What You Need To Know About The FDA Regulations

Dear Valued Partner,

I hope business is thriving as we settle into the fall season and wind up to the 2016 holiday season. In May 2016, the Food & Drug Administration announced the long-awaited deeming regulations which brought all cigars under its regulatory authority with an effective date of August 8, 2016.   These regulations will certainly present challenges for our industry but rest assured that Santa Clara has been working hard to navigate the new regulation.  We believe we are in a unique position that allows us to utilize our resources and FDA experiences, and in a period of uncertainties one thing is for sure:  we will continue serving the adult cigar market as a key partner for years to come.

With that said, please allow me to share some focal points:

1. Santa Clara is in a strong position to address FDA Regulation

  • Internally and externally we have been preparing for 18+ months and have a solid foundation of resources and experience to comply with this new regulation.
  • Our manufacturing partners are diligently working on compliance and keeping us informed.

 2. Many of our brands are compliant with the FDA predicate date, meaning they were commercially available in the U.S. market on February 15,         2007

  • Our extensive inventory includes a large percentage of premium cigars and brands that were on the market as of February 15, 2007: Montecristo, Romeo y Julieta, H. Upmann, Fuente, Macanudo, Cohiba, and Punch to name a few.
  • This also includes key proprietary brands such as:  El Rey Del Mundo, La Finca, Rosa Cuba, Casa Blanca, Jose Marti, JR Alternatives, JR Ultimate, Maria Mancini, and many more.  These brands are not only top sellers today, but are expected to continue well into the future.

3. These regulations will impact how our customers do business

  • Retailers are also impacted by certain aspects of the FDA deeming regulations.  Current requirements, which are subject to FDA compliance inspections, include:  ID checks for anyone under age 27 and a ban on distributing free cigar samples.  In addition, over the next 18 months retailers will begin to see updated health warnings on packaging and advertising and, as of May 10, 2018, those that sell individual cigars, will be required to place a warning poster at each cash register location.  We will continue to keep you informed of these changes to help you navigate the coming years.

 4. The cigar industry is thriving

  • Yes, the new regulations affect us all in some aspect, but we are committed to working together so that cigars are available for many years to come for adult cigar consumers to purchase and enjoy.

We will continue to monitor and adjust our initiatives and product portfolio to supply our partners with premium and mass market cigars. We look forward to a continuing partnership in this industry that we are so passionate about.  Thank you.

Sincerely,

David Joyce, Director of Wholesale Operations


FDA Regulations Common Q&A for Retailers

1.  Can I provide free cigars to a consumer?

  • If the consumer makes a purchase at the POS, you can provide free cigars to them. E.g.; Buy 4 cigars, get 1 cigar free or buy a box, get 3 cigars & hat free.

2.  Can I assemble and sell my own samplers or bonus buys? E.g.:  assemble value bags with 5 cigars of the consumer’s choice for a price

  • The FDA’s position on retailer activities such as assembling samplers or bonus buys is not completely clear.  The FDA defines “tobacco product manufacturer” broadly to include repacker and relabeler.  We advise that these activities only be done after careful evaluation of the FDA Deeming Regulation and possible discussion with an attorney familiar with FDA tobacco issues.
  • However, we do believe that ‘build your own’ samplers assembled by the consumer would be permitted. E.g.; Build your own 20 count box and get 3 cigars free.

3.  Can I still conduct in-store events?

  • Yes, in-store events are still allowed.
  • Free ”cut & lights”’ for consumers are prohibited unless tied to a purchase at the event. E.g.; Buy 3 cigars, get a sample of the Montecristo Pilotico Pepe Mendez
  • Customers can be charged an entry fee for in-store events that includes a certain number of cigars per person.

 4.  Do I need to check ID’s for my regular customers who frequently visit the store?

  • Yes, as part of the new regulations, ID’s need to be checked each time for any consumer who is or looks under the age of 27.

For more information and updates regarding the FDA regulatory compliance, please review their website:
http://www.fda.gov/TobaccoProducts/GuidanceComplianceRegulatoryInformation/Retail/ucm205021.htm 

 

*The information above is based on our current understanding of the FDA Deeming Regulations.  You should not rely on this information as a source of legal advice and may want to seek legal advice from qualified counsel regarding these issues. *