FDA Increases Penalties for Tobacco Companies by 7.7 Percent

The U.S. Food & Drug Administration (FDA) has announced that it has increased the penalties that tobacco companies and retailers pay if they are found in violation of the various federal laws regarding tobacco products in the U.S.

These changes are part of the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015, which regulates how agencies can increase penalties in response to inflation. The civil monetary penalties are handed out to tobacco companies or retailers that are found to violate FDA’s rules regarding tobacco products. This could range from an e-cigarette company failing to use a proper warning label to a retailer caught selling a cigar without checking the I.D. of an undercover buyer.

FDA has increased the penalties by an average of 7.7 percent. The updated penalties are:

• First Violation — $0 (Warning Letter)
• 2 within a 12-month period — $345 (Previously $320)
• 3 within a 24-month period — $687 (Previously $638)
• 4 within a 24-month period — $2,757 (Previously $2,559)
• 5 within a 36-month period — $6,892 (Previously $6,397)
• 6 within a 48-month period — $13,785 (Previously $12,794)

Due to the cigar industry’s victory in Cigar Association of America et al. v. United States Food and Drug Administration et al., companies that only produce or sell “premium cigars” are unlikely to receive these penalties as they are subject to few rules that would result in penalty. That said, cigar retailers in America are still subject to FDA enforcement such as undercover buys for I.D. verification.