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Cigars Won’t Hurt You, But The FDA’s New Cigar Tax Will

Cigar tax could be painful

 

Cigars seem to be the antithesis of the modern age. They have come to represent unashamed masculinity, opulence, luxury and these finely rolled tobacco sticks have even become integrally linked with the capitalist ideals.

 

So it’s no surprise to learn that cigars are under attack.

 

New regulations will make it harder to sell cigars and more expensive to buy them. The more things change, the more they stay the same…

 

That’s why we’re dedicated to saving you money and finding the best cigars at the best prices. In the end, we’re going to bring you our own brand of Dominican cigars and take on the US red tape ourselves.

 

But we know it won’t be an easy task…

 

Even though the Food and Drug Administration admits there are almost no health risks to smoking two cigars a day, it has decided to lump in the cigar industry with grimy old cigarettes.

 

In the end, you the consumer will pay. The Deeming Rule is effectively the FDA’s power grab for the cigar industry and it will result in higher prices. How much higher? We’re really not sure rright now.

 

What is the Deeming Rule?

 

Well, as always, it’s about money. Now the FDA will demand ‘user fees’ for cigars. Really, it’s just another luxury tax and it will put 9% of the costs that Big Tobacco used to pay on to the smaller manufacturers.

 

So that means the cigar industry as a whole will have to pay something like $600 million next year. That sorta sucks, because the consumer will end up paying.

 

In some instances, the costs will be too high to bear and we think this might spark a period of consolidation in the cigar industry. The big players will buy the smaller ones, which could be good for the industry in the long run. We will lose some boutique brands along the way, though, which is a shame in its own way.

 

Big tobacco could even end up buying the brands it is forcing into a hole right now, which would be a travesty.

 

FDA approval also creates new problems for the cigar industry, which constantly reinvents itself with new blends cooked up in the tobacco storerooms of rural operations.

 

If the FDA gets its way, every product will need approval and that could take up to three years.

 

Every cigar box will have to carry government warning labels and there is a minefield of legislation that will put smaller companies out of business.

 

These are tough and dark times in the tobacco industry and it remains to be seen whether the traditional, boutique, handrolling cigar specialists survive this onslaught of legislation and taxation.

Source

http://thefederalist.com/2016/10/05/cigars-wont-hurt-fdas-new-cigar-tax-will/

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