Dear National Cigar Smokers,

As you may or may not know, we had been using the same price list since April 2004 with the same prices on our cigars that had been held for five years.  (Of course due to particular retailers having to increase their cigar prices over this five year period due to their own rising overhead costs in order to run their businesses, you may have seen our cigars increase in price to you the cigar smoker.)  WE HAVE HELD OUR CIGAR PRICES FOR FIVE YEARS.

Unlike many businesses that have petitioned the federal government for bailouts; we have stood on our own, become as efficient as possible and given you, our cigar smokers, the best product for the money that we could manufacture for you.  However, there is an old saying that states that “no good deed goes unpunished.”

For all our efforts, the U.S. House of Representatives passed H.R. 2 and the Senate passed the bill into law as S. 275 and the new president has signed into law the State Children’s Health Insurance Program Reauthorization Act of 2009 (or S-CHIP) with all financing of the program to come from an increase in excise taxes on all tobacco products of tobacco manufacturers (cigarettes, cigars, pipe tobacco, chewing, snuff, roll your own, etc.).  So as a cigar manufacturer we are going to be punished by the federal government for our good efforts in the past!

Beginning April 1, 2009, the excise tax on cigarettes went up from 39¢ per pack to $1.0066 per pack or 2-1/2 times increase).  The tax rate on large cigars went from 20.719% to 52.75% (2-1/2 times increase).  But the cap on cigars (the highest amount to pay) went up from about $2.50 per box of 50 cigars to just over $20.00 per box of 50 cigars.
In effect, tobacco consumers are being forced to pay for a program for which the rest of society is not being asked to pay.

This is wrong and in our opinion tobacco consumers, or any other particular group of consumers, should not be asked to pay for a government program by themselves without the help of their fellow citizens.  But that is the reality of it.  You can inquire as to how your congressman or senators voted on this legislation (we have printed all the voting results at the bottom of this page), but there is not much else any of us can do about the law now.  Most of our elected officials are not at all worried about a backlash from tobacco consumers who might have supported them in the past.  They have different priorities and they assume that you won't know how they voted, forget where they stood, or just won't care enough to hold it against them the next time you go to the polls to vote.

We had to begin charging this new tax on all our cigars and collect it for the federal government, but we would hope that our distributors and retailers would consider passing this tax onto our cigar smokers, straight through dollar for dollar, without any additional markup on the increase in the excise portion of the price.  We wish this would be done on all tobacco products in the marketplace!  Following is what we asked our distributors to do with our new prices if they could.

“We ask that our distributors consider applying your mark ups on the cigar portion only of the new prices and pass the excise tax straight through to the retailers and encourage them to do the same for the individual cigar consumers.  If sales drop off too much on our cigars, then our company will be forced to close our doors.”

However, realistically, some if not many will just consider the excise tax portion of the price as total cost and mark up their total cost.  Thus the marketplace will probably see increases of more than just the new additional excise tax on cigars.
How our customers respond to this increase will determine whether or not National Cigar Corporation can continue to stay in business manufacturing natural tobacco leaf wrapped cigars.  If sales drop off too much, then our company will be forced to close our doors.

Due to the small size of our company, if we should have to close our business, once our brands are taken off the market, they would not likely be picked up and manufactured by any other company.  We actually considered closing our doors immediately when this bill was signed into law, but we decided to give our cigar smokers the final say on whether or not they will continue smoking enough of our natural leaf wrapped cigars to allow us to continue manufacturing them.

Beginning Friday, March 6, our office and plant was closed on Fridays and we will only be open Monday through Thursday from 7am to 4pm (Eastern Standard Time).  This is due to the minimum loss of sales we anticipate with this increase for the United States Government.  Orders to go out Thursdays from our distributors must be received before noon on Wednesdays, otherwise they will not be shipped until the following Monday.  If you accidentally call us on a Friday, please do not try to leave an order on the answering phone.  We want to be on the other end of the line Monday through Thursday to take orders in a two-way conversation to avoid errors or misunderstandings.  Call back on Monday.

Thank you for smoking natural tobacco leaf wrapped cigars made by National Cigar Corporation and with kindest personal regards, we remain,

Very truly yours,
National Cigar Corporation

We are pleased to be able to disclose below how your United States Senators voted on the S-CHIP bill to soak tobacco consumers with this huge excise tax increase and allow tobacco consumers to finance this program all by themselves.  55 Democrat senators were joined by 9 Republican senators and 2 Independent senators to pass this legislation in the Senate by a vote of 66 Yeas (highlighted in red below) to only 32 Nays (highlighted in BOLD black print).  All the Nays were cast by 32 Republicans.  One Senator was not able to vote (Senator Kennedy of Massachusetts).

In the house of representatives, the final vote was 289 Yeas to 139 Nays, with 6 not voting.  249 Democrats were joined by 40 Republicans for 289 votes for soaking tobacco consumers alone with financing the S-CHIP legislation.  The 40 Republicans are in italics and underlined, as this is the only way we can tell them apart from the Democrats.  We tried using the color "YELLOW", but it only allowed their names to be nearly invisible.  Something that would be counter to what we are wanting to do here. 

Listed below are the 289 congressional representatives who voted against tobacco consumers: