Source: http://thehill.com/blogs/regwatch/lobbying/294425-cigar-makers-threatened-with-regulations
By Kevin Bogardus and Julian Hattem – 04/17/13 09:33 AM ET
Cigar makers are trying to snuff out an effort by the Food and Drug Administration (FDA) to regulate their products for the first time.
The FDA said in its regulatory agenda for the year that it would propose rules in April to expand federal oversight of tobacco products under the Family Smoking Prevention and Tobacco Control Act. The news was welcomed by tobacco giants such as Altria that want all tobacco products to be brought under the same regulations.
Sellers and makers of premium cigars — often hand-rolled, slow-burning and made with aged tobacco leaves — say the FDA is overreaching, and are hiring lobbyists to fight back.
Glynn Loope, the executive director of Cigar Rights of America, said the FDA's move is “a classic case of going beyond congressional intent.”
“When Congress passed the original Tobacco Control Act, it was really to address two primary points: youth access to tobacco and chemical addition. Premium cigars don't meet that criteria,” Loope said.
Another trade group for cigar retailers and manufacturers agreed that the FDA is distorting the law.
“It's our belief that the act was to prevent youth from smoking and curtail the health effects for youth,” said Bill Spann, CEO of the International Premium Cigar & Pipe Retailers Association.
“Premium cigars are sold at adult-run stores. You have to be over 18 to enter and if you look under 27, we are going to card you. … The average cigar smoker might smoke one to two a week, to one to two a month.”
Spann said FDA meddling could have a devastating impact on cigar shops. The group has warned that regulators could ban walk-in humidors and seasonal cigar blends, restrict store advertising or even place graphic warning labels on the ornate cigar boxes that are coveted by collectors.
The International Premium Cigar & Pipe Retailers Association already has top K Street firm K&L Gates on its team to lobby on the rules, but registered its own in-house lobbyist to focus on federal issues this year.
The pushback against FDA rules is also coming from overseas.
In February, the Cigar Rights of America organized a letter from the ambassadors of the tobacco-growing nations Honduras, the Dominican Republic and Nicaragua to officials at the White House, State Department and the FDA, warning that new regulation would threaten thousands of jobs and “raise the specter of political and economic consequences within our region.”
On Capitol Hill, some cigar groups are supporting legislation from Rep. Bill Posey (R-Fla.). Backed by 58 co-sponsors, that bill would exempt “traditional large and premium cigars” from FDA regulation.
Sens. Bill Nelson (D-Fla.) and Marco Rubio (R-Fla.) advocated for similar legislation in 2011. That bill is expected to be introduced in the upper chamber again this Congress.
“Yes, I expect that we will reintroduce this legislation soon,” said Alex Conant, a spokesman for Rubio.
But not all cigar producers are on board with that legislation. Some argue it favors foreign cigars over comparable products made in the United States.
“It's our position that no cigars should be regulated, and not exempt hand-rolled cigars that are the most expensive and that are largely made outside the U.S.,” said Marc Scheineson, a partner at the law firm Alston & Bird and a former FDA associate commissioner who has lobbied for Cheyenne International, a maker of little cigars.
“Why would you penalize domestic manufacturers by putting them within the regulations and exempt foreign made products?” Scheineson said.
Scheineson added that he does not oppose the bill, but supports exemption of oversight for all cigars, not just premium brands.
Cigar companies are going up against tobacco giant Altria, the parent company for Philip Morris USA, which backs expanded FDA oversight and opposes Posey's legislation.
“We believe cigars are a product that are made for adults, have health issues related to them and have tobacco. We believe the FDA asserting its jurisdictional authority over them is appropriate,” said David Sylvia, a spokesman for Altria. “We are on the Hill telling lawmakers that we are opposed to any kind of carve-out for a sub-category of premium cigars.”
Sylvia noted that Altria owns companies that make cigarettes, cigars and smokeless tobacco, so the company would be affected by the rules as well.
Some cigar advocates suspect cigarette companies are pushing for the regulation in order to reduce the fees that they pay the government.
“This whole mode of regulation is paid for by user fees, and industry pays, and it's a set amount of $700 million a year, which is a huge amount,” said Scheineson. “And it's divided by the categories and manufacturers that FDA regulates. So if cigar manufacturers would be regulated, they would share in that cost and reduce the cost to cigarette manufacturers.”
Electronic cigarette companies are also gearing up for the new FDA rules. Earlier this month, Shockey Scofield Solutions registered to lobby for NJOY, a company in Arizona that manufactures e-cigarettes.
John Scofield, with the lobby firm, said e-cigarettes are hurt by a deadline in the Tobacco Control Act that says new tobacco products introduced after Feb. 15, 2007, must have prior approval from the FDA before being released to the market.
E-cigarette companies would need that prior approval if the FDA acts to regulate them, potentially putting the entire industry in limbo.
“Given the substantial but typical delays in the FDA proposing new regulations under the act, we are confident the FDA and Congress will be able to come to a common-sense solution to provide relief from this arbitrary deadline,” Scofield said.
Other electronic cigarette makers are turning to lobbyists. Ballantyne Brands, an e-cigarette manufacturer in Charlotte, N.C., hired the Smith-Free Group earlier this year, according to lobbying disclosure records.
Electronic cigarettes typically vaporize nicotine without producing smoke. The products are growing in popularity despite warnings from federal officials they are untested and potentially dangerous.
Public interest groups are pressing the FDA to take a firm line on new regulations for both cigars and e-cigarettes.
“The American Lung Association would oppose any weakening of the Tobacco Control Act,” said Erika Sward, assistant vice president of national advocacy for the group. “As we have learned from the tobacco industry over the years, when you give one company or one product an inch today, the rest of the industry will exploit that tomorrow.”