Bam's cigar trouble

Reuters

A customer picks out cigars in a cigar store in downtown Buenos Aires, September 1, 2004.

Article Highlights

  • Could cigars tip the election? “Stogie-gate” is capturing lots of headlines in Florida, a key state in #Election2012.

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  • 85,000 Americans work in the premium-cigar business, putting many jobs in jeopardy if the FDA’s regulations move forward.

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  • Whatever the FDA does, the fight reveals a trend of expanding the scope of regulation to areas Congress never envisioned.

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Could cigars tip this year’s election?

President Obama’s Food and Drug Administration is widely rumored to be working on a new regulation that would ban sales of cigars through mail-order clubs and maybe even humidors — when the cigar-friendly state of Florida could determine the winner in the presidential race.

At issue is a draft FDA regulation that insiders say would “deem” cigars subject to many of the provisions of a 2009 law that gave the agency the power to oversee the sale of tobacco products.

The rising use of machine-made cigars by underage smokers has long troubled the FDA. But the new regulation apparently wouldn’t clearly distinguish these cheap, small cigars from larger, premium brands smoked by adults.

Among other things, the regulation could require the sellers of high-end cigars to store stogies in separate rooms accessible only to employees. Rather than selecting cigars by walking through fragrant humidors, shoppers would be forced to buy them off a list — with the stogies stored behind the counter. Plus, the FDA measure could effectively shutter mail-order sales as well as popular “cigar of the month” clubs.

About 85,000 Americans work in the premium-cigar business, according to the industry’s main trade group. Many of these jobs would be in jeopardy if the FDA’s regulations went forward. About 75 percent of the domestic importers and producers of cigars are located in Florida, where it’s a $2 billion-a-year industry.

The rumors have stoked so much consternation that Congress is advancing a bill to block the FDA, exempting premium cigars from regulation. The measure already has 220 bipartisan cosponsors, including Democratic Sen. Bill Nelson of Florida.

"Whatever the FDA does, the fight reveals a broader trend of expanding the scope of regulation to cover areas never envisioned by Congress." -Scott GottliebEven before it’s voted on, the bill may prompt the FDA to take a middle road: The agency could argue that the premium cigars fall within its jurisdiction as a “tobacco product,” but that, for now, it will exercise discretion and not regulate the high-end smokes.

Whatever the FDA does, the fight reveals a broader trend of expanding the scope of regulation to cover areas never envisioned by Congress.

Regulators often prefer to enlarge their jurisdiction rather than tend to their chief obligations. Agencies like the FDA thus divert their attention from important but basic duties.

For example, that 2009 tobacco law was crafted as a way to cut down on underage use of cigarettes. It was, in many respects, a forward-looking measure — envisioning that traditional cigarette makers would gradually transition to developing and marketing smokeless-tobacco products that don’t pose the same health hazards as cigarettes.

But the FDA has been loath to accept that alternative tobacco products could pose a lower health risk than cigarettes. Under the law, it should be examining the relative hazards, rather than spending its energies seeking to expand its powers.

And its reluctance to embrace the work of examining (and potentially approving) alternative tobacco products may have the perverse effect of more fully implanting the big tobacco companies in the business of making and marketing cigarettes.

Stogie-gate is capturing lots of headlines in Florida — a state that’s home to a vibrant cigar industry. The administration may decide it’s politically wise to table its regulation until after the November election, rather than risk a backlash.

But the president’s regulators have already shown their cards. It’s a team that’s been too easily seduced by fashionable distractions, and will cause a lot of jobs to needlessly go up in smoke.

Scott Gottlieb is an American Enterprise Institute resident fellow.

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