For much of the twentieth century, cigar makers had to compete with cigarette companies for a steadily-dwindling proportion of smokers' buck.
With the late-nineteenth-century invention of cigarette-rolling machines--which decreased the cost of cigarette production and allowed cigarette makers to offer cheaper prices--a long, and for cigar makers draining, competition between the two parallel industries began. Cigarettes were cheap, portable, shareable, even wearable (as in all those 1950s B-movie classics in which the delinquent hero rolls his pack up in his sleeve)--how could big, stodgy stogies compete?
Not until the 1990s did the situation change. During that decade, the big cigarette companies faced an ongoing PR nightmare in the courts, and cigars' bulkiness, time-consuming nature, and association with luxury became features rather than bugs. The overburdened, health-conscious American worker was searching for an occasional, relaxing indulgence, and cigars provided that. Their widespread adoption by trend-hoppers and Gen X-ers helped save the cigar industry and made cigars one of the few forms of tobacco use to see big numerical growth during the decade of Clinton.
Interestingly enough, one of the most recent smoking-related trends seems to bring these two old rivals together. Recent consumer data shows cigarillos--those little tiny cigars that get sold by the box--enjoying a jump in consumption, especially among a demographic all-important to cigar makers (as to so many other industries): young adults.
One major index of consumer practices recently showed a giant increase in small cigar use over the past decade. Measuring the period from 1997 to 2007, one study found that little-cigar use increased by almost two hundred and fifty percent, while cigarillos jumped by one hundred fifty percent.
Analysts pointed to several possible reasons for the change. Cigarillos have been promoted in some hip-hop videos (as have cigars in general), and they can be sold very cheaply by unit, unlike cigarettes. (You can't walk into a store and buy a single cigarette. On the other hand, you probably can bum a cigarillo without too much effort.) Some small cigars are offered in candy flavors, making them more appealing to non-smokers and occasional smokers. And much of the bad press attending smoking during the past few decades has focused on cigarettes, leaving cigars and small cigars less damaged in the public mind.
All that granted, what's probably helped the small cigar format the most is a legal curiosity that now, as of April 1, 2009, is set to expire. For most of their history, cigarillos and small cigars have been taxed at a much lower rate than have cigarettes. The new SCHIP-related tax increase will close that loophole, though, with cigarillos and regular-sized cigars alike experiencing a tax hike (from five cents per unit to forty cents per--an eight-times increase), and little cigars now facing a one-dollar-per-pack tax rate.
So, little-cigar lovers may want to stock up now, as the increase goes into effect on April 1. However, since the initial taxes seem to have been miniscule, even an eight-time increase may not end up taking that big a bite out of little-cigar smokers' pocketbooks. It's unclear what effect the new laws will ultimately have on small cigar and cigarillo consumption. After all, small cigars will still offer a more-portable, less time-consuming version of the big-cigar experience, and they offer taste advantages no cigarette can match. If the tax increase strips some marketplace advantage from the small cigar, it can't touch the reasons at the heart of its appeal. Those reasons are the same as apply to any cigar: taste, a chance to pause and reflect, high quality tobacco, and craftsmanship.
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