June 24, 2009

A Teachable Moment-Hav-a-Tampa cigars closing Tampa plant

This is a perfect illustration of why you cannot tax the pants off of an industry in order to pay for a pet project and expect it to stay in business.  And for my next prophecy, when they have killed big tobacco with SCHIP they will move to something else…like Fast Food and tax it. Hat tip to http://musingsofavastright-winger.blogspot.com/

Read the exceprt below, full story can be accessed from Link at bottom.

By MICHAEL SASSO | The Tampa Tribune

Published: June 23, 200

TAMPA - Tampa will lose part of its cigar heritage in August when Hav-A-Tampa shuts its factory near Seffner and lays off about 495 employees, closing a factory that has been operating since 1902.

The company announced the closing today.

…Altadis tried to keep the plant open by closing it for a week or two at a time and furloughing workers. Eventually, though, the company couldn't cope with a steep drop in consumer demand, brought on by the recession and a large new tax on tobacco products, McKenzie said.

Work that had been done in Tampa will now be performed in an Altadis plant in Puerto Rico, where it has extra manufacturing capacity, McKenzie said. The company is not closing its nearby distribution center off U.S. 301, where it employs about 150 people.

Several things conspired to hurt Altadis' sales, McKenzie said, including the recession and the growth of indoor smoking bans. The bans have especially hurt sales in cold-weather states, where it's impractical to smoke a cigar outdoors in the winter, he said.

However, the company attributed much of its trouble to the State Children's Health Insurance Program, or SCHIP, a federal program that provides health insurance to low-income children. It is funded, in part, by a new federal tax on cigars and cigarettes. McKenzie couldn't say how much sales of Hav-A-Tampa cigars had fallen off, but the numbers have dropped significantly, he said.

Previously, federal excise taxes on cigars were limited to no more than a nickel, said Norman Sharp, president of the Cigar Association of America trade group. The tax increase, which took effect April 1, raises the maximum tax on cigars to about 40 cents, Sharp said.

Before the tax increase was passed, the cigar industry warned that consumption of cigars could fall as much as 30 percent in the year after its passage. It's not clear yet how big of an impact the law is having on sales, Sharp said.

Harrison said she understands the company's predicament and that Altadis has tried to treat its employees fairly, including guaranteeing employees two months of pay. Like her employer, she put part of the blame on the SCHIP tax hike.

"We can't afford to make these cigars in the U.S. anymore," she said.

With the company now set to stop producing in Tampa, the last major cigar maker left in the Bay area will be J.C. Newman, which owns premium brands including Cuesta-Rey, Diamond Crown and La Unica. While those premium brands are made outside the United States, Newman still makes as many as 40,000 cigars a day in Tampa under its less-expensive brands, Rigoletto Black Jack, Factory No. 59 and Mexican Segundos, said company co-owner Bobby Newman.

When J.C. Newman moved to Tampa from Cleveland in 1954, there were 10 large cigar factories in the city.

"It's a sad day," Newman said. "We are the last ones left out of those."

Hav-a-Tampa cigars closing Tampa plant

It is a sad day.  It is a sad day when people could not see that this was going to be the result of exessive taxation. It is what happens every time that oppressive taxation occurs.  But it is a teachable moment, because this lesson can be applied to every single one of Chairman Zero’s and Ninny Pelosi’s programs and policies.  We are going to be taxed, regulated, oversighted, and indebted out of the prosperity and liberty that our forefathers fought and died for.

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