“New” Products

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On Aug. 8, 2016, FDA's deeming regulations took effect which meant the way that cigar makers introduced new cigars in the United States dramatically changed.

Prior to Aug. 8, cigar makers could create the new cigar brands with zero restrictions. Effective Aug. 8, 2016, it seemed unlikely that any new cigars would be introduced for quite some time.

FDA Didn't Ban New Cigars

It's important to understand that FDA never banned new product.

Instead, FDA requires all new cigars to receive approval before they can be sold on the market. There are multiple ways to gain product approval but as of May 2019, FDA is still making changes to those processes. The agency also announced in March 2019 that it would delay its testing deadline for cigars until after it finalized the testing protocol, which does not have a current timeline.

FDA will accept submissions for companies filling for substantial equivelance—and it's at least technically possible one could be approved—it seems highly unlikely that FDA will approve any new cigars via the substantial equivalence pathway, which is how the agency said it believes most—if not all—cigars will be approved.

Aug. 8, 2016

Manufacturers found somewhat of a loophole in the new rules. FDA announced the regulations on May 5, 2016 but they didn't go into effect until Aug. 8, 2016. The roughly 90-day window meant that companies could introduce new cigars to market up until Aug. 8, 2016 and avoid the FDA approval process.

Because FDA isn't testing cigars, it also meant that—albeit not entirely legally—manufacturers could ship new products into the market prior to Aug. 8 and then change the blends. While likely not legal, there also isn't much of any way FDA would ever be able to prove these changes.

There were a few things that could not be changed once the products were introduced:

  • Packaging*
  • Box-Counts
  • Sizes

*FDA's initial rules allowed for minor packaging changes, but not major changes. FDA described allowed changes such as making a word smaller or changing a shade of color. Major changes were described as changing logos or colors. As noted below (see Reynolds Lawsuit), none of this ended up mattering.

Phantom Brands

FDA doesn't give a specific threshold by a which a cigar has been successfully "marketed" to show that it is no longer new effective Aug. 8, 2016. As such, companies took many different approaches to introduce these brands.

Some companies shipped these products to multiple retailers in multiple states who then put the cigars on their shelves, and in some cases, sold them to actual consumers. Others went as far as to making sure the cigars were sold both online and in stores.

There were other companies who were a bit more secretive, particularly companies that also owned their own retail stores, who were able to place the cigars on shelves and then quickly remove them.

We coined these cigars "phantom brands" because they largely weren't intended for the public to find about them. It's estimated that tens of thousands of new SKUs were added during this time.

While these rules might have been new for cigar companies, they weren't new for all tobacco companies. Barely one week after the new rules went into effect, FDA lost a court case to a group of large cigarette companies who had sued over whether FDA could enforce rules that designated a product new if all that changed was the design of the packaging or the number of items in said packaging.

FDA won the claim regarding the quantity changes but lost the one regarding the design changes.

It dramatically changes how the deeming regulations will be enforced. Prior, FDA was able to define an item based on the tobacco product itself and the way it was packaged. Now, it lost the ability to enforce a product based on the way it looks.

This meant that cigar companies could change the packaging for not just the phantom brands—many of which were rushed to market with haphazard packaging—but also all existing items. That also meant that companies like Davidoff no longer had to worry about whether it would have to revert to old Camacho packaging or risk losing the brand's grandfather status.

The decision also opened the door for even more new product after Aug. 8, 2016. Now a cigar company could take an existing product and simply change the design of its packaging and introduce it back to market, something that has happened time and time again since then.

Last Updated: May 24, 2019.

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