66
TOBACCO BUSINESS
SEPTEMBER/OCTOBER 2013
launch. In the meantime, it is in the midst
of launching Hot Rod pipe tobacco, a new
product in a category as yet unregulated by
the FDA.
However,already this newproduct is under
legislative attack. In May, five U.S. Senators
introduced Senate Bill Number 826, which
would “impose tax parity” on other tobacco
products (OTP) such as cigars, pipe tobacco,
RYO tobacco, chewing tobacco, moist snuff
and snus. For pipe tobacco, this translates to
a proposed increase in the current federal tax
rate from $2.83 a pound to $49.55 a pound.
Needless to say, manufacturers and industry
associations are fighting the legislation
through grass roots campaigns.
“We put a card inside all our products
manufactured over two months telling people
to contact their representatives,bring the bill to
their attention and ask that they vote against
it,” said Ewald. “We also have information
on our web site about how to get in contact
with your senator. I know a lot of people don’t
want to get involved, but we try to stay on top
of things that will be catastrophic to a lot of
people. Everybody needs to work together to
be sure that this bill doesn’t [pass].”
Future Focus
Great Midwest has also expanded
production of its line of 100s tubes, which
are selling nicely.“We have had 100s tubes
for a long time, but we were marketing
them very selectively,” explains Ewald.
“We increased production on the regular
(full), smooth (slightly), and menthol 100s
to make that line available to everyone.
We’ve seen a 100 percent increase of
sales as a result.” Going forward, Ewald
remains optimistic, despite the hurdles
the company has had to skirt around
and those on the horizon. “Increases are
not what they were when everyone was
jumping into the in-store RYO machines,
but things are steady,” he says. “And we
are a small, American-owned company
that makes products in the U.S. and works
closely with our accounts—which gives us
the ability to out-serve our competitors.
We can manufacture and have product
anywhere in the U.S. within 10 days, while
people who wait for overseas shipments
can take as long as four to six weeks to
deliver.That’s our edge.”
TB
“Increases are not what they were
when everyone was jumping into the in-store
RYO machines, but things are steady.”
