I will help you out on this one. The reason no health groups were behind the little cigar tax is because they do not understand what Altria understands, which is that little cigars are cigarette substitutes (packed 20, filtered, lights, menthol, etc). That is why PM pushed this through in PA and is working dilligently in Michigan to get a similar measure passed.

Your conclusion that many little cigar smokers will switch to cigarillos is incorrect, as you can see from the previous paragraph these were not cigar smokers to begin with, they were cigarette smokers who converted to little cigars due to price, now they will go back to cigarettes or RYO.

Oh, and by the way, they picked 4 pounds per thousand because Black n Mild weighs slightly more than that and would not fall into the tax. Altria: Looking out For the Industry (which is us).

Regarding little cigars, PA just enacted a new budget on Friday that imposes a $.25/pack tax hike on cigarettes (from $1.35 to $1.60) and a new $1.60/pack tax on little cigars (which were previously untaxed).

PA’s definition (for tax purposes) of a little cigar is under 4 pounds per thousand (instead of the SCHIP definition of under 3 pounds per thousand), which appears to include little cigars that companies recently added a little bit more tobacco to in order to aviod the SCHIP $1/pack tax on little cigars.

What I found interesting is that none of the health groups were urging PA legislators to tax little cigars at the same $1.60/pack rate as cigarettes. Rather, CTFK, ACS, AHA, ALA were advocating a 59% of wholesale price for all OTP (and especially for smokeless). Meanwhile, Smokefree Pennsylvania was urging the legislature to enact Gov. Rendell’s proposed $.036/cigar tax (for all cigars) and a $.36/ounce tax on all smokeless and smoking tobacco.

A Philly Inquirer article indicated that Altria was urging the PA legislature to enact the $1.60/pack tax on all little cigars. If that is true, I suspect that Altria also urged the legislature to define little cigars as being under 4 pounds per thousand (instead of under 3 pounds per thousand).

Interestingly, PA Senate and House Republicans adamantly opposed any tax on smokeless and smoking tobacco or on large cigars (not sure if cigarillos fit the definition of little cigars). So I anticipate that many little cigar smokers will now switch to less expensive large cigars.

Also of interest, during the entire budget process, CTFK, ACS, AHA, ALA criticized Rendell’s more modest and fairer weight and piece based OTP tax proposal by insisting upon a far greater price based OTP tax of 59% of wholesale price, claiming that it would “eliminate the tobacco tax loophole by taxing OTP at the same rate of cigarettes”. These groups have made the exact same claim in urging the Ohio legislature to tax OTP at 59% of wholesale. But even with PA’s new $.25/pack cigarette tax hike, the new $1.60/pack tax is only 29% of the anticipated $5.50/pack cigarette wholesale price.

After I informed PA legislators of this false tax claim by these heatlh groups, the PA House approved a 30% OTP tax (instead of the 59% OTP tax bill that had been introduced and was advocated by these groups), which was subsequently rejected by the PA Senate.

I’m also not aware that CTFK, ACS, AHA, ALA advocated increasing the PA cigarette tax during the entire budget process, which (along with their actions regarding the FDA cigar flavorings) indicates to me that these anti tobacco groups are far more interested in going after OTP, flavored cigarettes and cigars, and electronic cigarettes than in reducing cigarette consumption (which makes no sense to me).

This is the first example of the new powers of Bart Stupak, who heads Oversight and Investigations for Waxman’s committee, and of the FDA itself but more importantly it is no doubt being aided and abetted by Altria since their John Middleton group never made cigarettes so Altria believes they would be exempt from the oversight faced by cigarette makers who now make little cigars and fits with Altria’s plan to eliminate all competitors under the guise of doing something for youth, while at the same time selling more Marlboro Lights to youth than all other products combined.

Those products weigh less, so an 8 ounce bag has half the federal tax than a one pound bag so it starts off 12 bucks cheaper, and then your state otp % is off a lower base

We are selling a lot of this product and we have a 71% OTP tax in our state!

you ought to check it out, it should work for you

As far as I am concerned, government can go pound sand.

You should try TubeCut and Superoll from Republic Tobacco. It weighs about half and gives people the same amount of cigarettes. We are selling a lot of it, and it’s about the only RYO we’re selling except Drum, Top and Buglar pouches. We have our retail stores listed on the the website, which they will do for you for free.

http://www.tubecuttobacco.com

We had a small but steady Clove and Sweet Dream clientele. That is gone now too.

The federal government is raiding the states treasuries with these new bans and taxes. The states will have to use their SCHIP allotments to shore up existing children’s health insurance plans, and be unable to add any new kids with insurance coverage.

This is nuts!

The letter said:

“Regarding the FDA ban on characterizing flavors which went into effect on September 22, 2009…. The law bans both the manufacturing and sale of all flavored cigarettes (except for regular and menthol brands). This includes our Clove and Mint brand styles, but does not affect any of our other brands. In the last few weeks, we have been actively removing our Clove and Mint brands from the market place as many states have begun delisting them from their approved directories.

Consistent with our obligations as a responsible manufacturer, we have discontinued our ‘A Touch of Cloves’ and all our Mint brands styles. Concerning our ‘Mint’ brands, while many competitors use a synthetic menthol flavoring to treat the tobacco in their products, we have always remained true to our heritage as a manufacturer of only all-natural 100% additive-free cigarettes. Since menthol is derived from nature’s own mint plant, our menthol-flavored cigarettes have always contained pure menthol crystals in our filters to impart a natural menthol flavor. And to differentiate our menthol products, we adopted the descriptor ‘Mint.’ Now, however, we have revised our packaging for these brands and changed the descriptor to ‘Menthol.’ Other than this slight name change, you can be assured the quality and enjoyment you and your adult customers have come to expect from these brands will continue to remain the same. Please note that both the UPC and product code will remain unchanged.”