Thomas A. Briant, Executive Director of The National Association of Tobacco Outlets, Inc. (NATO) reported to CSPnet.com (Convenience Store and Fuel News) that he and NATO President, Mary Szarmach, met with officials from the Office of Management and Budget (OMB) on December 4 to express and discuss the serious concerns with the proposed US Food and Drug Administration (FDA) proposed deeming regulations of premium cigars and pipe and other tobacco products, as well as the implications to the tobacco industry shoud the regulations pass. The proposed FDA regulations are in the near final phase, as they were submitted to the OMB for economic review in October 2015 (see Proposed FDA Regulations of Premium Cigars & Pipe Tobacco Moves Into the Next, and Almost Final, Phase). The OMB is now charged with the economic benefit and cost analysis of the proposed regulations, and its officials have been meeting with parties who wish to express their concerns and provide meaningful feedback since October.
Should the proposed regulations "deem" that the currently unregulated premium cigars and other tobacco products should be regulated under FDA authority, thousands of these products would be unable to remain on the market due to the requirement to file a Pre-Market Tobacco Application (PMTA) with the FDA for each product SKU. This requirement, and filing process, is accompanied by an extraordinarily high cost - approximately $2+ million, according to a previously published Wall Street Journal article. As many manufacturers lack the financial resources to comply with this filing, they may be legally forced to remove products from retailers' shelves within 24 month after the the effective date of the regulations. The FDA's analysis indicates that approximately 10-50% of premium cigar products could potentially be removed from the market, rendering a significant financial blow to cigar manufacturers as a result of reduction of retail sales as well as loss of retail and manufacturing jobs. Of concern is a statement in the FDA analysis that mentions "for the nation as a whole, employment gains from spending on other products would offset any employment losses from reduced spending on tobacco products.” (WOW! I would really like to hear more of the details that drove that conclusion...)
The OMB does not provide any commentary on any pending reviews or meetings, and they will continue to schedule meetings with interested parties, as it appears that they have been receptive to feedback. It has been reported that various individuals and groups who have met with the OMB have been quite optimistic about the process. At this point, there is no definite timetable for the agency to complete its review and determine recommendations regarding the FDA’s deeming regulations.