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newsletter 102108-re do:Layout 1
OCTOBER 2008 In This Issue: WILL CIGARS BECOME A PART OF THE FDA REGULATORY SCHEME? WHAT IS IN THE NEWS? THE 2008 STATE CIGAR TAX RATES About Us C igar Rights of America was formed in April 2008 to meet the demand of cigar lovers across the United States for a voice in the debate over cigar rights for those who enjoy cigars for pleasure and not because of any addiction to, or dependence on nicotine. CRA is a membership organization dedicated to maintaining the personal freedom of individuals to enjoy cigars. Its activities are focused on education about handmade premium cigars, opposing unfair legislation such as excessive state and federal cigar taxes, overly restrictive smoking bans, cigar sales restrictions, and FDA regulation of cigars. The organization receives funding through membership dues, revenues from events and from sponsors. As of October 2008, sponsors include Arturo Fuente Cigars, Ashton Cigars, Camacho Cigars, CAO Cigars, Casa Fernandes Cigar, Corona Cigar Co., Davidoff/AVO Cigars, Diamond Crown Cigars, Don Pepin Garcia Cigars, Drew Estate/Acid Cigars, Fonseca Cigars, General Cigar Co., God of Fire Cigars, Graycliff Cigars, Humidipak, La Aurora Cigars, La Flor Dominicana, Oliva/NUB Cigars, Padilla Cigars, Padron Cigars, PROCIGAR, Prometheus, Rocky Patel Cigars, Tabacalera Perdomo, Tatuaje Cigars, Thompson Cigar Co., Torano Cigars, and Xikar. For more information, or to join, please visit www.CigarRights.org. Comments or questions may be emailed to info@cigarrights.org, faxed to (818) 541-6865 or mailed to Cigar Rights of America, 2222 Foothill Boulevard, Suite E122, La Canada Flintridge, California 91011. 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. A 1 tobacco and the sealing gum (usually gum tragacanth, a natural product) used to hold the cap together. In better machinemade cigars, the ingredients are generally short-filler tobacco with the wrapper made of natural leaf or homogenized tobacco leaf (HTL), a paper-like substance thatʼs made from the scrap tobacco, including leaf stems. (2) BE SUBJECT TO REGULATIONS prescribing “good manufacturing practices” that specify how cigars should be made, packed and stored. This potentially onerous regulation at least notes that historical manufacturing practices be taken into account and the financial resources of the makers be referred to when making any requirements. It would be a terrible thing, indeed, for small cigar makers to be eliminated as family cigar operations have been the lifeblood of new concepts in the industry for more than 100 years. (3) USE TOBACCO, especially foreign-grown, that (under sec. 907 (a)(1)(b)) “was grown or processed using a pesticide chemical that is not approved under applicable Federal law for use WWW.CIGARRIGHTS.ORG lthough the bill talks about “tobacco products” to incorporate all types of tobacco – cigarettes, cigars and pipe tobacco – the primary focus is on cigarettes and on trying to keep younger people from smoking. In sec. 901 (b), the bill states that “This chapter shall apply to all cigarettes, cigarette tobacco, roll-your-own tobacco, and smokeless tobacco and to any other tobacco products that the Secretary by regulation deems to be the subject of this chapter (emphasis added). That means an empowered FDA and a spirited director could turn the screws to cigar makers. The bill as passed by the House of Representatives (H.R. 1108) by a veto-proof 326-102 margin on July 30, 2008 runs almost 100 pages in length and while aimed at cigarettes and smokeless tobacco products, there is plenty for cigar smokers to get edgy about. If the FDA did extend the billʼs requirements to cigars, manufacturers would be required to: (1) DETAIL OUT ALL INGREDIENTS in their cigars, which for the premium market wouldnʼt be that difficult: generally, itʼs the OCTOBER 2008 ISSUE 1, VOLUME 1 in domestic tobacco farming and processing . . .” This could be a problem for some leaf growers in Central American countries who may be using chemicals not currently approved in the U.S.. (4) POTENTIALLY HAVE TO CONTROL THE NICOTINE content of cigars, reduce or eliminate other “harmful components” of their products. (5) SUBMIT NEW PRODUCTS AHEAD OF TIME in a process which could take up to six months (180 days) for approval or denial, similar to the process used for drugs in the U.S. (6) PAY FEES TO THE FDA to support its activities involved in tobacco control. The amount to be paid (and no doubt passed on to the consumer) would be based on a formula used in the 2004 bill for the termination of the tobacco quota; cigar makers were charged with 2.783% of the total amount of that fee, based on their share of the gross domestic sales total. This fee does not apply, however, unless the “class of tobacco products” being taxed is actually under FDA oversight; all cigars are lumped into the same category. In The News You will find news on legislative issues and anti-smoking movements affecting your personal freedom and rights to enjoy cigars. Get involved, learn about the Issues and take action! See the stories to these headlines and more at www.cigarrights.org/news.htm: LOS ANGELES SMOKING BAN: CRA delegates attend round table meeting. BOSTON SMOKING BAN: City's Director of Public Health doesn't want "anybody to smoke" DUTCH BAR OWNERS BANDING TOGETHER AGAINST SMOKING BAN ATLANTIC CITY MAY DELAY SMOKING BAN BY A YEAR SAN FRANCISCO PHARMACY SALES BAN DECISION COMING FDA OVERSIGHT LEGISLATION EXPECTED TO PASS IN 2009 ANTI-SMOKING GROUP ASKING FOR MORE TAXES ON TOBACCO INDIA TRIES SMOKING BAN AGAIN GENEVA SMOKING BAN MAY BE DELAYED UNTIL 2011 ILLINOIS SMOKING BAN UNENFORCEABLE IN COURT? PENNSYLVANIA COLLEGE SYSTEM CHANCELLOR HEARS BAN COMPLAINTS 2 In addition to these impacts on the makers and distributors of cigars, the bill also includes some troubling provisions for others. In section 906 (d)(1), the bill gives the FDA an opportunity to “require restrictions on the sale and distribution of a tobacco product, including restrictions on the access to, and the advertising and promotion of, the tobacco product, if the Secretary determines that such regulation would be appropriate for the protection of the public health.” This is amplified in sec. 906 (d)(4), which directs the issuance of regulations “to address the promotion and marketing of tobacco products that are sold or distributed through means other than a direct, face-to-face exchange between a retailer and a consumer in order to protect individuals who have not attained the minimum age established by applicable law for the purchase of such products.” In effect, who could sell cigars and how they are sold could be dictated by the FDA and all mail-order or Internet sales of cigars could be abolished. 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 rollyour-own tobacco products, or (B) requiring the reduction of nicotine yields of a tobacco product to zero” is not permitted under the Act. Congress reserved to itself the ability to ban tobacco products. In June, the International Premium Cigar & Pipe Retailers Association (IPCPR) circulated a note to the trade which stated that “As we have previously stated and discussed, cigarettes, RYO tobacco, and smokeless tobacco would be regulated immediately when FDA legislation is enacted; not cigars nor pipe tobacco. Once the legislation is enacted, then the process of the FDA getting geared up to regulate - and the initial, exclusive focus on cigarettes, RYO tobacco and smokeless tobacco - are likely to occupy the agency for two or three years minimum. “We do not foresee cigars and pipe tobacco being added to the legislation as Sen. [Edward] Kennedy and [Rep. Henry] Waxman will strongly resist any revisions or changes made in the legislation because such changes may undercut the primary purpose of giving the FDA ʻfullʼ jurisdiction over tobacco products. Even though the current bill is poorly drafted, the limited changes made to it so far have been adopted in the face of considerable resistance.” So the cigar trade is taking a pass on this bill, which will pass the U.S. Senate, but may be subject to a filibuster first, and a likely veto from President George W. Bush. There are more than enough votes to override such a veto in the House, but itʼs not clear whether 60 votes can be obtained in the Senate. Although cigars are not in the crosshairs of this bill, they are in range. One wonders, if this bill passes, what an activist President or FDA chief might do. It wonʼt be helpful to those who enjoy tobacco in its most natural forms, as cigars or in pipes, just like the Taino Indians who met Rodrigo de Jerez and Luis Torres in 1492. 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 ALASKA 75% of the wholesale price ARIZONA 13.0-44.1¢ per cigar NEBRASKA 20% of the wholesale price NEVADA 30% of the wholesale price 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 the wholesale price NORTH CAROLINA DELAWARE 15% of the wholesale price NORTH DAKOTA 28% of the wholesale price OHIO 17% of the wholesale price FLORIDA No tax 3% of the wholesale price GEORGIA 23% of the wholesale price OKLAHOMA HAWAII 40% of the wholesale price OREGON IDAHO 40% of the wholesale price PENNSYLVANIA No tax ILLINOIS 18% of the wholesale price RHODE ISLAND 40% of the wholesale price (cap of 50¢ per cigar) INDIANA 24% of the wholesale price SOUTH CAROLINA IOWA 50% of the wholesale price (50¢ per cigar cap) SOUTH DAKOTA KANSAS 10% of the wholesale price TENNESSEE KENTUCKY 7.5% of the wholesale price TEXAS LOUISIANA 8-20% of the manufacturerʼs price 12-36¢ per cigar 65% of the wholesale price (cap of 50¢ per cigar) 5% of the manufacturerʼs price 35% of the wholesale price 6.6% of the wholesale price 1.0¢ per cigar UTAH 35% of the manufacturerʼs price 41% of the manufacturerʼs price MAINE 20% of the wholesale price VERMONT MARYLAND 15% of the wholesale price VIRGINIA MASSACHUSETTS 30% of the wholesale price WASHINGTON MICHIGAN 32% of the wholesale price WASHINGTON, D.C. MINNESOTA 70% of the wholesale price WEST VIRGINIA MISSISSIPPI 15% of the wholesale price WISCONSIN MISSOURI 10% of the wholesale price WYOMING MONTANA 50% of the wholesale price 10% of the wholesale price 75% of the wholesale price (cap of 50¢ per cigar) 12% of gross receipts 7% of the wholesale price 50% of the wholesale price (cap of 50¢ per cigar) 20% of the wholesale price We Need You! CigarRights.org is a membership organization and we need your help and the help of your friends. Memberships are available for one year ($30), two years ($55), three years ($80), four years ($105) and lifetime ($500). You can join on-line at CigarRights.org, but please note: although Cigars Rights of America is a non-profit organization, contributions, gifts or membership dues are not refundable or transferable and are not deductible as contributions to a tax-exempt organization for Federal income tax purposes. Cigar Rights of America neither solicits or accepts membership from any person under 18 years. Thank you. 3 WWW.CIGARRIGHTS.ORG OCTOBER 2008 ISSUE 1, VOLUME 1 CRA MOMENTS hare your special moments with fellow cigar enthusiasts. Email us your photograph for CRA Moments to: S photo@cigarrights.org T hank you for sharing your CRA Moments with your fellow CRA members. Jeff, Tyler and Rob enjoy a smoke. This was the last great cigar smoking event held in Chicago on December 30th, 2007 — 2 days before the "illegal" laws of the State of Illinois infringed on all of us. The place was Gibson's Steakhouse in their elegant “State Room.” I've attached a picture of me (Bobby Thompson) enjoying a nice cigar at Jost Van Dyke, BVI! Trying to catch dinner. DeeDee Engels from Cigar Grotto, Inc. 4 WWW.CIGARRIGHTS.ORG ISSUE 1, VOLUME 1 TELL US WHAT YOU THINK We asked for it. We got it. CRA members give us their opinions and suggestions. Darren Barr writes: Dear Cigar Rights: My opinion on SCHIP is that I think it is a good program for low income families that need the coverage. I am strongly against using tobacco tax to fund this program. It is a bad idea. The number of smokers is declining because of increases already in taxes and places you can smoke. My self example I enjoy cigars very much. But with limited places I can smoke I only smoke a couple of times a week. The SCHIP should be an option to purchase for private insurance companies. The private insurance companies can set up a fund for low income families. If a family can't afford the SCHIP from private insurance companies than set up different charities where someone can contribute to a SCHIP fund. Using tobacco taxes for this is a bad idea. However SCHIP is not a bad idea used for the right reasons. Respectfully, Darren Barr August 26, 2008 =============================== Hob Cunningham writes: This country was established on the rights of the individual to own property. I am against ANYTHING that interferes with might right to do whatever I want with my property. That includes what color I am "allowed" to paint my house or whether I am "allowed" to smoke a cigar in my house or on my property. Heard Cigar Dave speak on this many times, and when they announced the organization today, I joined immediately. I am also a member of the NRA. I like a good steak with a very good single malt scotch. I am behind you 100%. Hob Cunningham Windcrest, Texas. August 23, 2008 5 =============================== William Rudowitz writes: I wonder why government focuses on smoking. I do not like cigarette smoke, at all, yet I understand that people want to smoke. I am glad that there is no smoking in public buildings, restaurants, theaters, the workplace, etc. However, to begin to ban smoking in homes, cars and other private places in an absolute infringement on our rights as citizens. Why is there no focus on alcohol? Why not tax the drink more and prohibit drinking in public places, similar to smoking? I wonder if anyone recognizes that alcohol-related deaths far and away outnumber smoking-related deaths. Combining deaths that occur from liver disease, heart disease caused by drinking, accidents that occur while persons are under the influence, violence that occurs when people are under the influence and all other alcohol associated illnesses. WWW.CIGARRIGHTS.ORG Alcohol is more accepted for two primary reasons: 1) many of the influential people in our society drink "sociably" and they see it as an appropriate way to engage in interaction at events and 2) they tried once with prohibition and failed so the government is afraid to try anything again. I am willing to do all that I can to prevent the ridiculous taxes that have been proposed and to limit the restrictions placed on smokers. William Rudowitz August 19, 2008 OCTOBER 2008 ISSUE 1, VOLUME 1 Tell Us What You Think continues. =============================== William Rudowitz writes: I attended the first Freedom Tour event in Manhattan the other evening and engaged in some good discussion around the smoking ban and tax related issues. The more I think about the taxation story, the more frustrated I get with the politicians in this country. The concept of taxing to provide health insurance for children is not necessarily, in and of itself, a bad thing. However, the plan as it is laid out is ridiculous. The current plan would put an end to the cigar industry as we know it and would therefore not raise any taxes and not be able to fund any health insurance or other cause. Then I look at how much money our government spend son the health and well being of illegal aliens and I am forced to wonder, if the government would stop spending all that money on healthcare for illegals and would take that money and spend it on healthcare for children, I am almost 100% certain that the bill would be paid in full. Also, what about the Social Security and Welfare payments that are made to relatives of immigrants who come here solely to take advantage of the good nature of our country and the loopholes in the system? Close the loopholes and strengthen the requirements to receive such payments, and the bill would be paid in full. Now, send all of the illegal aliens who are 6 in our prisons back to their countries of origin and the bill would be paid in full. Take all of the money our various layers of government pay to have programs and products translated to languages other then English and the bill would be paid in full. Finally, stop wasting so much time trying to take away the rights of smokers of fine cigars, who aren't hurting anyone and aren't asking for anything and I'll bet they could find a way to do all of the above and not only pay for SCHIP but also pay for the continuation of Social Security pensions, fund research for alternative energy sources and fix our infrastructure. You know why they don't do any of those things? It's because they would have to have guts to do it and attacking the small number of us smokers of fine cigars is easy. August 21, 2008 =============================== David Justice writes: Just thought someone should know about this. I found it on a cigar forum board. It was posted on 8/4/08. I booked a 7-day Caribbean cruise aboard the Carnival Valor cruise ship out of Miami, Fla. last week. I chose this ship, in large part, because it advertised on Carnival's web site a comfortable, fancy cigar bar that featured nightly live jazz. But my first night on the ship, as I was about to clip my cigar, I was told by the bartender that Winston's Cigar Lounge would no longer allow cigar smoking. I complained to our cruise director and learned that (starting last week), the Carnival corporate office had decided to test WWW.CIGARRIGHTS.ORG a new no-cigar policy on the Valor. If customer complaints aren't too high, they plan to enforce the new policy on their entire fleet. Cigar smoking is still allowed on open decks (starboard side only), but not in any bar or lounge or casino...not even the Winston Cigar Bar. I thought this was extremely disappointing, not to mention a tad dishonest. If I had known about the new policy, I probably would have sailed with another cruise line.... Smoking cigars on the open deck proved to be a not-sogood alternative. 1) It was windy, and 2) it was difficult to enjoy conversation with friends, since the open deck movie theater was playing every night. (I don't fancy having to watch Bee Movie with my cigar and cognac.) Other than this one issue, the rest of the cruise was great fun. Thanks, David Justice August 18, 2008 =============================== Brandon Schleeter writes: You asked for opinions, here is mine—as concise as I can articulate. There are few of us cigar "aficionados" who disagree with funding children and supporting programs that assist children. This is especially true of health care for children and the SCHIP bill. However, there are few (if any) other instances of private industry supporting unrelated programs like tobacco taxes supports SCHIP. Each US citizen is required to pay taxes. I pay mine annually. Why is a solitary private industry being singled out to provide that financial support? If you agree with SCHIP and the bill in its entirety, I ask only that you think of this- obesity is a terrifically important and continually rising concern amongst children in the USA. Is it acceptable to tax every fast food chain on the sale of their hamburgers to finance children's health care coverage? Brandon Schleeter June 10 , 2008 OCTOBER 2008
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