16
TOBACCO BUSINESS
SEPTEMBER/OCTOBER 2013
NEWS & TRENDS
September/october 2013
ECO-CIGS C-Store
Sales Make Big Leap
Nielsen data shows revenue grew 164 percent
in the first half of 2013.
C-Store
Corner
Riding the rapid growth of the
electronic cigarette category,
ECO-CIGS’ monthly U.S. con-
venience store sales rose 164
percent in the first half of 2013,
according to a new report by
Nielsen. That significant jump
far surpassed the segment’s
overall sales growth of nearly
36 percent for the same January
through June timeframe.
“In the first six months of this
year, we’ve focused on expand-
ing our distribution network and
growing the number of stores
carrying our products,” says
Tony Vecchie, ECO-CIGS senior
vice president of sales and dis-
tribution. “It’s gratifying to see
our hard work and the hard
work of our distributors and re-
tail partners pay off in increased
sales. Looking ahead, we be-
lieve we’ve taken the steps to
continue growing through the
end of 2013 and beyond.”
Drew Estate Snaps Up
the Heavenly Cigar Company
The manufacturer of the ACID cigar line has added
Heavenly’s brands and inventory to its repertoire.
In June, Drew Estate, Inc. acquired Naples, Flori-
da-based Heavenly Cigar Company. As a result of
the acquisition, Drew Estate will take ownership
of all of Heavenly Cigar’s brands and its current
inventory; the company will also take responsibil-
ity for all future sales and marketing activities.
“We are extremely excited about this acquisition and look forward to
building the Heavenly Cigar brand further across the U.S.,” says Michael
Cellucci, president of Drew Estate, who says no changes are currently
planned for Heavenly’s assortment of premium cigar products.
“We believe that with our expertise and innovation we have the ability
to fully realize the potential of the Heavenly line of products,” Cellucci
added.
Letters to manufacturers and one retailer
warn against promoting and selling RYO
tobacco as “pipe tobacco.”
The Food & Drug Administration (FDA) has issued
warning letters to three tobacco manufacturers and
one tobacco retailer for promoting or selling illegal
cigarette or RYO tobacco products labeled as “pipe
tobacco.” The move suggests the agency is seeking
toclosea “loophole” that the industry resorted toafter
SCHIP raised the tax on RYO tobacco from $1.10 per
pound to $24.78 per pound in 2009.
Tobacco critics claim that manufacturers and re-
tailers are misbranding the products to avoid paying
the higher federal taxes that currently apply to RYO
tobacco, but not to pipe tobacco.
As one of the letters stated:
“We note that under the ‘Pipe Tobacco’ section
of your website, you present graphic images of the
product brands...which are promoted or labeled as
‘pipe tobacco’; however, the overall presentation
of these products strongly suggests that they are
intended for use in a cigarette. Specifically, in your
‘Pipe Tobacco’ section of the website, you promote
these product brands for sale with cigarette-injector
machines or as part of roll-your-own starter packages
or starter kits, which include tobacco, cigarette tubes
and a cigarette machine. This presentation suggests
that your products are intended to be used to make
cigarettes with the cigarette machines and cigarette
tubes with which you promote them. Because the
overall presentation of your products, which consist
of loose tobacco, suggests that they are intended for
use in cigarettes, theymeet the FD&C Act’s definition
of ‘cigarette tobacco.’”
If the FDAviolations are not addressed, the retailers
and manufacturers warned may face sanctions that
include monetary penalties, seizure of the product,
no-tobacco-sale orders and criminal prosecution.
The FDA letters also cited other violations of the
agency’s tobacco regulations, including the use of
prohibited cigarette flavorings and banned terms
such as “light” that imply some cigarettes are less
harmful.
FDA Warning:
Promoting RYO
as Pipe Tobacco
is Off-Limits
