Some New Cigars and Tobacco Jobs Lost by Frank Seltzer
As we get closer to the industry trade show, we are hearing about more cigars that are being rolled out. Cigar Aficionado announced that the JC Newman company (owner of Cuesta Rey ) is coming out with a value priced Nicaraguan called Perla del Mar. It is expected to retail around $5.
Cien y nueve anos?
(Yes I know anos should have the tilde over it, but for the life of me I can’t figure it out in Word Press.)
In 2003, to commemorate it’s 100th year in business La Aurora released a a special cigar line — the Cien Anos. It was limited to 400-thousand cigars or 100-thousand each of the Corona, Churchill, Belicoso and Robusto with every cigar having an individual number. The Cien Anos used aged wrapper that had been put away for this special project in the 90s. The cigar contained 8 year old Piloto Cubano and 5 year old Dominican Corojo fillers with an aged Corojo wrapper. In 2004, the Belicoso made Cigar Aficionado’s top list at number 2. After the initial run, there were special occasion Cien Anos cigars made and then generally released in the Preferido shape and lastly in the Lancero. This year the company is bringing the Cien Anos back albeit in a very limited way. La Aurora says it is making 20,000 per size of the Belicoso, Churchill and Robusto. (Pity, I always preferred the Corona. The last one smoked was #004670. By the way, to mark the company’s 107th year in operation La Aurora released its 107 line.)
In addition to the original Cien Anos blend, La Aurora is making an ultra limited release of just 7,000 cigars using a Connecticut Broadleaf wrapper. It will be part of a package and available only to certain retailers. The prices for the new Cien Anos will be $12 for the Robusto, $14 for the Churchill and $16.80 for the Belicoso. No word on the price for the Broadleaf package.
New La Palinas
La Palina—the company that originally founded CBS – is announcing two new entries for this year’s trade show. The first will be the La Palina Maduro which features the tasty San Andres Mexican Maduro wrapper over a Honduran binder and Nicaraguan fillers. The Honduran-made cigars will come in 4 sizes a 7” x 56. 6” x 60, 6” x 50 and a 5”x52. These will run between $9 and 10.50. The second cigar will be the La Palina Classic which promises to be a medium-bodied cigar made in the Dominican Republic. It uses a Brazilian-grown Habano wrapper over an Ecuadoran binder and fillers from the Dominican Republic and Nicaragua. Again 4 sizes 6.125” x 52 Torpedo, 6”x60 Gordo, 6”x 50 Toro and a 5”x52 Robusto. Suggested retail $7.50-8.50.
Tobacco Jobs Lost
With a stroke of the pen, President Obama and both houses of Congress over the weekend wiped out small mom and pop tobacco operations. They were the Roll Your Own shops, which had sprung up across the US since 2009 in response to the SCHIP high cigarette taxes.
You may not remember, but that was when federal cigarette excise taxes went from $3.90 to just over 10 bucks a carton. Cigars went up from 4.9 cents each to 52.75% of the manufacturers price up to a cap of 40.26 cents. (Something Congress could ALWAYS change.) Still a whopping increase. But the RYO people really got screwed. Their tax rate went from just over a buck to an mind blowing $24.78 per pound. Needless to say Altria wanted to kill the RYO business and thought it had done so, but the people adapted and started using pipe tobacco for the RYO cigarettes. Pipe tobacco’s excise tax went from just over a buck to $2.83 a pound.
Well now RYO MAY be over.
Hidden inside a federal highway measure –because as we know Highways have to do with tobacco—remember Tobacco Road?—was an amendment to finally destroy the RYO business. The RYO stores were little operations with machines about the size of a small ATM. You dumped your tobacco into them and in about 10 minutes you’d get the equivalent of a carton of smokes. These machines ran at about 1,000 times slower than what the big boys used. The idea was that it provided affordable smokes to people. Well Altria—maker of cigarettes from Marlboro to Benson and Hedges to Basic – didn’t like the competition. Altria (which used to be known as Philip Morris) does not like giving up any of its market share, no matter how small. It combined with the National Association of Convenience Stores (NACS) — which sells a lot of Altria’s smokes— to lobby Congress to kill the RYO business by equating the small stores to that of Altria. The RYO operations became manufacturers thanks to the amendment, meaning they had to pay hefty taxes and abide by tons of new regulations.
How big is the industry? Not very. The largest maker of the RYO machines according to the Wall Street Journal has sold about two thousand of them. In Wisconsin, it is estimated that in 84 outlets about 300-400 people are employed. But now those machines and employees will be idle as most all RYO operations have changed their business over the weekend as the new law went into effect.
“Robert Weissen, with his brothers and other partners, own nine Sin City Cigarette Factory locations in Southern Nevada, including six in Las Vegas, and one in Hawaii. He said when the bill is signed their only choice is to turn off their 20 RYO Filling Station machines and lay off more than 40 employees.
“We’ll stay open for about another week to sell tubes and tobacco just to get through our inventory, but without the use of the RYO machines, we won’t be staying open,” he said.
About 14 hundred RYO stores have hired a law firm in hopes of reversing the legislation or at least getting an injunction to allow them to remain open.
This is why it is important to continue to fight against the FDA. That regulation in the cigar industry would shut us down. And it could come as quickly as the RYO amendment did. No big hearings on it, just quietly tucked into the highway bill. That bill passed June 29th and then signed by the President a week later becoming law that night. Help the Cigar Rights of America and the International Premium Cigar and Pipe Retailers Association’s fight on Capitol Hill. Support HR 1639 and S 1461 to exempt premium cigars from the FDA’s clutches.
