FDA Rules Negatively Impacts Cigar Consumers and Businesses
The Food and Drug Administration’s (FDA) new tobacco regulations would trigger many negative impacts to the American consumers and put cigar brands out of business. Similar to beer enthusiast enjoying their many craft brew beer selections, cigar aficionados enjoy their premium artisan cigar selections. Many of these artisan cigars come from small-businesses, that are on the losing end of this ordeal.
The FDA regulations put huge demands on the cigar industry to get their products approved. Any cigar put on the market since 2007 will have to prove it is “substantially equivalent” to products that have already been approved. These applications can be ruinously expensive and take hundreds of hours of paperwork. Because many producers won’t be able to withstand this regulatory onslaught, a large chunk of cigars on the market today will be withdrawn.
According to the Tax Foundation, FDA's new regulations would wipe out somewhere between 10 and 50 percent of these products as it will not be cost effective to put many of the products through review. The premium cigar industry is composed of some big players, but also many smaller businesses and boutique brands, many of which will likely disappear after the regulations is put into effect.
By the FDA’s own appraisal, many of these brands will shut down or see their offerings substantially narrowed (fewer size options, fewer blends, fewer pricing options). These new FDA regulations also include a ban on gifting cigars to American troops. These dire rules only creates dire consequences; American consumer and small business owner are on the losing side in this ordeal. The consumer will be presented with significantly fewer cigar options and pay much more to enjoy premium cigars, while the cigar small business owner will be squeezed out of the industry.