Recorded 6-16

Lane: Welcome everyone to The Cigar Cafe today we have a very special guest! Bobby Newman Executive VP from JC Newmann cigars is in studio today. What brings you to Birmingham?

Bobby Newman: Thank you guys for having me today. I am in town to welcome our newest Diamond Crown Cigar Lounge to our family of cigar lounges. Vitola Fine Cigars owned by the Saunders family in Mountain Brook Alabama. We are hosting a big event tonight in the store. It will be great.

Harris: Bobby is a great friend to us. We really appreciate you joining us on the show today.

Lane: Bobby can you tell us a little bit about your Diamond Crown Cigar Lounge program?

Bobby Newman: Definitely. We have a network of over 50 cigar lounges around the US branded with Diamond Crown cigars. We send nice artwork for the lounge, supply cigar and shopping bags, matches and other items to support the lounge. The retailers carry the full line of Diamond Crown cigars and accessories. We also do a big event each year at each lounge to feature the Diamond Crown cigars. Our office has a dedicated marketing team to support our Diamond Crown Cigar Lounge retailers. It is a great program. I believe very strongly it is the best cigar lounge program in the country. We support our retailers better than any other company. It is a partnership.

We also make a special cigar only available to our cigar lounges, the Diamond Crown Julius Caesar 1895 perfecto

JC Newman Cigar Co. History

Bobby Newman: In May of 1985 there were 42,000 cigar factories in the US when we started. JC Newman is America’s oldest operational cigar factory. Abe Lincoln was the first to tax cigars in 1865.

Today we are smoking something special. There are only 23 of these cigars available in the US right now. It is our newest release not out yet The Diamond Crown Black Diamond made in the Arturo Fuente factory. We also distribute all Fuente cigars in the US.

Diamond Crown was blended to be the best of the best when it was launched in 1996. It was a 54 ring gauge which at the time was the largest being gauge available. It is rolled like a straw which gives it a great draw. Diamond Crown was launched in 1996 at the Grand Havana Room in Beverly Hills. The Arturo Fuentes Opus X cigar was also launched in 1996 on the East coast. Diamond Crown received a 94 rating from Cigar Aficionado.

In 2001 we realized consumers cigar tastes were changing. We launched the Diamond Crown Maximus cigar line. The tobacco is from the top of the plant and aged five years. The wrapper is Ecuadorian Sun Grown.

I am the third generation working in the business and my brother Eric’s son is the 4th generation currently working as an attorney fighting the FDA.

The Diamond Crown Julius Caeser line was my brother nephew Eric’s idea. It received a 96 rating from Cigar Aficionado and is currently exported to 40 countries. We are only able to make 100,000 cigars in this blend a year because of the tobacco we use. This blend was launched at Intertabac in Dortmund, Germany.

Diamond Crown Black Diamond

The Diamond Crown Black Diamond is the 4th line released under the Diamond Crown name. It has a havana seed connecticut broadleaf maduro wrapper. I compare it to German Beer. This cigar is launching at the IPCPR this year and will only be available to our lounges for the first six months.

Lane: Sean I think you will like this one!

Sean: Bobby you are very involved with the fight with the FDA. Can you give us an update?

FDA Update

Bobby Newman: It’s a three prong attack on the FDA from the IPCPR, CAA and CRA.

1st Prong

We are trying hard to get Congress to pass a bill to exempt premium cigars from the FDA. This has been a five year process. We now have language in the Ag appropriations bill winding its way through Congress. Hopefully that makes it all the way.

The FDA released 449 pages of regulations that brought up more questions than it answered.

2nd Prong

Litigation – filing a lawsuit to try to prevent or slow it down (UPDATE: since this interview a lawsuit has been filed asking for injunctive relief)

3rd Prong

Work with the FDA. This one is tough they are not easy to work with.

Congress’ intention was to limit youth access. I met with the FDA in our factory. They know the difference between machine made and premium cigars. No cigar sampling after August 8th.

Flavors – Acid, etc. Regulation is coming the FDA has said. FDA wants to limit flavors because they feel they appeal to kids.

Sean: August 8th what happens before then?

Lane: How does the gun stuff impact this?

Bobby Newman: Unintended consequences if there is a filibuster. Congress has 221 cosponsors a majority. If we fail in litigation or with Congress we will survive but it will be hard.

Lane: Will regional cigar brands get acquired?

Bobby Newman: Any brand after Feb. 2007 three years from now must be removed from the shelf if nothing changes. This is very hard on new blends. There are very smart people working on this. All of the cigar industry is marching together.

Lane: If you were a betting man Bobby what are the odds this gets changed?

Bobby: My gut says we will end up with light regulation maybe under a new administration. The irony is that we have been waiting for the Cuban embargo to be lifted but if that happened today Cuban cigars would be illegal.  The FDA estimates it will take 5000 man hours to complete each application at a cost of $300,000- 1 million per blend. Cuban cigars have 500+ sky’s.

The Cuban embargo can only be lifted by Congress.

Lane: Does the FDA want to kill it?

Bobby Newman: You can’t legislate morality i.e. prohibition didn’t work with alcohol. The irony is that you can purchase marijuana legally in many states now where they are trying to kill cigar smoking. It doesn’t make any sense. 24 states now have legalized medical marijuana anyone can get access. 8 years ago there were over 800 dispensaries in California alone.

Sean: I know. I closed my plumbing business because of all of the regulations in Illinois.

Bobby Newman: 100,000 ft. view. We have an office in London. The EU is passing tons of new regulations. The unemployment of people 18-55 there is 55% and you can’t fire anyone. Germany has kept the EU afloat.

Brickhouse Cigars

Sean: Tell us about your brand Brick House Cigars

Bobby Newman: In 1895 it was our first cigar brand and was on the market until 1937. Originally it had a Cuban wrapper.

We make 65,000 cigars a day in our Tampa, Florida cigar factory and 80,000 per day in our Nicaraguan cigar factory. We are second in size in Nicaragua only to Drew Estate.

The Brick House Mighty Mite Maduro has a Brazilian wrapper. It takes a full year or the wrapper to turn the dark color. We are releasing it in a toro size for the first time at the IPCPR this year.

Bobby Newman: My dad died at 92. He used to say people’s mouths must be getting bigger 5×42 was the best selling cigar size when he started.

Bobby Newman other favorite cigars

Lane: What other cigars do you love?

Bobby Newman: The Julius Caesar toro is the cigar I would take to a desert island. I like the Arturo Fuente Hemingway line in any size, Fuente Magnum R, Casa Cuba also

Taste ages get stronger like with craft beer. In the morning I love a Diamond Crown cigar and after a big meal a heavier cigar.

Meg Ryan hall pass

Carlito Fuente quote from Bobby’s first cigar dinner in 1988 when asked what his favorite cigar was

“How can you choose from among your children?”

Sean: My dad is a huge Montesino fan for the last 25 years. Do you think we will see a rebrand?

Bobby Newman: The FDA has said all new brands and updates must be done by August 8th or submit to the review process. Most of the big companies are launching lots of new brands 50+ each.

This process usually takes years. My grandfather registered 100+ brands. You lose them if you don’t use them for 5 years unfortunately.

There will be 1000+ new brands and blends to hit the market at the IPCPR this year. The FDA doesn’t know what all of these regulations mean. Its a Cluster **** at best.

JC Newman Cigar Company

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