Tobacco Asia (TA): The United States FDA is to soon enact a contentious new law that would ban all flavored cigars. What impact would such a ban have on the industry as a whole, i.e. manufacturers, importers, distributors, and retailers?
David Ozgo (DO): We believe that the proposed flavor ban would impact as much as 47% of the market or nearly US$4 billion in retail sales. Naturally, such a large loss of revenue would lead to job losses. We are projecting over 16,000 lost jobs. Lost tax revenue would be US$750 million.
TA: How did you derive these figures?
DO: The projections come from a study conducted by the Policy Navigation Group.
TA: If the proposed ban passes into law, it obviously also will have an effect on consumer choice…
DO: When the Tobacco Control Act was passed in 2009 under then-president Barack Obama, it had the admirable goal of eliminating youth smoking. However, President Obama said that the law would also “allow adults to make their own choices.” Clearly, imposing a prohibition on flavored cigars is taking away adults’ right to choose.
TA: The impact of the proposed ban appears mostly negative. Are there any good aspects to it at all? What about an improvement in public health, for example, or other areas?
DO: The Tobacco Control Act outlines specific standards that FDA must evaluate before it can promulgate a tobacco product standard. Namely, and firstly, [assessments of] the risks and benefits of the proposed standard for the population as a whole, including users and non-users of tobacco products]; secondly, the increased or decreased likelihood that existing users of tobacco products will stop using such products; and thirdly, the increased or decreased likelihood that those who do not use tobacco products will start using such products. Any tobacco use has potential risk. However, youth usage rates of tobacco products are extremely low and have been on a downward trend for roughly 20 years. … There can be little public health gain from the proposed prohibition on flavored cigars.
TA: FDA claims it will only enforce the flavored cigar ban “against manufacturers and retailers but not against individuals”. What is that all about? It seems redundant…
DO: While FDA might not take enforcement action against individuals, law enforcement officials have an obligation to enforce state tax laws. To state the obvious: criminals do not pay taxes. As a result, state law enforcement will end up enforcing FDA’s ban and that will mean enforcement against individuals. It is certainly instructive to look at how other flavor or tobacco bans have been enforced. There have been two well-publicized examples of police getting physical with teenage vapers in Ocean City, Maryland. And in Massachusetts, there have been arrests for selling flavored tobacco products. In New York, we have had the tragic example of Eric Garner losing his life during an altercation with police over selling “loosies”, or single cigarettes. Clearly, FDA’s proposed flavored prohibition will cause needless pain and suffering for many.
TA: FDA claims the ban is necessary to reduce the cigar smoking rate among underage people. That begs the question: are US teenagers so much into smoking flavored cigars that a prohibition for everybody is the only option?
DO: American youth really are not into smoking cigars. In 2021, the National Survey on Drug Use and Health [NSDUH] showed that past-month use [of tobacco products] by 12-17-year-olds was only at 0.7%, identical to Wave 5 of FDA’s own Population Assessment of Tobacco and Health [PATH] survey. Importantly, the PATH survey [also] showed that the percentage of 12-17-year-olds using flavored cigars in the past month is 0.3%. Clearly, American youth are not enthusiastic cigar users. By comparison, alcohol use [among that demographic] was 10 times higher, at 7.0%, and even marijuana was at 5.8%. As we [at the Cigar Association of America] have often said: the proposed ban on flavored cigars is really a solution in search of a problem.
TA: The legal age for consuming tobacco products and vapes in the US is 21 anyway, so why is the proposed ban even necessary when it could simply suffice to enforce the legal smoking or vaping age more vigilantly?
DO: This is a great question. One could argue that by imposing a prohibition on flavored cigars we will only increase youth access. If the prohibition goes into effect, we will likely see robust illicit markets develop. Illicit actors do not care about age verification. They will sell to anyone. Current retailers are licensed [and] subject to inspection, risking heavy fines or even losing their license if caught selling to underage persons. So, there are great potential risks by imposing a flavor ban that will move sales out of the regulated market into the illicit market.
TA: Various law enforcement groups have voiced opposition to the ban, including the National Association of Police Organizations, the Federal Law Enforcement Officers Association Foundation, the National Narcotics Officers Association Coalition, the National Troopers Coalition, and the National Organization of Black Law Enforcement Executives. What are their main points of criticism?
DO: These organizations recognize that the flavor prohibition will only create illicit markets. Illicit operators do not pay state sales and excise taxes. All states have an interest in enforcing their tax laws. Thus, law enforcement inevitably will be pulled into enforcing FDA’s prohibition. Many of [these groups] were more than happy not to have to enforce laws against marijuana use and possession anymore. They do not want to have to start all over again with flavored cigars.
TA: If even these groups oppose this blanket ban, why is FDA so determined to push it through regardless? After all, blanket prohibitions have rarely worked – if ever. Look at the alcohol prohibition experiment in the US in the 1920s. It failed miserably. All it accomplished was create a truly gigantic, criminal-controlled black market for alcohol…
DO: You are certainly correct. More recently, we can also point to the failed marijuana prohibition. It is ironic that, over the last 20 years, we have seen [US] states first decriminalize marijuana possession, then legalize it for medical purposes, and now 20 states have legalized it for recreational use. During that [same] period, many laws and regulations that were in place on alcohol sales and distribution have been liberalized as well. So, at the very time when marijuana and alcohol laws are being liberalized, we are implementing public policies regarding cigars that we know do not work and will likely cause economic and social harm. This is as bad as public policy gets. We should extend the same courtesy to adult cigar enthusiasts as we do to cannabis and alcohol users.
TA: In its current wording, the proposed law would ban cigars “with characterizing flavors excluding tobacco flavor”. There are numerous premium cigar products whose tobaccos are traditionally infused with natural aromas such as rum, scotch, vanilla, coffee bean and others. Would these fall under the proposed ban? Shouldn’t the ban be limited to flavors that are actually attractive to teenagers, for example artificial fruity or candy flavors?
DO: FDA does not have a clear way to define what a “characterizing flavor” would be. Flavored cigars have been around for hundreds of years. There is a wide spectrum of flavors that appeal to adults, so it would be impossible to describe or define what is or is not an adult flavor [as opposed to an adolescent flavor].
TA: If cleared, when is the ban likely to come into force?
DO: FDA has said that they will get the final rule out in August [of 2023]. However, as of July 11, it is not at the Office of Management and Budget [OMB] for final review, so the August release looks unlikely. Theoretically, we would expect the ban to go into effect one year after final approval. OMB has asked for comments on a shorter implementation period. However, there are likely to be legal challenges, which could delay implementation.
TA: Is there anything else that you would like to share with our readers?
DO: Yes. It is important that your readers [in the cigar sector] get involved politically. Feel free to contact us and we can show you how.*
*Interested parties may contact CAA at the phone number+1 202 223 8204 or by sending an email to: dcotter@cigarassociation.org.