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October,
2009

TOBACCO INDUSTRY NEWS
Production, Distribution, Regulation, Trade...

Rocky Start to FDA Regulation of Tobacco as Lawsuits Fly
Flavored Cigarette Ban Jolts Certain Cigar Makers,
Blindsides RYO Paper Makers


Washington, D.C. - Industry appeals to the Federal Drug Authority (FDA) requesting that it clarify the “special rules for cigarettes” contained within the Family Smoking Prevention and Tobacco Control Act (FSPTCA) were intended clear up confusion over which tobacco products were affected by the ban on cigarettes with “characterizing flavor” but instead left key questions unanswered while delivering additional bad news for RYO paper makers.

The late fleury of activity was sparked by a Sept. 14 letter from the FDA reminding the industry of the impending Sept. 22 effective date that a cigarette - or any of its component parts (including tobacco, filter, paper) - may not contain “characterizing flavors.” A troubling passage from the letter read, “This standard applies to all tobacco products that meet the definition of a ‘cigarette’ in section 900(3) of the Act even if they are not labeled as ‘cigarettes’ or are labeled as cigars or as some other product.” The industry quickly requested clarification from the FDA if it was intending to regulate little cigars and other filtered cigars through this interpretation, despite the fact that FDA authority over tobacco extends only to cigarettes and cigarette tobacco.

Kretek International, which imports Djarum filtered clove cigars, suspended distribution of the product, stating that “prudent action is the safe course until we have clarification regarding the FDA interpretation of “cigarette” and “cigar” under the Federal Cigarette Labeling Act.

On Sept. 22, the day the ban became effective, the FDA issued advisory documents stating that a consumer-rolled (RYO) cigarette is in fact a cigarette under the act’s definition, so rolling papers and filters intended for use in roll-your-own cigarettes may not contain a characterizing flavor. Manufacturers immediately suspended sales of flavored rolling papers and, in the case of Republic Tobacco, even legal flavored cigar wraps.

Unanswered was whether cigar makers whose products “appear” like cigarettes were in the legal clear. In a media briefing conference call that same day, Catherine Lorraine, an attorney with the FDA’s Center for Tobacco Products, left the door wide open, stating that the agency would use the Food, Drug, and Cosmetic Act definition of a cigarette, not longstanding tax definitions, referring to “the portion of the definition of a cigarette which specifically refers to the appearance of the product and how it is perceived and offered for sale to consumers,” she said. “And so we will be looking at products on an individual basis to determine if it meets that aspect of the definition of a cigarette.”


Kretek International Sues FDA over Flavored Cigars

Moorpark, Calif. - In an effort to fend off the FDA’s stated attempt to exceed its legislative authority to regulate flavored cigarettes and ban other tobacco products as well, Kretek International sued the agency on Sept. 23 requesting a declaratory judgement. Kretek said the purpose of its action was to prevent the FDA from moving against its current Djarum cigar products, which were classified by the Tobacco Tax and Trade Bureau as cigars under the code of federal regulations. “The difference between cigarettes and cigars has been clearly defined by standing law for more than 30 years,” the company declared in a statement, adding “this longstanding legal distinction between cigarettes and cigars was included as part of the new FDA law.

“We have made every effort to meet the letter and spirit of the law and to ensure that these products are displayed in the cigar section of the tobacco counter,” said John Geoghegan of Kretek. “The Djarum product is clearly labeled as a cigar in at least seven places on the pack, in addition to clear merchandising messaging.”


The Complete Guide to Cigars, Playboy Style

“The Playboy take on the good life has always been a simple one: It’s all about what accessories to sport, what drink to order, and what car to drive to get the girl.”
- Hugh M. Hefner

For more than half a century, from the first page of its first issue, Playboy magazine has underscored the “art of smoking.” In that smoky spirit comes “Playboy: The Complete Guide to Cigars.” It seems long overdue.

From the sun-drenched shores of Cuba and the Dominican Republic, to some of the world’s most exclusive stores, this full-color, 142-page hard cover coffee special edition book from Altadis U.S.A. (maker of Playboy cigars) details the life and times of one of the last truly artisanal luxuries. Tracing cigars from their origins in pre-Columbian America, it shows how skilled craftsmen create them from select tobacco leaves, following their journey from seeds to cigar shop, and demonstrates how to choose, store, cut, light, and smoke. Unlike any other cigar book, this one includes highlight from the Playboy playmate archives.

Authored by Aaron Sigmond, founding editor of Smoke magazine and The Cigar Report, and co-authored by Nick Kolakowski, “Playboy: The Complete Guide to Cigars” Special Edition from Altadis U.S.A. will be available exclusively in fine tobacconists this fall and excerpted in the November issue of Playboy. In spring 2010 a full-production, non-Altadis version will debut in bookstores.


Republic Group Acquires Bollore’s Cigarette Papers

Glenview, IL - Republic Group, Inc. has purchased the cigarette paper business of French conglomerate Bolloré Group. The acquisition is a continuation of the majority purchase made by Republic in 2000 of Bolloré’s smoking accessories division - since renamed Republic Technologies - which included the rolling paper brands OCB, Zig Zag, and Job. At the time, Bolloré - which traces its roots to the opening of the Papeteries de L’Odet factory in Brittany, France - had retained a 19% interest.

Terms of the new deal, which closed on July 28, were not released.

The Republic Group is a family business owned by Donald Levin specializing in the production of RYO booklets. It operates production facilities in Lake Waccama, N.C.; Perpignan, France; Barcelona, Spain; Fürstenfeld, Austria; and Montreal, Canada. With the new acquisition, Republic Group now adds production facilities located in Thonon-les-Bains and Laval, France. The company also owns Republic Tobacco L.P., as well as and several European distribution companies.



SMOKESHOP - October, 2009