Altria takes aim on the cigar industry

Had someone from retail send this article to me knowing that I had over 30 years in the cigar selling business.

United States

Testifying at a Washington, DC Council hearing on September 29th, representatives of Altria Group Inc. said they would support a bill that would ban the sale of single cigars, except in tobacco shops, introduces weight-based requirements for the number of cigars per package, and requires all tobacco products to be sold from behind the counter. (Washington Examiner 09/30)

So when I read this I went “oh my it’s happening”. What are your thoughts on Altria’s insistence of placing it’s hands on the entire tobacco industry, now specifically cigars? My thoughts focus on the knowledge I have gathered from retailers that confide with me that they could build their tobacco business better if Altria/PM would just stop interfering. This can not be good! So many years with very little interference is coming to end in the cigar business.

Many have told this old cigar guy that this is not good at all!

Tell me I’m wrong! Or tell me am I right! Are those that have told me these things right or wrong?


#1 Patriot on 10.11.09 at 2:19 PM

Wow finally a posting that deals with the hidden agenda. Simply put from my perspective PM is always hiding behind it’s so called civic responsibility. As a retailer I get tired of PM hiding behind it’s contracts that manipulate the industry. Retailers unfortunately have just stood back and allowed this to happen. It still irks me that they never paid me back for the off-invoice allowance many years ago!

#2 luck-e-strike e-cigarettes on 10.11.09 at 11:41 PM

I don’t know why anyone should be surprised, chewing tobacco is next.

#3 jancascade on 10.12.09 at 12:21 AM

I kicked PM to the curb years ago. I wish more retailers would wake up and do the same. Who needs PM when they go behind the backs of their retailers and patrons and screw them?

#4 Jersey Boy on 10.12.09 at 12:30 PM

I’m wondering if anyone could help me understand how I can as a retailer market lower price cigarettes. I see some larger retailers have low price cigarette offers and get away with it. I mean I struggle to keep my customers but find that I’m told I’d be violating my contracts if I marketed lower price cigarettes. Would appreciate the help! I know this post was about cigars but I need help!

#5 OTP Kid on 10.13.09 at 1:53 PM

Word is Altria pushed for the OTP tax in Pennsylvania. Thanks boys!

#6 Cigar Retailer on 10.13.09 at 4:29 PM

It is incredible that Altria has no understanding of the cigar industry! Single-sell cigars are as old as the industry itself. Cigars are a completely different buiness than the cigarette industry. However,
they seem to want it to be the same, and it is just not working for them or the industry.
On another front;
Is it true they no longer will take back outdated/or unwanted Middleton products off my shelf and give me credit because they will not take back old product from my wholesaler? If the answer is yes; forget about trying new Black and whatever products.
True or not true?

#7 Bill Godshall on 10.13.09 at 7:06 PM

The news article exposing Altria’s support for (and drafting key clauses of) proposed DC cigar marketing restriction bill is at:

Among the provisions I suspect Altria supports are:
– ban the sale of single cigars, except in tobacco shops;
– set weight-based requirements for the number of cigars per package;
– require all tobacco products be sold from behind the counter.

While health groups have long advocated the latter provision, and while former Baltimore Health Commissioner Josh Sharfstein (who is also former Waxman staffer and now Deputy Commission at FDA who misreprestented health hazardous of electronic cigarettes) first proposed a single cigar sales ban, it appears that these provisions also benefit Altria at the expense of other cigar manufacturers.

Regarding comment by OTP Kid, Altria encouraged PA legislative leaders (if they were going to tax smokeless) to support Rendell’s more modest weight based tax for smokeless instead of taxing it as a percentage of wholesale price that CTFK, ACS, AHA, ALA were advocating.

Taxing smokeless by weight imposes the same tax on Altria’s premium priced Skoal and Copenhagen brands as discount moist snuff brands (e.g. Reynolds Conwood Grizzly) and at a slightly lower rate than heavier and declining chewing tobacco (which Swedish Match has leading market share), I support weight based tax on smokeless because it is a fairer tax (than a price based tax) for all snuff products, for lower risk snus and new lower weight dissolvable tobacco products.

I also support a piece based tax on cigars because it isn’t fair to tax a $10 cigar at 25 times the rate of a $.40 cigar. The primary impact of taxing cigars by price is to encourages premium cigar smokers to switch to cheaper cigars. Also, several of the worlds largest premium cigar internet retailers are based in PA, and threatened to move to Florida if cigars were taxed. While it is doubtful that they would have relocated if Rendell’s $.036/cigar tax was enacted, they would almost certainly relocate if a 59% (or even 30%) of wholesale price tax was enacted.

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