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WASHINGTON STATE REDUCES CIGAR TAXES TO 50 CENTS A STICK! |
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 Plus: big month for imports in February
Los Angeles, April 28 – It’s almost enough to make a cigar lover cry.
Washington governor Christine Gregoire (D) signed Senate Bill 6097 into law last Saturday, rolling back the state’s tax on cigars from 129.42% to 75% of the wholesale price, with a cap of 50 cents tax on any individual cigar, in hopes of raising more money for the state budget by selling more cigars in-state.
Consider that a box of cigars which costs a retailer $100 at wholesale can now sell for $212.50 or less to the customer, where it would have sold for $329.42 under the old system. The new system will make Washington tobacco retailers competitive again, although still higher in price than discounters from out of state. The same “cap” system has also been in place in neighboring Oregon since January 2002.
Interestingly, at the same time that taxes on cigars were reduced, Washington state’s taxes on cigarettes were increased by $6 a carton and alcoholic beverage taxes zoomed up $1.33 per liter! All told, the “sin tax” bills passed by the Democrat-controlled state legislature are supposed to add $481 million annually to Washington state revenues. The new laws will be effective on or about July 23 of this year.
The rollback in the cigar taxes is a hopeful sign for smokers and the efforts of retailers in the state (especially at the legislative hearings), smokers who sent messages to legislators and the Cigar Association of America and Retail Tobacco Dealers of America for their quiet and efficient support all deserve congratulations.
Cigar imports fly high in February:
After slowing in January against 2004 totals, imports of premium, handmade cigars took off again in February.
Led by 14.77 million cigars from the Dominican Republic, imports reached 23.4 million in February and 33.0 million for the first two months of 2005. In comparison to 2004, imports of premium cigars were up by 9.9% for the month of February and up for the year by a slight 1.2%, not bad after a dull January.
The rise in February marked the 15th month in the last 18 that cigar imports have risen over the year previous, dating from September of 2003.
Import totals burst through the 300 million mark last year for the first time since 1998 and for only the third time ever. With the strong February report, imports – and sales – could be reach to march forward again. More news like that from Washington state above will certainly help.
Short smokes being challenged by new “Break Time” line:
We reported last week on the growth of little cigars, the cigarette-sized gems made with short filler and – most often – a homogenized tobacco leaf wrapper in brands such as Swisher Sweets Little Cigars, Dutch Treats, Winchester and so on.
Premium cigar makers have noted the trend toward shorter smokes, too, and while not in the three-to-five minute category of little cigars, short-length premiums are showing up in greater numbers.
The newest contender is American Stogies’ “Break Time,” an all-Nicaraguan cigar made by Nestor Plasencia and distributed by Bill Bock’s Indianhead firm in Miami, Florida.
“With cigar lovers being banned from indoor smoking nationwide, this 4 1/2-inch by 40-ring torpedo gives them 15 to 20 minutes of full-flavored smoking enjoyment,” said Bock.
It’s a cute cigar, offered in three different wrapper shades: Connecticut-seed Shade Grown, Cuban Corojo and maduro, ranging from medium to medium-to-full in body. Best of all, the Break Time size has a recommended retail price of just $1.95 each and is offered in boxes of 48.
At 4 1/2 inches, the Break Time is small, but is certainly not the smallest handmade cigar offered today. There are a dozen models at less than four inches, led by the Natural Aqua “Jucy Lucy” at three inches by 38 ring or the fatter Musashi “Sport” from Lars Tetens (3 x 45).
At 3 1/2 inches, you have a choice of lines with ring gauges from 43-46: Companion Red, Companion Silver, Macuro and Paul Garmirian. If you have to have a really fat, short cigar, check out three different blends from Felipe Gregorio:
• Felipe Dominicana Serie Especial FB (3 1/2 x 55);
• Felipe Gregorio Fat Boys (3 1/2 x 55), and the
• Felipe II Fat Boys (also 3 1/2 x 55).
Just make sure you’re paying attention when you smoke these, so that the only thing that burns is the cigar and not your finger, face or clothing!
~ Rich Perelman
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