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August,
2009

Hav-A-Tampa Closing: an Avoidable Tragedy

Add a 40˘ tax onto the price of a $15, $10, or even $5 cigar instead of a 5˘ tax, and the impact a consumer’s purchasing habits isn’t likely to be dramatic. But, add that same 40˘ tax onto an inexpensive 40˘ cigar (before retailer markup) and you have an entirely different story. That, in a nutshell, was the final straw that pushed the second-to-last-piece of Tampa’s cigar history into the history books in June. I’d be hard pressed to put this development into perspective any better than the president of Tampa’s last remaining cigar factory, Eric Newman, who sent the following letter to the Tampa Tribune. — E. Edward Hoyt III

Last week, Hav-A-Tampa Cigar Co. announced the closing of its iconic cigar factory, which has been operating in Tampa since 1902.

Hav-A-Tampa’s closing is devastating for its nearly 500 employees. The factory’s demise is also tragic for our community.

There has never been a product that has promoted Tampa more than legendary Hav-a-Tampa cigars. For more than 100 years, Hav-A-Tampa has incorporated our city into its world-famous brand name.

Soon the factory will be gone. It is a sad day for the city of Tampa and its historic cigar industry, but the greatest tragedy is that this factory closing could have been avoided.

The deep recession has been challenging for Hav-A-Tampa, like all businesses, but the company was coping. The tipping point that pushed Hav-A-Tampa over the edge was the enormous 700 percent tax increase that Congress imposed on the cigar industry two months ago in order to expand health care for needy families.

Cigar-makers supported expanding the State Children’s Health Insurance Program. We believe everyone should have access to quality health care.

What we opposed was Congress’ decision to fund the expansion of this government program by taxing a single industry. Health care should be a shared responsibility.

We pleaded with the leaders of Congress not to tax us out of business. We explained how a 700 percent tax increase would cost jobs and force some cigar companies to close their doors.

Sadly, our pleas fell on deaf ears and what we feared has become reality.

When will Congress understand that it cannot dramatically raise taxes on businesses without costing jobs?

How ironic it is that many former Hav-A-Tampa employees could soon need assistance from the very government program whose expansion cost them their jobs and health insurance in the first place.

Business is challenging enough these days. By continuing to impose additional tax increases on already burdened businesses, Congress and state legislatures could quickly decimate an entire historic industry. When will our leaders learn?

Eric M. Newman is president of the J.C. Newman Cigar Co., which was founded by his grandfather in 1895, and president of the Cigar Manufacturers Association of Tampa.