CigarCraig's Blog

This came to me via the folks at J.C.Newman, written better than I ever could! Great speech, I tried to embed the video, but it was gikving me fits technically. so click the link in the article to go to the speech or the fine folks at J/C. Newman went to the trouble of transcribing it at the end of the piece. Fingers crossed that this makes a difference, the FDA comment period ended yesterday, I left mine, and the IPCPR/CRA left a 500+ page comment. Considering the FDA’s own studies show zero, I repeat, ZERO percent of children interested in premium cigars, perhaps they’ll at least get off that particular piece of the regulations…

 

In an 11-minute speech, Sen. Marco Rubio called for Congress to save Florida’s premium cigar industry – including J.C. Newman Cigar Co. in Tampa – from FDA’s excessive regulations.

 

Yesterday, Sen. Marco Rubio (R-FL) gave an impassioned speech on the floor of the United States Senate about the urgent need to exempt premium cigars from FDA regulation. His speech can be viewed here, https://www.c-span.org/video/?c4742275/sen-rubio-cigar-speech-july-26-2018 , and a full transcript is below.

 

Sen. Rubio noted that the premium cigar industry “is on the verge of extinction” because of excessive and costly FDA regulation that “was never intended to apply to premium cigars.” Exempting premium cigars, Sen. Rubio said, would “free up the FDA to go after what they intended to go after, what everybody thought this was about, which is common tobacco products like cigarettes.”

 

Sen. Rubio cited J.C. Newman Cigar Company, a four-generation, 123-year-old family business in Tampa. He explained that FDA regulations are projected to cost J.C. Newman’s historic Ybor City cigar factory $30 million – more than three times its annual revenue.

 

Legislation to exempt premium cigars from regulation was introduced by Sens. Rubio and Bill Nelson (D-FL) and Reps. Kathy Castor (D-FL) and Bill Posey (R-FL) and has been co-sponsored by more than 160 Members of Congress. Earlier this year, the House of Representatives included the exemption in a FY 2019 budget bill. Senator Rubio spoke yesterday while the Senate was considering companion legislation. When Congress finalizes the FY 2019 budget later this year, Senator Rubio said, “we’re going to be fighting for this. . . this needs to get fixed because this is the last chance.”

 

“We are extraordinarily grateful for Sen. Rubio’s leadership and support of Florida’s historic premium cigar industry,” said Eric Newman, president of J.C. Newman. “As Sen. Rubio noted, this is truly a bipartisan issue and one that Congress urgently needs to solve.”

 

“Our family has been proudly hand crafting, all natural premium cigars for more than a century,” said Bobby Newman, executive vice president of J.C. Newman. “Like Sen. Rubio explained, our premium cigars are nothing like cigarettes.”

 

“The premium cigar industry is an important part of Florida’s cultural heritage,” said Drew Newman, general counsel of J.C. Newman. “We sincerely appreciate Sen. Rubio bringing this important issue to the Senate floor and for fighting to save our historic industry.”

 

Transcript
In my home state of Florida, we have a rich history in manufacturing, hand-rolled premium cigars. And for those who aren’t familiar with it, a hand-rolled premium cigar is not the same thing as a cigarette.

 

Number one, they’re an expensive product, and they are consumed very differently from a cigarette or some other tobacco product. I would say they’re more like wine than they would be like a cigarette, for sure.

 

The interesting thing about the cigar industry and its history, not just in Florida, but in this country, is that almost exclusively, the manufacturers of premium, hand-rolled cigars are small, family-run businesses.

 

By the way, so, too, are the retailers that sell it. This is not the kind of thing you go and buy at 7-Eleven. There are stores that specialize in the sale of premium cigars. They cater to a clientele that can afford to buy these things and they’re significantly older than someone who would walk into a convenience store and buy a pack of cigarettes from behind the counter.

 

And the companies that are involved in this endeavor are not the big companies that we see involved generally in the tobacco industry. They’re family-owned businesses, both at the retail level and also at the manufacturing level. They are, in addition to all this, they represent a rich part of the cultural history of the Cuban community in Florida.

 

Ybor City in Tampa is an example of it. It was a city that — an area that was settled over a hundred years ago by Cubans that came to Tampa to start a very vibrant hand rolling cigar industry, which again these are hand-rolled, premium cigars. These are people literally sitting down and rolling it the leaves and these are high-end products.

 

This industry is on the verge of extinction. I’ll tell you why. In 2016, the previous administration, they finalized the rule based on a 2009 law that, by the way, it’s intended — its intended target was not premium cigars. They meant to go after tobacco products that were mass produced. But this law was interpreted that would require premium cigars to regulate the manufacture, the import, the packaging, the labeling, advertisement, promotion, sale, and the distribution of their products. And with each new product, they’d have to do it over again.

 

So from year to year, the premium cigar industry may change the blend inside the hand rolled cigar. They come in boxes of eight or 12. Every time that one of these things was changed, you’d have to redo the labels, redo the packaging, redo — everything would have to be completely redone which is simply cost prohibitive because these blends change constantly, especially as you bring new markets.

 

Now, I’ve offered an amendment to the minibus that’s before us that would exempt premium, hand-rolled cigars from the FDA regulation, not just so the industry can survive but so it can thrive and also to free up the FDA to go after what they intended to go after, what everybody thought this was about, which is common tobacco products like cigarettes and some of the other things that we are aware of.

 

Now, any time you talk about this, it gets a little tricky because people talk about tobacco use and causing cancer. I’m as sensitive to that as anyone. My father was a lifelong smoker. He lost his life in his early 80’s because of cigarette smoking. We need to do everything we can to discourage people from smoking and consuming tobacco, especially cigarettes that are consumed in mass quantity and are cheap to buy in large quantities. I would note that it is already illegal to sell tobacco products to anyone who is under the age of 18. I would also tell you that beyond that, that the numbers have continued to decline in tobacco use. So we know that the laws that are in place and the programs have worked.

 

But one of the things that we’ve focused on that’s brought to bear some of these issues is that tobacco is a legal product and small — tobacco is a legal product and small manufacturing of cigars is being harmed by this but the regulations were not intended for them. The regulations were designed to target cigarettes for flavored, fat cigarettes and other commonly used tobacco products, the kinds that could potentially be marketed to young people, that are not like a premium cigar five, eight, $10 each one, $80, $90 a box but the sort of flavored fat cigarettes, all the new stuff that’s coming out that you can buy if behind the counter and they’re very cheap to buy and they’re manufactured, mass manufactured. That’s what the rule was about.

 

It was never intended to apply to premium cigars but the way it was written and the way the rule was interpreted, that’s would it’s now doing. It’s putting the same requirement on a completely different product and it’s a requirement they simply can’t meet.

 

And here’s the irony of it. All of the things that were targeted under this new rule are going to survive. They’re still going to be around. A little bit more expensive, a little harder to bring to market. But they are still going to survive. All the mass-produced tobacco products will continue — continue to be more accessible. But the premium cigar manufacturers are going to get wiped out. One more irony in all of this — it is still illegal to mass-import Cuban cigars, but you can bring them in on an individual quantity. Those are not impacted by these regulations at all. None whatsoever. So you just think about that for a moment. A product made in another country doesn’t have to meet the same guidelines but has all the same attributes.

 

Now, I talked a little moment ago about Tampa and in particular Ybor City. And today after all these time there’s only one factory left, a company called J.C. Newman. It is within the area and is known as Cigar City. They’ve been making premium cigars — not cigarettes, not flavored cigarettes, not JUULs so people can vape. I’m talking about premium, expensive, handmade cigars. They’ve been making them since 1895 and that’s going to come to an end in the very near future in this rule goes through. They’re a profitable company. They sell about $10 million worth of product annually. That sound like a lot of money. It is nothing compared to the mass-produced tobacco products. It is going to cost them three times that amount just to comply with the FDA regulations. Three times just as much — upwards of $30 million to comply with the way this rule has been interpreted.

 

The sad part about it is that everyone knows this. You go to the FDA and they say, look, we get it. The law was supposed to go after these guys, but that’s the way it was written. Everyone admits it. But yet that’s the way it’s going to be. And not just J.C. Newman, it’s going to put other retailers, and then the specialty cigar stories, it is going to put them out of business all because of a stupid regulation that was written as a result of a law that was not properly drafted and interpreted inappropriately. The federal government is going to put these guys out of business. And the irony is the people that they were trying to impact by the regulation are going to survive and remain in business and be as — survive and remain in business and be as successful as ever and the people that it was not meant to harm are going to get wiped out.

 

This is the epitome of government overreach abuse. Regardless if the business is 100 years old, this represents the livelihood of hundreds of American families. There are people that work in the factory, own those retail stores and they are going to be out of work not because the market shifted, not because Americans no longer wanted to smoke premium cigars. They’re going to be out of business because no one can stay in business if the cost of following the law is three times as much as what you can make. You can’t do it. That is legal product made by a hardworking Americans who have been designee it for a very — doing it for a very long time, not the intended target of this rule. And it is unjust for them to be singled out, just unfair, it’s wrong.

 

Here is the worst part about this rule. It is written retroactively. Not only will they have to start complying moving forward. You could argue just don’t change your blend in the future. They will have to go back and relabel, repackage everything they have been making for the past 11 years. That explains the cost for just this one business. By the way, they’ve broken no laws and yet they’ve been singled out and this threatens their livelihood.

 

This is a bicameral and bipartisan issue. A number of members here in the Senate from across the aisle agree with this. I have been working with Senator Nelson on this for a long time. This is not a partisan issue, this is, no sir, a big tobacco issue. This is — this is not a big tobacco issue. This is a premium cigar issue consumed by people in different ways. You don’t smoke ten cigars a day.

 

We just know — common sense. But this is what’s going to happen. We’re going to wipe these guys out because of a government rule and the way it was interpreted, even though it was never meant to be about them.

 

We have an amendment, we have a law that fixes all this. I’m not going to offer it on this bill because it’s already part of the House package that lines up with the appropriations bills that are before us. But I wanted to point this out because I know people in Ybor City and I know people who care about this are watching. And I want them to know when this issue gets conferenced with the House that we’re going to be fighting for this, that this needs to get fixed because this is the last chance.

 

That’s the other point. This rule is about to kick in. The comment period is about to end, and the rule is going to kick in. So this is our last chance. If we don’t get it right here when we work this out, this is going to happen.

 

You’re going to be reading about it and maybe it doesn’t matter in some places. It matters a lot to Florida. It matters a lot to this company in Ybor City, in Tampa. It matters a lot to the hundreds and thousands of people across the country who work in the retail shops that sell them and who work in the places hand rolling and making them. And this is just wrong. And we should do everything we can to stop it from happening. And I hope that we will in conference deal with this issue. I’m glad it’s in the House version. I wish we could get it in the Senate version. We’re going to fight to include it in the final version.

 

We are not going to stand by and watch as J.C. Newman and small businesses like them are put out of business by a rule that was never supposed to apply to them.

 

Mr. President, I yield the floor and suggest the absence of a quorum.