The tobacco taboo - Part 3

[Clint911]

Just thought I would update you guys since its been a fair few months since I visited this forum and posted as I have been working on my cigar business......

Firstly I have been in a legal mine field with obstacles at every turn whether it be financial or the legal requirements of the tobacco industry - its almost as if the government don't want another tobacco company to exist. Also as I am based in NI, I not only have to follow UK laws but also EU track and trace laws too so its been a bit of a hassle with having to make many changes to my idea and a few tantrums by myself.

But today I have the first batch of my own blend of cigars, age in a Whiskey barrel, in my humidor and will be ready to smoke in 4 weeks and boy do they smell amazing.

My plans for hand rolling the cigars myself were shot down because that makes me a tobacco factory and the rules around that alone are crazy and would cost me a clean fortune just to set it up. So I went the cheap way.

I spoke to a cigar factory in Nicaragua, they created a blend that I wanted and produced a small batch of 500 cigars. Import duty was paid (That was a disgusting invoice to see and worse to pay) and then I aged them in my own Whiskey cask.

All the legal issues have been sorted and I am set up to sell to retailers and the public. I now have 4 weeks to finish my branding and website and a small holiday to relax and recalibrate before I go out and try and sell my cigars - another hurdle with the strict advertising laws...

I should have just started a drop shipping business or something, a lot less stress.

 

[fisicx]

Can you even advertise cigars?

 

[Clint911]

Can you even advertise cigars?

Nope but I can advertise the process I use or company not the actual cigar

 

[Paul Kelly ICHYB]

Whats the damage for how many?

Did you use the Titanic whiskey?

 

[Ozzy]

Thank you for stopping back and giving us the update,.
I'm not your target market, but still, I find it interesting to see the hurdles you came up against, but you still persisted and wish you the very best for teh next steps and you ultimate 'launch'

 

[JEREMY HAWKE]

I'm not into this but proper Gentlemen are and you should do OK
As far advertising I dont know about that but you can optimize your site and get traffic to your online shop legally from what I can see

 

[Clint911]

Whats the damage for how many?

Did you use the Titanic whiskey?

Didn't go with the Titanic Whiskey because the factory couldn't match the blend of tobacco I made at home exactly. The blend they created didn't taste the same using the titanic whiskey but I used a different Irish whiskey instead which makes the cigars special (my opinion).

Pricing is TBC, need to speak to a few retailers and check what mark ups they expect but I think the RRP will be between £15-£25 per cigar. We only have the 1 size so far so price can change depending on size.

 

[Clint911]

Thank you for stopping back and giving us the update,.
I'm not your target market, but still, I find it interesting to see the hurdles you came up against, but you still persisted and wish you the very best for teh next steps and you ultimate 'launch'

I think I nearly gave up about 10 times in the past few months - still have a lot of self doubt about whether it will sell or not but im too invested in it now so I'll do what I need to make it work.

 

[JEREMY HAWKE]

Thank you for stopping back and giving us the update,.
I'm not your target market, but still, I find it interesting to see the hurdles you came up against, but you still persisted and wish you the very best for teh next steps and you ultimate 'launch'

Yes I will second that because one of the things about being a long time member on here is the different type of business that you meet here . We are always learning !

 

[Clint911]

Good old HMRC have now changed their minds and decided that my ageing process actually makes me a tobacco manufacturer and therefore i need a tobacco factory license - virtually impossible to obtain without some very deep pockets…

well, there goes that dream…

 

[Paul Kelly ICHYB]

Surely you are processing, not manufacturing?

You receive manufactured goods, paying duty, and then process them?

 

[Clint911]

Surely you are processing, not manufacturing?

You receive manufactured goods, paying duty, and then process them?

Yes that’s what I believed and was initially told however because I remove them from the imported boxes so I can age them and then put them in our branded boxes that’s classed as manufacturing.

Even tho the cigar is made and all the track and trace numbers aren’t affected.

It’s been a fun afternoon!

 

[Paul Kelly ICHYB]

I have just read the guidance and I do not think it is vague or ambiguous!

TOBPMMLS1050 - Scope of this guidance​

This guidance covers the roles and responsibilities that anybody carrying out regulated tobacco activities in the UK are licensed to do so under the scheme.
From 1 August 2018 all businesses and individuals are prohibited from performing a regulated activity involving tobacco products manufacturing machinery in the United Kingdom unless they are granted a licence to do so by HMRC. The scheme has been introduced to

• reduce the risk of Excise Duty evasion
• prevent illegal manufacturing of tobacco products
• to control the sale and use of tobacco products manufacturing machinery

This guidance should be read in conjunction with Excise Notice 2004

On import, you will be paying duty (or processing in a bonded warehouse?) and will not be doing any of the above!

 

[MikeJ]

I guess the answer is to get the processing done outside the UK. I don't know if the Isle Of Man is any easier for instance? Maybe get them done at source, in Nicaragua. You'd lose the "made in the UK" side of things, but it's much cheaper.

I'm certainly not suggesting you sell the ones you have as made in Nicaragua. No sir, that would be wrong.