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VIDEO: Rubio Urges Congress to Exempt Premium Cigars from Overreaching Regulations

Jul 26, 2018 | Press Releases

Washington, D.C. – U.S. Senator Marco Rubio (R-FL) spoke on the Senate floor today about the need for Congress to adopt his measure to exempt premium hand rolled cigars from the Food and Drug Administration (FDA) regulations, which threaten the livelihood of the last remaining hand-rolled premium cigar manufacturer in Ybor City.
 
Last month, Rubio led a bipartisan letter to the FDA urging for an exemption of premium, hand-rolled cigars from overreaching regulations, which threaten American premium cigar manufacturers that use antique machinery and could force small businesses across the country to close. Senators Rubio and Bill Nelson (D-FL) have also introduced bipartisan legislation to provide much needed relief to premium cigar manufacturers in Florida. 
 
A rough transcript of Rubio’s remarks is below:
 
In my home state of Florida, we have a rich history in manufacturing hand rolled premium cigars and for those would aren’t familiar with it, a hand rolled premium cigar is not the same thing as a cigarette. Number one premium cigars are 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 target was not premium cigars. They meant to go after tobacco products that were mass marketed and mass produced. But this 2009 law was interpreted in a way that would require premium cigars to regulate the manufacture, the import, the packaging, the labeling, the 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 twelve. Every time that one of these things was changed, you’d have to redo the labels, redo the packaging, redo everything. 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 regulations, 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. So 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’re focused on that’s brought to bear some of these issues is that tobacco is a legal product and small manufacturers of premium cigars are being harmed by this, but the regulations were not intended for them. The regulations were designed to target cigarettes. They were designed 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 $5, $8, $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 from 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. They may be 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 are not just going to survive, they will continue to be more accessible to young people. They will be able to stay in business.
 
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 in Ybor City,  after all this time there’s only one factory left. It’s a company called J.C. Newman. It’s within the Ybor City area and it’s 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, hand rolled cigars. They’ve been making them since 1895, and that’s all going to come to an end in the very near future if 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 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, and the quirk, and that’s how we’re going to have to apply it. It was never meant to be about them, everyone admits it, and yet that’s what it’s going to be and it’s going to put them, and not just J.C. Newman, it’s going to put other companies and then the retailers, and then the specialty cigar stores, because that’s what they sell, premium cigars, contained in a humidor, it’s going to put them out of business very soon, 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’s 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 successful as ever and the people that no one meant to harm are going to get wiped out. This is the epitome of government overreach and abuse. Regardless if the business is 10 years old or 100 years old, this industry by the way represents the livelihood of hundreds of American families. There are people that work in the factory, there are people that 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. This is a legal product made by a hardworking Americans who have been doing it for a long time, not the intended target of this rule. And it’s unjust for them to be singled out, a small business, it’s just unfair, it’s wrong. Here’s the worst part about this rule. It is written retroactively.
 
So not only will they have to start complying moving forward. Cause you could argue just don’t change your blend in the future. It goes back all the way to 2007 they’re going to have to go back and relabel, repackage everything they have been making for the past 11 years. That explains just a little bit about the 30 million dollar the cost for just this one business. By the way, they’ve broken no laws and yet they’ve been singled out and it threatens their livelihood. This is a bipartisan and a bicameral issue. A number of members here in the Senate from across the aisle agree with this. I’ve been working with Senator Nelson on this for a long time.
 
This is not a partisan issue, this is not a big tobacco issue. This is a premium cigar issue, which are consumed differently than cigarettes, by different groups of 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 [bill] 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 around the country that care about this are watching. And I want them to know when this issue now 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.
 
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