Earlier this year, the U.S. Food and Drug Administration (FDA) published draft guidance on the Substantial Equivalence process. As a part of issuing such guidance, there must be a public comment period. The comment period came to a close on July 17th (following a 30-day extension granted by the FDA). This saw many cigar companies submit comments to the FDA on this proposed rulemaking.
One interesting development was the submission of a joint comment shared by six large manufacturers who are members of the Cigar Association of America (CAA). This past week, one of the companies, Drew Estate, distributed a press release on the comments. In addition to Drew Estate, the other companies include Davidoff of Geneva, General Cigar Company, Tabacalera USA, Perdomo Cigars, and C.L.E. Cigar Company.
Substantial Equivalence marks a pathway where many cigar companies can keep product on the market if it was introduced after February 15th, 2017 without going through a more costly pre-market approval process. It involves demonstrating a product is substantially equivalent to a product commercially marketed before February 15th, 2017. Products commercially marketed before that date are exempt from FDA regulation. It is one of the most troubling regulations the FDA is planning on enforcing.
Joint Comments: C.L.E./ Davidoff/ Drew Estate/ General/ Perdomo/ Tabacalera USA
This joint comment marks the first time these premium cigar manufacturers, who are all also members of Cigar Association of America (“CAA”), have joined together to file their own set of comments specifically regarding premium cigars. The CAA has also issued its own comments as well.
In a press release announcing the comments, Dylan Austin, President of Davidoff of Geneva USA noted, “Our joint comment filed today shows FDA’s Proposed SE Rules to be an overly broad and unjustifiably costly set of regulations that are so lacking in scientific substantiation as to be nothing more than an illegal economic ban on handmade premium cigars that will cripple the manufacturers and retailers in this important industry.”
Javier Estades-Saez Johansson, President and CEO of Tabacalera USA, stated, “We are all proud members of CAA, which as the cigar industry’s oldest and most well recognized trade association, continues to robustly represent the interests of the entire cigar industry at the federal, state, and local levels. We fully support CAA’s incredible work in challenging current FDA regulations, which are wrong for all cigars, and recognize that certain aspects of FDA’s regulations uniquely and disproportionately impact premium cigars. We therefore decided to come together to address these issues head on.”
Glenn Wolfson, CEO of Drew Estate, added, “Our joint comment to FDA is very powerful because it is based on data. The FDA has undertaken extensive research about the usage patterns of premium cigars and their impact on public health. The resulting data from this scientific research is clear and unambiguous as to two critical facts. First, premium cigars are not used by youth. Second, based on the usage patterns of adult premium cigar smokers, there is no statistically significant difference in mortality rates or disease rates between the overwhelming majority (over 95%) of premium cigar smokers and non-smokers. Said differently, the FDA’s own data makes clear that FDA regulation of premium cigars will neither impact what is virtually non-existent youth usage or materially benefit the public health. On the other hand, due to the unique nature of this artisanal, handmade industry, the costs of FDA regulation of premium cigars will be devastating, particularly to small businesses.”
“The Premium Cigar Manufacturers have in our joint comment called upon FDA to look at their own research and reach the only conclusion their own data can support,” stated, Nick Perdomo, CEO of Perdomo Cigars, “that the Proposed SE Rules are simply inappropriate as applied to premium cigars and that premium cigars should be exempt from FDA regulation.”
Regis Broersma, President of General Cigar Company concluded, “As the leading manufacturers in the premium cigar industry, all of us proudly stand together today to protect all premium cigar manufacturers regardless of size, retailers and consumers from what can only be described as unduly burdensome, grossly over-reaching, and wholly improper regulation. We invite all industry members to review our joint comment and to speak to your local representatives about the devastating impacts of FDA’s proposed regulations on your businesses. Together we can make a difference.”
In addition to the six CAA companies, the following other companies have submitted comments on Substantial Equivalence. These appeared on the Federal Register as of July 20, 2019.
- Alec Bradley Cigars
- Altria Client Services
- Arturo Fuente Cigar Company
- Ashton Distributors
- Christian Eiroa, (C.L.E. Cigar Company – solo comments)
- Japan Tobacco International
- J.C. Newman Cigar Company
- My Father Cigars
- Piloto Cigars, Inc. (Padron Cigars)
- Rocky Patel Premium Cigars
- Swedish Match North America
- Tatuaje Cigars
- Boutique Cigar Association of America
- Cigar Association of America Comments
- Cigar Rights of America
- Coalation of Independent Tobacco Manufacturers of America
- Premium Cigar Association (IPCPR)
While Cigar Rights of America published a list of its associate members from the manufacturing side as well as a list of Boutique Cigar Association of America members and Coalition of American Cigar Rollers, there were many companies that are not a part of any of these organizations, nor submitted individual company comments. This was somewhat surprising because many companies, particularly the smaller/boutique companies who have been particularly vocal on social media, stand to lose a great deal. Some companies (or other organizations) choose to comment and endorse a trade association’s comment, but as of July 20th, there were not many of those.
Note: It is possible there are additional comments submitted that will be published to the Federal Register and we will update this list).
7/25/19: Updated Company and OrganizationList