July 30, 2009

Cigars industry falls on hard times

Increased taxes and smoking bans have plunged the U.S. cigar industry into dark , dark days, the president of an industry trade group said.

I can't even use the word cautiously optimistic, Norman Sharp, president of the Cigar Association of America told USA Today Thursday. These are dark, dark days, he said.

Dan Carr, chief operating officer of General Cigar, said cigar sales overall had dropped between 10 percent and 15 percent in the past year.

Besides health concerns, 17,000 cities have banned smoking in workplaces, restaurants and bars, the American Non-Smokers' Rights Foundation said.

In addition, tobacco tax increases are pending in 34 states, Carr said.

Federal taxes on large cigars jumped from 5 cents to 40 cents April 1 and small cigars were socked with a tax increase of $1 per pack, said Rich Perelman, editor of Cigarcyclopedia.com.

In Miami, Flor de Gonzalez Cigars said its tax bill per shipment rose from about $5,000 per 100,000 cigars to more than $40,000, the newspaper said.

They don't realize that at the end of the day, if we start losing jobs, and imports begin to drop, they're not going to accomplish their bottom line, which is to collect these taxes, said Yadi Gonzalez, president of the company.