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F
ive months after the FDA’s deeming
regulations were released, there are still
a lot of questions and much confusion
around what they mean for retailers.
Following up on our last issue, which offered a
regulatory overview by Tom Briant, executive
director of the National Association of Tobacco
Outlets,
TBI
took a more detailed look at what
the regulatory changes under way mean for the
retail landscape. Here’s what we found out.
First, the good news: As concerning as the
deeming regulations are, they could have been a
whole lot worse. For example, while many remain
concerned about what the requirements will ul-
timately mean for flavored tobacco, there is cur-
rently nothing in the regulations that prohibits
flavors in any of the newly regulated categories—
cigars, pipe tobacco, e-liquids and hookah prod-
ucts. “The only flavored products banned remain
flavored cigarettes, with the exception of men-
thol,” notes Briant.
Furthermore, self-service display of those newly
regulated products is also still permitted, as long as
no state or local law prohibiting them is in effect, in
which case such bans will remain in effect.Also, ac-
cessories do not fall under the FDA’s purview. FDA
regulatory authority now covers premium and do-
mestic cigars, e-cigarettes and all vapor products,
hookah tobacco, dissolvable nicotine products and
gels, but matches, lighters, humidors, cigar cutters,
ashtrays, hookah tongs and pipe tobacco pouches
are not regulated.
“However, ‘components’ and ‘parts’ as defined
by FDA are regulated,” cautions Briant. “That
means traditional tobacco pipes and, in the case
of vapor products, e-liquids and parts of the ap-
paratus, such as the cartridge or tank, batteries
and digital displays on tank models.”
What’s more, while the deeming regulations
do ban free samples, there is no provision against
buy-one-get-one-free promotions, nor does the
sampling ban prevent retailers from rewarding
regular customers through loyalty programs. (See
“Sizing up the Sampling Ban” sidebar, at right).
“Also, products that have been introduced and
are in the marketplace prior to August 8 will
be able to remain in market for a limited time
provided that their manufacturers file the neces-
sary applications to seek FDA approval for those
products,” adds Briant. In other words, it will be
status quo for stores shelves in the near term.
What is a free sample?
The FDA defines a free sample as a tobacco
product that does not cost the recipient any-
thing. In other words, no money changes hands
between the customer and the retailer.
Are promotions like buy two,
get one free or buy one, get one free banned?
The answer is no. That is because there is an
exchange of money between the customer
and the retailer in this type of promotion, so
the free product is not really free. Also, FDA
does not have the authority to regulate to-
bacco prices, and if the agency were to ban
those types of promotions that would be a
price regulation. Pricing is up to Congress, not
FDA. Finally, in 2012 a U.S. Court of Appeals
court made a ruling to address this issue and
they decided that while free samples can be
banned when no money exchanged hands,
promotional prices do not constitute free
samples and are to be allowed.
Are coupons banned?
Yes and no. If the coupon is for a free tobacco
product with no money exchanging hands, the
coupon is not allowed. However, if the coupon
is $1 off of the price of a product and the price
is more than $1, then the coupons are allowed
because there is still an exchange of money
between the customer and the retailer.
Are free products under loyalty
or award programs banned?
No, the U.S. court decision referred to above
found that loyalty programs are provided to
adults only and there is a prior exchange of
money to earn points or awards to apply to-
ward the free product at a later date thus mak-
ing the product not really free.
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Sizing Up the Sampling Ban
NATO’s Tom Briant offers these answers to the most frequently
asked questions about the FDA ban on free samples.
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TOBACCO BUSINESS INTERNATIONAL
SEPTEMBER/OCTOBER 2016