Wednesday, April 25, 2018
Business

Ybor City cigar company ratchets up new blends ahead of tighter rules

TAMPA

It typically takes the J.C. Newman Cigar Co. 18 to 24 months to prepare a new premium cigar for the marketplace.

But over the past two months, the Ybor City company that runs Tampa's last cigar factory has produced 20 new premium blends, all targeted to hit the market before Aug. 8.

Fans of J.C. Newman cigars may see this as a reason to celebrate. But it's cause for alarm to third-generation company president Eric Newman.

Newman is rushing to beat a deadline. Aug. 8 marks the start of new U.S. Food and Drug Administration regulations that threaten to increase the difficulty and cost of bringing new premium cigar blends to market.

The business depends on introducing new products on a regular basis, Newman said.

"Developing blends takes time," he said. "Then there is creating packaging, labels, boxes, bands. Designers are backed up. It is a madhouse. But the FDA regulations are forcing us to come out with so many so quickly to ensure survival."

J.C. Newman and smaller storefront operations centered in Ybor City continue a Tampa legacy dating to the early 1900s, when Tampa was seen as the cigar capital of the world.

They are still trying to figure out which category in the new regulations covers premium cigars, generally those made by human hands from natural tobacco. They also hold out hope that Congress will exempt premium cigars from the regulations or that a pending lawsuit will offer them some relief.

The new regulations arise from the Family Smoking Prevention and Tobacco Control Act signed by President Barack Obama in 2009, providing the FDA authority to oversee electronic cigarettes, personal vaporizers and cigars in the same manner the agency already regulates cigarettes.

The rules require manufacturing processes that ensure these products contain no harmful chemicals and that they are not marketed in ways that could tempt minors.

The FDA has estimated that submitting its new Premarket Tobacco Application could take more than 1,000 hours of work and cost a company six figures.

Premium cigarmakers quote these numbers regularly. But these estimates cover a category that primarily applies to new tobacco products. The FDA does not expect this to include premium cigars.

A tobacco product on the market before Feb. 15, 2007, receives grandfather rights and no application is required.

For newer products, a manufacturer can file a "substantial equivalence" application if a product is similar in makeup and ingredients to a grandfathered item. The FDA expects this exemption will apply to most cigars. The application process, according to the FDA, could cost $1,443 to $22,787 and require 10 to 300 hours of work.

Most new cigars come in a variety of sizes and shapes. Any variation in size or tobacco content is considered a different product and requires a separate application. But once an application for one blend of tobacco is completed, subsequent versions in different sizes will be cheaper because tasks such as ingredient testing need not be repeated.

Newman estimates he has 500 different products that are not grandfathered in and will be subject to the new review.

After Aug. 8, no tobacco product can enter the market without receiving FDA approval through the new processes.

Those that entered the market after the 2007 date, but before the regulations kick in Aug. 8, can remain on sale for up to three years before an application is required.

That gives Newman up to three years to submit applications for his hundreds of cigar varieties.

Another concern for Newman is that the FDA lacks the manpower to deal with all the applications coming from cigar manufacturers and makers of personal vaporizers and electronic cigarettes.

This raises the possibility the agency will pull a product until it can be vetted, he said.

J.C. Newman's 20 new blends will be released on a limited basis just to get them on the market before Aug. 8. Some will be pulled and rereleased over the next few years.

Bills have been introduced in both the U.S. Senate and House that call for exempting the premium cigar industry from the new regulations.

Three premium cigar advocacy groups have filed a lawsuit against the FDA in the U.S. District Court for the District of Columbia seeking a permanent injunction for their industry.

"Premium cigars should be exempt from this testing," Newman said. "All we use is natural tobacco."

An FDA study shows high school boys smoke cigars at the same rate as they do cigarettes, but Newman says they're cheap or flavored cigars and not the premium variety.

The FDA still rejected this argument in setting the new regulations.

"The FDA concluded there was no public health justification for excluding any cigars," said Vince Willmore, vice president of the Washington, D.C.-based Campaign for Tobacco-Free Kids. "All cigars propose health risks and are potentially addictive."

If no exemption is created, it could spell the end for small premium cigar manufacturers, said Jeff Borysiewicz, owner of Corona Cigar Co. in Orlando and co-founder of Cigar Rights of America, a party in the lawsuit.

"These new regulations are a de facto prohibition on premium cigars," Borysiewicz said. "It is going to drive the small guys out of business."

That is indeed a possibility, said Michael Cincunegui, owner of Ybor City's Long Ash Cigars, which employs a dozen and sells as many as 30 different blends rolled inside the boutique shop.

"I don't feel like the sky is falling but I also don't think this will just go away," he said. "This is not just about cigars. It's about keeping my employees working and the city's cigar culture alive."

At its peak in the early 1900s, Tampa had more than 150 factories producing more than 500 million hand-rolled stogies. Cigar-rolling machines, the Great Depression, the Cuba trade embargo and a federal tax decimated the industry so that by 2009, Newman stood as the last local manufacturer.

"We've survived it all, so we'll fight this to the end too, if need be," Eric Newman said. "We are dedicated to staying in Tampa and keeping it Cigar City."

Contact Paul Guzzo at [email protected] or (813) 226-3394. Follow @PGuzzoTimes.

   
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