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New Report: Tobacco Companies Exploit Regulatory and Tax Loopholes to Market Cheap, Sweet Cigars that Entice Kids

Cigars Sales Have Doubled Since 2000, and Teens Smoke Cigars at Twice the Rate of Adults
March 13, 2013

WASHINGTON, DC (March 13, 2013) – While cigarette smoking has been declining in the United States, cigar sales have more than doubled since 2000, driven by an explosion of cheap, sweet small cigars that entice kids, according to a report released today by the Campaign for Tobacco-Free Kids.

National surveys show high school students are twice as likely as adults – 13.1 percent compared to 6.6 percent – to report smoking cigars in the past month, and young adults (ages 18-24) smoke cigars at even higher rates (15.9 percent).

According to the report – Not Your Grandfather's Cigar: A New Generation of Cheap & Sweet Cigars Threatens a New Generation of Kids – tobacco companies have manipulated their products to evade regulations and higher tobacco taxes aimed at reducing smoking, especially among kids.

Under a landmark 2009 law, the Food and Drug Administration (FDA) banned candy- and fruit-flavored cigarettes. However, because the FDA does not currently regulate cigars, tobacco companies continue to market similarly flavored cigars. Some companies have modified their flavored cigarettes to meet the legal definition of cigars (e.g., by adding tobacco to the wrapper) and continued to market them with sweet flavors.

When another 2009 federal law significantly increased taxes on cigarettes and small cigars, but taxed larger cigars at lower rates, some manufacturers added weight to their products to qualify for the lower tax rate. According to a recent Bloomberg News report, one manufacturer has increased the weight of its cigars by adding a clay material used in kitty litter.

The report calls for closing these regulatory and tax loopholes:

  • The FDA, which currently regulates cigarettes, smokeless tobacco and roll-your-own tobacco, should extend its jurisdiction to all tobacco products, including cigars, as allowed by law.

  • Congress and the states should equalize taxes on all tobacco products at the same rate as cigarettes to eliminate incentives for tax evasion.

  • Congress should reject pending legislation that would totally exempt some cigars from regulation.

'This report tells the story of a predatory tobacco industry that continues to find new ways to target our kids, this time with cheap, sweet cigars that often are just cigarettes in disguise,' said Matthew L. Myers, President of the Campaign for Tobacco-Free Kids. 'Congress and the FDA must be equally aggressive in protecting our kids. They must ensure that all tobacco products are properly regulated and taxed to prevent kids from using them and protect public health.'

View a slideshow of cigar products.

The report's key findings include:

  • While cigarettes sales have been declining in the U.S., cigar sales have increased significantly. Between 2000 and 2012, cigar sales in the U.S. more than doubled – from six billion to more than 13 billion cigars a year. During the same period, cigarette sales declined by 33.8 percent.

  • The surge in cigar sales has been driven by a dramatic increase in the number and types of smaller cigar products, many of which are flavored, priced and packaged to appeal to young people. Cigars today are no longer just the 'big stogies' smoked by older men. Instead, the cigar market consists of products that vary widely in sizes, shapes, flavors and prices, making them appealing to a broader audience, including kids.

  • High school students and young adults smoke cigars at far higher rates than all adults. According to the national 2011 Youth Risk Behavior Survey, 13.1 percent of all high school students and 17.8 percent of high school boys smoked cigars in the past month. In contrast, the most recent national survey of adult cigar use (for 2009-2010) showed that 6.6 percent of all adults smoked cigars in the past month. Young adults (ages 18-24) have the highest cigar smoking rate at 15.9 percent. In addition, every state that reports cigar use data for youth shows that high school students smoke cigars at higher rates than adults.

  • In at least six states – Florida, Georgia, Maryland, Massachusetts, Rhode Island, and Wisconsin – youth cigar smoking now equals or surpasses cigarette smoking.

  • Flavored cigars are the most popular among youth. The most popular cigar brands among youth – including top three brands Black & Mild, Swisher Sweets and White Owl – come in a wide variety of flavors. Flavors include peach, strawberry, chocolate, grape, blueberry, wild apple, pineapple and watermelon. Some cigars also have flavor-oriented names, such as 'Da Bomb Blueberry' and 'Banana Split,' with obvious appeal to kids. A Florida survey showed that nearly three-fourths of high school cigar smokers smoked flavored cigars.

  • In addition to their sweet flavors, many cigar products are priced, packaged, promoted and placed in stores to appeal to kids. While cigarettes must be sold in packs of 20 and cannot be sold through self-service displays, cigars can be sold in any package size, including single sticks, and can be openly displayed on store countertops or even next to candy. Many have bright, colorful packaging and are promoted with discount pricing such as '3 for 99¢.' As result, many cigar products are attractive, affordable and accessible to kids.

  • Cigar smoking harms health. According to the National Cancer Institute and the U.S. Surgeon General, cigar smoking causes cancer, heart disease and chronic obstructive pulmonary disease (COPD). Cigar smoke contains the same toxins as cigarette smoke, and many new cigar products are more easily smoked and inhaled just like cigarettes.

The report warns that pending legislation before Congress to exempt some cigars from ALL regulation would invite further product manipulation. If this legislation were to become law, manufacturers might well modify their products in order to be exempt from regulation. The report points out that under current law, the FDA already has flexibility in how it regulates different tobacco products based on factors such as the harm the product causes and who uses it.