Headed for a Cuban import crisis?

An influx of long-banned Cuban cigars could reach U.S. shores just as American brands are hit with sweeping new regulations from the Obama administration — a double whammy that some fear could snuff out the industry.

The president’s move to normalize relations with Havana could open the flood gates to the island’s famous cigars coming to America, warned Frank Herrera, a lawyer who represents several U.S. cigar companies in a legal battle against the Cuban government. 

{mosads}“They’re attacking the cigar industry 100 percent,” Herrera charged.

Experts predict that, if given the option, smokers would at least initially gravitate toward Cuban cigars because they have been a “forbidden fruit” for more than 50 years.

“Cuban cigars are sexy and attractive to the U.S. market,” said Jake Colvin, vice president of the National Foreign Trade Council.

Furthermore, the frenzy surrounding
 Cuban cigars could give way to “knock-offs” and counterfeit cigars, Herrera said, which would further hurt U.S. producers.

That could spell trouble for American cigar-makers, said Herrera, who also owns a small cigar company.

“Smokers will no doubt walk into cigar stores and say, ‘Hey, do you have Cubans now?’ ” Herrera said. “So cigar stores will probably slow down their purchase of non-Cuban cigars in favor of purchasing more Cubans.”

Under the eased restrictions, American travelers can only bring back $100 worth of alcohol and tobacco products from Cuba, and U.S. stores are still banned from selling Cuban cigars.

Still, Herrera believes it’s only a matter of time until Congress ends the embargo altogether and Cuban cigars can be sold legally in the U.S.

Once that happens, Herrera estimates the pent-up demand for Cuban cigars could help producers capture as much as 20 percent to 30 percent of the U.S. market.

Others are optimistic that the pain will be short-lived.

“At the beginning, it will hurt, because of the novelty of Cuban cigars. Everyone’s going to smoke a few after so many years of not having them,” said Benny Gomez, owner of Inter-America Cigar Co. 

“But I do believe the hype will die down eventually.” 

Some American cigar-
makers see a bright side to lifting the embargo. They say excitement about Cuban cigars could also raise interest in the whole industry, including the cigars they make.

There is interest among some U.S. firms in mixing Cuban tobacco in their cigars — though obtaining tobacco from the communist nation could be complicated by supply issues, some say.

“It would add to the mystique of the cigars that we’re making,” said Eric Newman, president of J.C. Newman Cigar Co., one of the largest American cigar companies.

Of greater concern to many American cigar companies are smoking regulations proposed by the Food and Drug Administration. Under the rules, cigar companies would be required to receive government approval before introducing new product lines and issue new health warnings.

Newman suggested the smoking regulations could shutter his company.

“We can deal with smoking bans, we can deal with the Cuban embargo, we can deal with high taxes — but we’re really concerned about the regulations from the FDA that could wipe us out of business,” Newman said.

The smoking regulations could effectively halt production of new cigars, said Craig Williamson, president of the Cigar Association of America, which represents U.S. manufacturers.

New cigars would require FDA approval before they can be sold; the agency already has a backlog of tobacco products that have been waiting years for approval, he explained.

This could delay new cigars from getting to the market, critics say.

Cigar-makers could also be prohibited from offering samples to customers. 

The FDA is considering exempting premium cigars from those restrictions, but most cigar companies would not qualify for the exemption, said Glynn Loope, executive director of Cigar Rights of America, which represents cigar consumers.

Much like wineries, the life of the cigar industry depends on letting customers sample different products before they buy, Loope said.

“The way we grow our business is we go out and steal our competitors’ customers,” Newman said. “How do you do that? You go out and stick a cigar in a guy’s mouth and say, ‘Isn’t that the best cigar you’ve ever smoked?’ ”

“Prohibition didn’t work 80 years ago, and hopefully it won’t work now,” he added.