Smokeshop

April 2016 SMOKESHOP 37 MANY REGULATORY CHALLENGES, BUT "WE WILL OVERCOME" The Dominican Republic cigar indus- try and key government agencies have lent their support to the Cigar Rights of America (CRA) and the International Premium Cigar & Pipe Retailers Associ- ation (IPCPR) to oppose new regulations from the U.S. Food & Drug Administra- tion (FDA) as the agency navigates the final stages of extending its regulatory authority to the cigar segment of the to- bacco industry. Attempting to predict when the final deeming regulations will be published has been impossible, as the FDA has missed multiple self-imposed deadlines even as political pressure from anti-smoking and anti-vaping interests press the agency for action. Manuel Quesada, president of Que- sada Cigars, said the opposition efforts to present the industry's case to the relevant U.S. regulators have been ongoing, in the expectation they will take the industry's arguments into account and that the leg- islation's impact on premium cigars "will be not so unfavorable." Quesda reported that as the regula- tion's release has grown more eminent, both the CRA and IPCPR have been working with the White House Office of Management and Budget, but has also picked up the pace to present its argu- ments with the White House Domestic Policy Council, the U.S. Small Business Administration, and the Office of the United States Secretary of Health and Human Resources. A primary goal, said Quesada, is to "attempt to create the base within their minds that we are a product that stands out from that wide umbrella of tobacco products that should be regu- lated by the FDA." In addition, produc- ing region organizations like Procigar and the Association of Manufacturers de Nicaragua and Honduras have been coordinating their efforts with the em- bassies "to elevate their arguments to the highest levels of the U.S. presidency." In addition, Reyes noted that within the Dominican Republic, the Ministry of Industry and Commerce's legal depart- ment has also been fighting against the FDA regulations, and explained that the Dominican tobacco industry has the full support of the Dominican Republic gov- ernment in its efforts. "It's an entire collab- oration of the country supporting us," said Reyes, "because…tobacco is who we are; that is how all the governmental offices see it as well, so this is why they support us." FDA regulations in the U.S. are only one of the challenges facing the premium cigar industry in the Dominican Repub- lic and elsewhere, as the European Union has its own onerous slate of minimum regulatory standards going into effect May 20, with plenty of unanswered de- tails as the deadline loomed closer, but Hoejsgaard remains positive overall. "Tough regulations have always been part of our life, part of our indus- try," he stressed, "and we have always managed, in the premium cigar indus- try, and we will also overcome this next round. But it's important that we all stand together, not only in the Domini- can Republic but Honduras, Nicaragua, and Cuba, to make sure we speak with one voice and we stand together and we are not we are not being lumped togeth- er with mass machine-made product." Cuba, he noted, has been absent from efforts to combat negative regulations. Without fail, the question of the open- ing of trade between the U.S. and Cuba is posed every year at Procigar, and with the recent, unprecedented developments by the Obama administration to nor- malize relations with Cuba and ease a number of restrictions, the question has become even more timely, but the indus- try doesn't foresee Cuban cigars reaching U.S. retail stores in the immediate future. "I think we all realize that it will hap- pen," said Hoejsgaard, "and depending on who wins the U.S. presidential elec- tion this year, it can be shorter or longer, but I don't think anybody thinks…the actual lifting of the embargo, which is the key thing…is going to happen before three to five years." When it does, the premium cigar industries in the Dominican Republic, Nicaragua, and Honduras will all face a new "big competitor," noted Hoejs- gaard, "but it's a competitor we know from the rest of the world… it will bring new excitement around the entire cigar market. I think that's just positive. The issue, of course, is supplies, because as we all know the Cubans need a bit of help and their production has basically declined over the past couple of years. So, if they have to supply and provide product for the U.S. market, other mar- kets around the world will suffer." As far as cigar companies returning to Cuba, buying tobacco there, or helping to grow tobacco in Cuba, Gomez stressed "that all depends." If only the embargo falls, but not the communist system, there would be lots of limitations still in place. Quesada, though, dismissed the prospect, citing a February 2016 Cigar Aficionado in- terview with Habanos S.A. co-president Nuñez Blanco, who said, "No. That will never happen. That is not part of our strategy, nor part of our thinking." > Nirka Reyes, president, De Los Reyes Cigars, seen examining curing tobacco in one of her family's barns, says dry weather this growing season has resulted in a very high quality crop.

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