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Old 07-24-2016, 09:58 PM   #1
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News from IPCPR

Business as usual
The message to retailers and manufacturers from those in the know at the International Premium Cigar and Pipe Retailers is the new FDA regulations that take effect August 8, 2016 are not really the end.

“This is the very, very , very beginning of a very, very, very long process,” Barry Schaevitz from Fox Rothschild LLP told the over-full room at the Manufacturers FDA Seminar. “The FDA is just learning about cigars. There is as much the FDA knows about cigars as what they don’t know.”
Some of the FDA rules require manufacturers have to register their products before December 31, 2016, restrict companies from saying or implying that a product has lower risk or disease or is less harmful and free samples are prohibited.

The main three messages from the panel were 1) Business have to begin with compliance, starting the process of FDA registration; 2) The IPCPR has helped put in legislation to that would exempt premium cigars and 3)The IPCPR has combined with Cigar Association of America and Cigar Rights of America to file a lawsuit on July 15 and have been assigned a judge.

There are two bills currently in the house and senate and IPCPR has secured language in the Agriculture Appropriations bill for 2017. It would define premium cigars and exempt them from this regulation. The argument is the Tobacco control act was set up to combat the health effects from smoking and to keep minors from purchasing. Premium cigars fit neither of these.

The three cigar organizations filed a “Complaint for Declaratory and Injunctive Relief” of the FDA rules on the behalf of the industry using they best legal arguments they have come up with. They submitted nine challenges to major provisions of the bill, including: cigars look back 9 years and cigarettes only 2 and user fees are a tax which should have some benefit, these fees do not.
“The lawsuit shows we are not afraid to go to court if we don’t like the answer we get,” panelist Dave Clissold from Hyman, Phelps and McNamara said.

The FDA is requiring a premarket review and the filling out of a premarket tobacco application. Grandfathered products (those on the market on Feb 15, 2007) won’t have to go through the inspection process and cigars who meet the Substantial Equivalence Exemption (products that are substantially the same as a grandfathered one with minor changes) will not have to either. All others will have to submit a Premarket Tobacco Application.

IPCPR has put together an FDA Tool Box to answer questions and help with forms. “The FDA right now has 4,000 SE’s pending, filed by companies and the Cigar Industry will have an additional 10,000,” Schaevitz said, commenting that the FDA won’t get extra money to regulate and enforce their new rules. “How are they going to do it? I have no idea.”
IPCPR has put together an FDA Tool Box to answer questions and help with forms. They also had a panel of attorneys to present first thing at the convention.

Other items

• Manufacturers have to submit a cigar “Warning Plan” of how they will add labels that are similar to the ones already required on cigarettes. The panel speculated it will be required on the top and on the inside of the box but are awaiting further information from the FDA. Six different warnings are written to be on cigar products. They will be rotated.
• Branded items (like ashtrays) may not be allowed. They are not currently allowed for cigarettes. If they are allowed, they will have to have a warning label
• Currently, each pipe style will have to be vetted.
• Combining different blends of pipe tobacco will make it a new product and if retailers do this, they will have to file paperwork as a manufacturer.
• It’s not clear if a retailer takes a 5 lb. bag of tobacco and sells it in smaller quantities if that would be a “new” product.
• The new user fees the cigar companies will have to pay will be equal to their excise taxes. Totaling around $640 million for the whole tobacco industry.
• Vaping will not be included.
• The cost estimate for each cigar is estimated to be $200,000.
• Each vitola will have to be individually approved.
• The bill reads that natural variations do not make it a new product but it does not say what natural variations are.

What you can do
Contact your senators and representatives to support the "Traditional Cigar Manufacturing and Small Business Jobs Preservation Act of 2015" to help protect small business tobacco retailers.
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