Nearly $4 billion and as much as 47% of industry sales lost
WASHINGTON, Jan. 26, 2023 /PRNewswire/ –The Cigar Association of America (CAA) today released an economic impact fact sheet about the Food and Drug Administration’s (FDA) proposal to ban flavored cigars, showing the devastating effect it would have on the industry’s sales and employment, as well as on federal, state, and local tax revenue.
FDA’s justification for the ban is that flavors in cigars “increase appeal” to youth. Yet CAA points out that, according to the government’s own data, under one percent of youth consume flavored cigars, so the ban’s “benefits would be almost non-existent.”
According to the document, in 2021 flavored cigars accounted for as much as 47 percent of the total industry cigar sales (depending on how FDA decides to apply the proposal’s vague definition of “characterizing flavor”), amounting to approximately seven billion cigars.
An economic impact analysis projected losses of nearly $4 billion in retail sales, over 16,000 jobs, and $840 million in wages, as well as an estimated $750 million in federal, state and local tax revenues.
CAA President David Ozgo said, “Since almost no youth use flavored cigars, any reduction in youth usage as a result of the proposed ban would be almost nonexistent. Thus, FDA proposes to crush a legitimate adult-focused industry, eliminate thousands of jobs, and sacrifice millions of dollars in tax revenue using the flimsiest of data. It is nothing less than a solution in search of a problem.”
FDA first filed the proposed rule on May 4, 2022. The Federal Register link can be found here.
For the full Economic Impact Fact Sheet on FDA’s Proposed Flavored Cigar Ban, click here.
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SOURCE Cigar Association of America, Inc.