Lane: Welcome to Cigar Cafe Radio. Today we have a special guest. Dave Garofalo owner Two Guys Smoke Shop, The Cigar Authority podcast and website and United Cigar. He serves on the Davidoff Advisory Board and many other boards now and in the past.
Harris: Dave, Thanks for joining us today. Dave is a personal friend. I really appreciate all you do for the cigar industry to protect it and make it better! You are the king of the cigar industry.
Dave: Thanks! I really love the cigar industry. I work seven days a week at it and can’t get enough. I am very passionate about brick and mortar cigar retail. I’ve been at this for 30 years and really want to help the industry and retailers.
Lane: Dave, what is going on in the legislative realm of the cigar world right now?
Dave: It’s not going well. When I started in 1985 there were no cigar taxes. Now in most states it is lumped in with OTP (Other Tobacco Products). The Government doesn’t understand premium cigars and what we do so we get caught up in bad laws and taxes. There are not enough consumers or retailers fighting this.
FDA Cigar Regulations
Harris: Give us an update on the FDA cigar regulation of premium cigars
Dave: This is very scary. If you look at what other countries have done to premium cigars its not good. The Deeming regulations have been passed up the chain so now its a waiting game to see what they came up with. No one knows. Overall there is no new info out there yet. It could be really bad though. The worst case would be no sampling, no new brands, no trade show etc.
The new FDA rules could hit premium cigar manufacturers really hard. If the FDA cigar regulations picks a grandfather date it would kill all new manufacturers overnight who were not around before that date.
Massachussettes just passed a law banning premium cigar sampling and branded promotions. I’m so happy I left and moved to New Hampshire twenty years ago. I wish they would just leave us alone.
We have to get more people involved in the fight through groups like the CRA.
Sean: How big is the premium cigar industry?
Dave: Only 300 million premium cigars are sold per year. This is very small compared to machine made cigars.
Lane: What are you guys doing to protect yourselves on the state level?
Dave: A few years ago we were able to separate premium cigars from OTP. This prevents us from getting lumped into new OTP taxes. We also have a lobbyist at the state level.
Kids don’t want premium cigars.
The FDA cigar regulations have presented two options. One option would define premium cigars as any priced over $10. This is the first time the FDA has attached a price to define premium cigars. Not knowing is the worst part about it. Something is going to happen. I don’t sugarcoat it. I try to tell it like it is. Life in the cigar business is a gamble.
Harris: Dave, Tell us a little bit about your podcast and site The Cigar Authority
Dave: I started it a few years ago. I was behind on social media. I believe you need to be the authority on whatever field you are in. I want to give info to people through videos, podcast etc.We started first on radio with seven stations broadcasting the show. Then we moved it over to podcasts and videos. I’ve been doing it for five years and love it. The show lasts for two hours live every week in my shop.
Harris: What is United Cigar? Lane and I are smoking the United Cigar Toro today on the show.
Dave: This is a group I started to unite cigar retailers and help make them stronger. Fight together. The United Cigar toro is a Dominican cigar in the $6-$7 range also available in a maduro wrapper. Be competitive and United. It has been going for 3-4 years and included 50 retailers around the country. Each retailer carries the cigar brands to support the group and keep it going. We need more retailers! I will help them make their stores the best.
Sean: Have you tried the Leaf by Oscar cigars?
Dave: Yes they are great and have a great story.
Lane: What are some other issues facing the cigar industry?
Dave: Customer Service is a big one. Most shops are not doing a good job with this. Look at other industries. You can sell 27% more just by asking. Most retailers need more cigar education.
Look at the video industry of the 1980’s. In one year Blockbuster wiped out the entire industry by doing a much better job than the independent retailers.
Lane: Dave, What are you smoking today?
Dave: I am smoking a cigar for a blind taste test. I do this every month for a magazine.
Sean: What are some new cigars you like?
Dave: AVO Syncro is a nicaraguan box press cigar made in the Dominican Republic. This one is a home run. Recluse Habano Amadeus, Perdomo Craft Series Stout is fabulous. Hammer and Sickle trademark maduro. The Camacho Barrel Aged is the best Camacho ever.
On a side note I launched the original Camacho brand in my stores. I had it exclusively for a year.
Davidoff is doing it right. They are doing different things and supporting retailers.
Harris: Dave what else is going on in your world?
Dave: We just celebrated our 30th anniversary. We gave away $30k and a Mercedes at our event with over 500 people. These promos are to give back to customers and have fun.
Everyone should go a cigar factory tour. The process is amazing. I try to go a few times per year.