAN: CRA ately when FDA legislation is enacted; not cigars nor pipe to- delegates attend round table meeting. bacco. Once the legislation is enacted, then the process of the BOSTON SMOKING BAN: City's Director of FDA getting geared up to regulate - and the initial, exclusive Public Health doesn't want "anybody to smoke" focus on cigarettes, RYO tobacco and smokeless tobacco - are I DUTCH BAR OWNERS BANDING TOGETHER likely to occupy the agency for two or three years minimum. AGAINST SMOKING BAN “We do not foresee cigars and pipe tobacco being added to the legislation as Sen. [Edward] Kennedy and [Rep. Henry] I ATLANTIC CITY MAY DELAY SMOKING BAN BY A YEAR Waxman will strongly resist any revisions or changes made in the legislation because such changes may undercut the pri- I SAN FRANCISCO PHARMACY SALES BAN mary purpose of giving the FDA ʻfullʼ jurisdiction over tobacco DECISION COMING products. Even though the current bill is poorly drafted, the I FDA OVERSIGHT LEGISLATION EXPECTED limited changes made to it so far have been adopted in the TO PASS IN 2009 face of considerable resistance.” I ANTI-SMOKING GROUP ASKING FOR MORE So the cigar trade is taking a pass on this bill, which will pass TAXES ON TOBACCO the U.S. Senate, but may be subject to a filibuster first, and a I INDIA TRIES SMOKING BAN AGAIN likely veto from President George W. Bush. There are more than I GENEVA SMOKING BAN MAY BE DELAYED enough votes to override such a veto in the House, but itʼs not UNTIL 2011 clear whether 60 votes can be obtained in the Senate. Although cigars are not in the crosshairs of this bill, they are I ILLINOIS SMOKING BAN UNENFORCEABLE IN COURT? in range. One wonders, if this bill passes, what an activist President or FDA chief might do. It wonʼt be helpful to those I PENNSYLVANIA COLLEGE SYSTEM who enjoy tobacco in its most natural forms, as cigars or in CHANCELLOR HEARS BAN COMPLAINTS pipes, just like the Taino Indians who met Rodrigo de Jerez and Luis Torres in 1492. I 2 WWW.CIGARRIGHTS.ORG OCTOBER 2008 ISSUE 1, VOLUME 1 2008 STATE CIGAR TAX RATES (per the Federation of Tax Administrators Web site) ALABAMA 4.0¢ per cigar NEBRASKA 20% of the wholesale price ALASKA 75% of the wholesale price NEVADA 30% of the wholesale price ARIZONA 13.0-44.1¢ per cigar NEW HAMPSHIRE 19% of the wholesale price ARKANSAS 32% of the manufacturerʼs price NEW JERSEY 30% of the wholesale price CALIFORNIA 45.13% of the wholesale price NEW MEXICO 25% of the product value COLORADO 40% of the manufacturerʼs price NEW YORK 37% of the wholesale price CONNECTICUT 20% of
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