U.S. fans of Cuban cigars still have long wait before they can be sold here

[El Presidente]

Nothing too new in the article but some insight from the industry players. 

http://www.tampabay.com/news/business/us-fans-of-cuban-cigars-still-have-long-wait-before-they-can-be-sold-here/2278482

[MnBrian]

Yep, this all sounds familiar! Thanks for sharing Rob! 

[Chefalan86]

Good read Prez. I will just keep em coming from the land down under. Ha

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[Yagermeister]

I can't decide whether this makes me happy or sad. On the one hand the FDA is infringing upon my personal freedoms in a way I don't appreciate, but on the other hand it may prevent the unwashed masses from getting their hands on the premium products that I currently enjoy. I sure am grateful that I've got such fantastic people to help me move some dried up leaves from a place where they're overtaxed to a place where they're overregulated and yet avoid the hassle of both.

[TCContender]

^ this   I feel bad for the folks stateside that have not found themselves a trusted source, but I would prefer to spend my coin here even if I could source CCs locally.  The taxes on US purchased CCs and the general attitude of some shops towards CCs would be difficult to justify, especially when we have a team such as that at FOH with their stellar pricing and superb service that we can patronize.

[sactochris]

I think we all knew that the new FDA policy was going to complicate things considerably.

[SCgarman]

Cubans will most likely never be sold here in the US. Do you think the Cuban government would be willing to pay the FDA MILLIONS of dollars to have their cigar blends approved? Absolutely not.

[FLB03TT]

Long live FOH!

[ElPuro]

Excellent news for us Americans (seriously).

[planetary]

13 minutes ago, jpu2166 said:

Cubans will most likely never be sold here in the US. Do you think the Cuban government would be willing to pay the FDA MILLIONS of dollars to have their cigar blends approved? Absolutely not.

From what I've read, this idea that it will cost millions to approve cigars through the FDA is just wrong.  It may be more about the packaging than about the tobacco itself.

Fully agree with others; I'm happy to keep ordering here.

[btp1979]

So for arguments sake, lets say FDA rules are prohibitively expensive for Habanos or Cuba just deems it not worth the hassle.

How would the ruling affect bringing them back from abroad? Now we can bring back a handful if we travel directly to Cuba, but hitting up a duty free in Dubai and bringing back a few boxes is still verboten.

Option 3 FOH for life

 

Billy

[brschoppe]

My thought when I read this was about the copyright issues between the Dominican versions of Cuban brands. However, since those brands sell sizes that mimic the Cuban brands would they have to be reapproved if the supply country of origin changed? It might be the bait needed for the Cuban and Domincan brands to work out their differences.

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[LeafLover]

Fine by me. I am happy the way I gets mine. 

[NSXCIGAR]

8 minutes ago, brschoppe said:

My thought when I read this was about the copyright issues between the Dominican versions of Cuban brands. However, since those brands sell sizes that mimic the Cuban brands would they have to be reapproved if the supply country of origin changed? It might be the bait needed for the Cuban and Domincan brands to work out their differences.

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That's a totally separate issue that would also need to be worked out before any brands currently offered by General Cigar could be sold in the US such as Cohiba, Partagas, LGC, Punch and Hoyo. Monte, RyJ, HU, JL, SLR and Trinidad are already owned by Imperial and won't be an issue. But the ironing out of copyright issues for the former brands could take quite a while and involve a lot of money, and I can almost guarantee that US/world courts aren't going to be very favorable to Cuba winning a lawsuit to re-acquire these brands outright. Money or control/royalties are going to have to change hands--and a lot of it.

 

 

 

[NSXCIGAR]

A few noteworthy items from this article:

"Something produced in the '50s or '60s and not sold since then is not grandfathered in the FDA's eyes," he said.

So much for that loophole. I know someone had brought up that possibility in a previous thread regarding the original FDA decision.

Different types of cigars sold by the same brand are considered separate products and each must comply with the regulations.

Well, I think that's pretty much the nail in the coffin. Each and every vitola is going to cost $330,000+ just for submission, with no guarantee of acceptance. 27 brands, average 10 vitolas per brand, $330K per vitola--$89 million dollars--and likely to be closer to or even north of $100 million. That's a big chunk of change with no guarantee.

Personally, I don't think people really are following this new rule and/or understand it's ramifications. Hopefully, once the embargo is lifted and everyone is dumbfounded as to why the US can't finally get Cuban cigars there will be some real outcry and negative press about this under-the-radar regulation and congress may get involved.  

[El Presidente]

38 minutes ago, NSXCIGAR said:

A few noteworthy items from this article:

"Something produced in the '50s or '60s and not sold since then is not grandfathered in the FDA's eyes," he said.

So much for that loophole. I know someone had brought up that possibility in a previous thread regarding the original FDA decision.

Different types of cigars sold by the same brand are considered separate products and each must comply with the regulations.

Well, I think that's pretty much the nail in the coffin. Each and every vitola is going to cost $330,000+ just for submission, with no guarantee of acceptance. 27 brands, average 10 vitolas per brand, $330K per vitola--$89 million dollars--and likely to be closer to or even north of $100 million. That's a big chunk of change with no guarantee.

Personally, I don't think people really are following this new rule and/or understand it's ramifications. Hopefully, once the embargo is lifted and everyone is dumbfounded as to why the US can't finally get Cuban cigars there will be some real outcry and negative press about this under-the-radar regulation and congress may get involved.  

If the above stands,you will see the best selling Cuban items in the US (CORO, Monte 2/4 etal).  

How in hell you can release slow selling or specialty product (legitimately) I have no idea. 

[skalls]

Not sure the monte 4 would sell here.  Too small.  Their crazy, but thats the mindset of the average consumer here.

[over29]

Just means I continue to get them from down under

[NSXCIGAR]

2 hours ago, El Presidente said:

If the above stands,you will see the best selling Cuban items in the US (CORO, Monte 2/4 etal).  

How in hell you can release slow selling or specialty product (legitimately) I have no idea. 

I agree, HSA is certainly going to get the crown jewels in the pipeline first, but Cohiba is a General Cigar brand. Imperial has Monte, RyJ and HU and who knows how long and how much resolving the copyright issue is going to take. I would expect the Monte 2, Edmundos and Open Eagle & Master to be the first submissions. ^^ skalls is probably right--42 ring will not be high priority for US approval. I doubt Monte 4 would ever be the best seller in the US and will take a back seat for now.

Anyway, I truly believe this whole regulation was designed to absolutely prevent new cigars from coming on to the market, period. I think it's more likely than not that the FDA will not approve these submissions. This is all about anti-tobacco, period. 

I am encouraged about this, however:

If the embargo is lifted, the U.S. law governing the importation of tobacco for personal use from Cuba will then be the same as it is for every other country, increasing what can be brought back to as many as 100 cigars with a price capped at $800.

This means that there is the possibility of a thriving mail-order catalog business immediately following the embargo bypassing the FDA, either from LCDHs or other retailers. I think once it's legal to shop by mail or online there's going to be a huge surge in online business and opportunities for online retailers. Also, opportunities for a lot of scammers. May kind of be the wild west for a while...

[TheMonk]

Very nice read, thanks!

[wabashcr]

9 hours ago, NSXCIGAR said:

So much for that loophole. I know someone had brought up that possibility in a previous thread regarding the original FDA decision.

Different types of cigars sold by the same brand are considered separate products and each must comply with the regulations.

Well, I think that's pretty much the nail in the coffin. Each and every vitola is going to cost $330,000+ just for submission, with no guarantee of acceptance. 27 brands, average 10 vitolas per brand, $330K per vitola--$89 million dollars--and likely to be closer to or even north of $100 million. That's a big chunk of change with no guarantee.

Personally, I don't think people really are following this new rule and/or understand it's ramifications. Hopefully, once the embargo is lifted and everyone is dumbfounded as to why the US can't finally get Cuban cigars there will be some real outcry and negative press about this under-the-radar regulation and congress may get involved.  

That $330k number is for the PMTA process.  The FDA has stated that they envision most cigars utilizing the Substantial Equivalence pathway for approval, which is considerably cheaper.  

If anyone is interested in reading the economic analysis from the FDA, it can be found here:

http://www.fda.gov/downloads/AboutFDA/ReportsManualsForms/Reports/EconomicAnalyses/UCM500254.pdf

The SE pathway discussion starts on page 92, and Table 15 on page 95 is of particular interest.  You can see the FDA expects the PMTA pathway to apply mostly to e-cigs and vapor products.

[Phatskipper]

Obviously most of us think the FDA ruling is a crock of ****, but I'll leave it at that.  I am with the folks here who are just fine with Cubans not being sold in the US, I would prefer the current situation to a highly regulated supply chain complete with regressive taxes jacking up the price.  Further, the only people I feel sorry for are the Cuban people who have the potential to benefit from opening the US market; outside of them, I am quite happy that the feds don't have their greedy paws in the pie today.  

I am convinced that normalizing CC imports would be a terrible things for Americans that participate in this community.

[scap99]

3 hours ago, wabashcr said:

That $330k number is for the PMTA process.  The FDA has stated that they envision most cigars utilizing the Substantial Equivalence pathway for approval, which is considerably cheaper.  

If anyone is interested in reading the economic analysis from the FDA, it can be found here:

http://www.fda.gov/downloads/AboutFDA/ReportsManualsForms/Reports/EconomicAnalyses/UCM500254.pdf

The SE pathway discussion starts on page 92, and Table 15 on page 95 is of particular interest.  You can see the FDA expects the PMTA pathway to apply mostly to e-cigs and vapor products.

Page 103.

Consumer costs.

"Today we see very large numbers of products embodying minor variations.  Even if considerable consolidation were to occur, close substitutes would exist for discontinued products...."

Wait, what?!?!

I could roll a cigar with tobacco I grew in my backyard.  It would be 100% tobacco, just like any of the sticks El Prez posts on the x:24.  That don't make them interchangeable.  Not by a long shot.

This is like some sick Gurkha marketing campaign.

 

 

[Oldmso54]

Definitely one of the more informative reads on this subject - TY.

Considering how readily available Cuban cigars are to the American consumer I'm not sure I'm ready for anything that will "upset the apple cart" so to speak?

[wabashcr]

26 minutes ago, scap99 said:

Page 103.

Consumer costs.

"Today we see very large numbers of products embodying minor variations.  Even if considerable consolidation were to occur, close substitutes would exist for discontinued products...."

Wait, what?!?!

I could roll a cigar with tobacco I grew in my backyard.  It would be 100% tobacco, just like any of the sticks El Prez posts on the x:24.  That don't make them interchangeable.  Not by a long shot.

This is like some sick Gurkha marketing campaign.

 

 

The way I read that is that they're talking about products like e-cigs that would have to go through the PMTA pathway, and not cigars.  With the Substantial Equivalence pathway, I don't think they expect nearly as much consolidation among premium cigars.  But I do agree that the FDA's view of cigars as just another mean for nicotine delivery is troubling.  They clearly aren't concerned with the kind of nuance that makes premium cigars a hobby, and not just a habit.