18 Nov IPCPR Government Affairs Quarterly Report
For several years, your representatives at the International Premium Cigar and Pipe Retailers Association (IPCPR) worked diligently to prevent regulation by the Food and Drug Administration (FDA). Despite our best efforts, FDA’s “Deeming Rule” regulating cigars and other tobacco products took effect on August 8, 2016. As this year comes to an end, we reflect on the changes that have rocked the premium tobacco industry under the Obama Administration’s regulatory regime, and look toward the future as IPCPR pursues opportunities to protect our members from government overreach.
Prior to the release of the “Deeming Rule,” our misunderstood boutique industry was already plagued with over-regulation, bureaucratic hurdles, and high taxes at the local, state, and federal levels of government. With the release of a one-size-fits-all federal regulation that fails to account for how pipe tobacco and premium cigars are manufactured, distributed, sold, and consumed in the United States, the adjustment to our new “normal” has been a challenge for manufacturers, retailers, and consumers alike. IPCPR awaits clarification from FDA regarding many unclear provisions in the “Deeming Rule.” While IPCPR members begin to comply with the “Deeming Rule,” our Association is pursuing both legal and legislative alternatives to protect them from harmful regulation.
In July, the three major cigar and tobacco industry associations came together to file suit against FDA’s “Deeming Rule.” IPCPR, The Cigar Association of America, International Premium Cigar and Pipe Retailers Association, and the Cigar Rights of America are asking the District Court for the District of Columbia for a declaratory injunction to “vacate, set aside and enjoin the enforcement of the final rule” because it violates numerous federal statutes as well as the federal rulemaking process. IPCPR has have received FDA’s reply to our lawsuit, and we expect a court date to be assigned early next year.
IPCPR is also pursuing a legislative solution to prevent FDA from using funds to enforce premium cigar provisions of the “Deeming Rule.” Language that would exempt premium cigars from FDA regulation was supported in a bi-partisan fashion by the House Appropriations Committee. This language was written to protect only the true 275 to 300 million premium cigars sold each year. A successful legislative solution can only happen with the assistance of industry supporters in Congress who have the power to rollback this regulation with a legislative correction. Your representatives at IPCPR have been working with Members of Congress to educate them on the premium cigar exemption.
As of this writing, we expect that lawmakers will not pass a Fiscal Year 2017 budget before President-elect Trump takes office. As such, a continuing resolution will likely be issued to fund the government through March 2017. At that point, we expect the Agriculture Appropriations bill to be the vehicle for the premium exemption language. When this time comes, the premium cigar industry will need your participation. You will be asked to contact your Senators and Representative in support of the premium cigar exemption. It is also critical to involve your customers in the fight to exempt premium cigars from regulation. We hope you will utilize the tools provided by IPCPR to get involved and help protect the future of our industry from this devastating regulation.