A flavored cigar ban could cost 16,000 jobs, industry report finds
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A flavored cigar ban could cost 16,000 jobs, industry report finds

A ban on flavored cigars could have significant economic consequences while doing little to reduce youth smoking.

The Biden administration’s proposed ban on flavored cigars could destroy up to 16,000 U.S. jobs and wipe out $4 billion of the industry’s sales, according to a study conducted by Policy Navigation Group, a lobbying firm that has worked with companies in the tobacco industry. The report, cited by the Cigar Association of America (CAA), argues the Food and Drug Administration substantially underestimates the economic and social costs of the proposed rule.

The FDA rule banning flavored cigars, introduced on April 28, 2022, would also prohibit menthol cigarettes. The rule currently sits with the U.S. Office of Management and Budget (OMB), which is responsible for reviewing the costs and benefits of the policy before it’s sent back to the FDA to be finalized. The rule could be finalized in the coming days.

The FDA claims flavored cigars are an incredibly enticing prospect for kids, and to mitigate the risks of youth smoking, these products should be banned. If there ever was any truth to this claim in the past, it’s certainly not the case today.

According to the 2023 National Youth Tobacco Survey by the Centers for Disease Control and Prevention, just 1.8 percent of high school students have puffed on a cigar in a given month. These numbers are dramatically lower than other substances kids shouldn’t be using, such as alcohol or marijuana, clocking in at 22.7 and 15.8 percent, respectively. Tobacco researchers consistently find that the overall use of cigars is both low and almost entirely confined to adults. 

“We presented evidence to OMB that FDA’s proposed flavored cigar ban dramatically fails to meet the criteria necessary for such a ban under the Tobacco Control Act, offering little or no public health benefit while having a devastating economic impact on the industry,” said CAA President David Ozgo in a statement.

Massachusetts and California are the only states to have banned flavored tobacco products. But neither state saw sufficient reasoning for a total ban on flavored cigars and made exceptions for these products based on the sale location or the price

A federal prohibition of flavored cigars would likely result in the same problems we expect to see from a ban on menthol cigarettes: a rise in illicit market sales trafficked from locations where the products are legal, such as Mexico. When combined with the proposed ban on menthol cigarettes, the prohibition of flavored cigars would give an enormous profit opportunity to cartels already engaged in drug smuggling, gun running, and human trafficking. 

“We are concerned that Mexican transnational criminal organizations, and other criminal elements, could seek to exploit black market opportunities that such policies could create. If FDA moves forward with such policies, it must take steps to mitigate this risk,” Sens. Marco Rubio (R–FL), Bill Cassidy (R–LA), Ted Budd (R–NC), and Bill Hagerty (R–TN) wrote to FDA Commissioner Robert Califf in July. 

These concerns are well-justified, but the senators will indeed end up disappointed by any potential efforts to control the illegal tobacco market. Just as law enforcement has proven incapable of interdicting drug trafficking at the border, it’s doubtful the authorities will be able to cope with a fresh surge in new illicit products.

Tobacco prohibitions worldwide frequently fail to deliver on the benefits their advocates claim for them. Bhutan banned all tobacco in 2004 but abandoned prohibition in 2020 after the policy failed. South Africa banned tobacco during the COVID-19 pandemic and suffered a wave of smuggling. When the European Union banned menthol cigarettes, Poland, which had the biggest menthol market in the E.U., experienced no statistically significant change in cigarette consumption as smokers sourced cigarettes from neighboring countries or switched to non-menthol cigarettes.

With few to no public health benefits and significant risks of increasing the illicit market, it’s difficult to ascertain the administration’s rationale for banning flavored cigars. Adults who prefer a flavored cigar are not imposing significant health or fiscal costs on non-smokers.