So, Honestly, When Is "Soon"?

rmbittner · Feb 27, 2013

Every time someone posts about stocking up on tobacco, there are encouraging replies about how important that is because prices will be skyrocketing "soon."
So, curious, I searched the forums. These skyrocketing prices have been coming "soon" for the last three years.
Don't get me wrong: I don't have a clue if/when any such increases will occur. It could be tomorrow. But the alarm has been sounding for at least three years now. I can't help wondering: When, exactly, is "soon"? And if no one really knows, why do we persist in saying it?
Bob

eibhir · Feb 27, 2013

I know that in AZ cig prices were raised by $.60 a pack in early Febuary. I think it's happening in small amounts over time so that we don't panic and riot.

numbersix · Feb 27, 2013

We can feel it in our bones! 8O
Cigrmaster made a good post about this recently, but here and there laws are changing that keep restricting sales. If they tax online sales or prohibit online sales, it's going to get ugly fast. As it is, many states already make it very costly - so the handwriting is on the wall.
If they make an announcement about some major change coming in a couple of months, every tobacco shop will be sold out in days - like a supermarket before a blizzard.
I have close to a years worth of stock right now - not a lot, but something. I personally am not in a panic about it, but it only makes sense to get while the gettin' is good.

foggymountain · Feb 27, 2013

Nobody knows when "soon" is, but if the $10 cans of tobacco are not costing $25 within the next several years, a lot of us will be very surprised.

rmbittner · Feb 27, 2013

the next several years

Maybe we need to take "soon" with some salt, then. Because if it's even three years down the road, then it will have been at least six years since folks here began sounding the alarm.
I'm not saying it won't happen. Because I don't know. But I don't think anyone else knows either. And there seems to be a tendency to panic without any real evidence that skyrocketing prices are imminent and not just possible or likely.

gray4lines · Feb 27, 2013

A big hike already happened in 2008 did it not? There has been talk of internet sale tax for a little while, but A big push has come as of late (2012). Even Amazon is onboard, so I bet an internet tax will come within 2 years. Also, the FDA just recruited a new anti-smoking zealot to head their tobacco "program." I am not sure what effect that will have, but I imagine there will be more pushing for more regs and more taxes.
Timeline aside, I'll take "pascale's wager" I'd rather stock up and be wrong about price increases, than not have any extra stored and be right.
I don't see a downside to buying a bulk and sitting on it.
And I do not see any panic. There are not "runs" on tobacco stores (not talking about htf blends) nor is there a rampant "black market" for tobacco or widespread scalping, (again, htf's do sell in 2ndary market). I think those who take a step back and look what has happened, and see where it will go, are simply making decisions about buying.

zonomo · Feb 27, 2013

I think and feel we're living in a climate when a lot of things & freedoms are under assault. The best case scenario is that we've had a good reason to stock up and help the pipe industry. The worst case scenario is that this comes to fruition, and that's bad for everyone and everything. I can tell you that I saw the run on ammo and guns coming and I didn't stock up like I had intended. I have not made the same mistake with tobacco.

rmbittner · Feb 27, 2013

I saw the run on ammo and guns coming

This comment frightens me more than any tobacco price increase ever could.

tennsmoker · Feb 27, 2013

I'm not sure I can add anything to this that will shed any light. But in 2003 I wrote a story from CORPS that was scary at the time and continues to drive my desire to add as much tobacco to my meager cellar as possible.
I have posted that story here: http://pipesmagazine.com/smokehouse/pipe-smoking/taking-the-handle-off-the-pump/
Please forgive the messy layout. I am not a techie and could not get the blog straightened out. But, if you get through the old blog report, you will get a better idea of how "soon" is soon.
And there is always this lesson I learned a long time ago covering city hall: "Remember the Golden Rule. He who has the gold makes the rule."

numbersix · Feb 27, 2013

A big hike already happened in 2008 did it not? There has been talk of internet sale tax for a little while, but A big push has come as of late (2012). Even Amazon is onboard, so I bet an internet tax will come within 2 years. Also, the FDA just recruited a new anti-smoking zealot to head their tobacco "program." I am not sure what effect that will have, but I imagine there will be more pushing for more regs and more taxes.

Very good points all around.

And there seems to be a tendency to panic without any real evidence that skyrocketing prices are imminent and not just possible or likely.

It does seem that way at times, but the evidence is there actually. I don't plan on stocking up 10 or 20 years worth (though I don't really blame anyone who can afford to).
Still, I think many of us can see big changes in tobacco laws and taxes on the horizon, so it's not so much a panic as prudent planning.

rmbittner · Feb 27, 2013

so it's not so much a panic as prudent planning.

And this makes sense to me, even if we see tobacco prices fall in the years to come. If nothing else, we'll all end up with a supply of well-aged blends. That, in itself, seems reason enough.

numbersix · Feb 27, 2013

@tennsmoker thanks for that article - well done!

leonardw · Feb 27, 2013

From a state standpoint, the answer will differ from state to state. Multiple states have proposed increases in 2013. From a federal standpoint, no one knows. What we do know is this: Two bills have been introduced this year to raise pipe tobacco federal excise taxes (http://www.tobaccolawblog.com/2013/02/federal-bills-would-subtantially-increase-tobacco-taxes-and-allow-new-taxes-on-electronic-cigarettes/

). A similar bill was introduced last may.
The other point to keep in mind is that the FDA "is also moving forward to expand its statutory product jurisdiction by regulating “other tobacco products” including cigars, e-cigarettes, pipe tobacco, and dissolvables." (http://connect.raps.org/raps/blogsmain/blogviewer?BlogKey=7f102f5b-c488-4174-aa39-f9526c277215&ssopc=1). There is a possibility and even probability that this will happen in 2013.
When cigarettes came under FDA scope in 2009, taxes were raised simultaneously.

gray4lines · Feb 27, 2013

That, in itself, seems reason enough.

YUP!
I am more concerned now with just having tobacco that I like. Saving money by purchasing while it is cheap is a bonus.
You mention falling prices... While I wouldn't expect it, it doesn't hurt to be ready for both! Have a little money saved up to buy up some deals!
Looking at tobacco prices (tobacco products other than cigarettes) from 1997 to 2003. In only 41 out of 180 months, the index declined from one month to the next. The annual average has increased every year, notably from 2008-2009, prices increased 17.7%!
There has been an average price increase in tobacco products (not cigarettes) of 5.6% per year (trimming the highest and lowest % change yields a 5.3% average). The Fed's goal for inflation is 2% so that is a "real" increase of about 3.6%. That is not a small change. Real growth in wages is about 1% per year. In disposable income terms, we have much less to spend on tobacco now than anytime back to 1997.
Source: Bureau of Labor Statistics U.S. city average, tobacco products other than cigarettes

peckinpahhombre · Feb 27, 2013

See this week's Ask Greg Pease. He says if the FDA starts regulating pipe tobacco, things will get ugly real fast. Most of the small artisan blends will find it very difficult to comply with the FDA's product testing and may be forced to shutter (or at least drastically reduce the number of blends).

javajunkie · Feb 27, 2013

the problem (as i see it) is that the RYO cigarette market is using lower taxation rates on pipe tobacco to skirt cigarette and RYO federal taxation, putting out "pipe tobacco" which is just ciggie tobacco with a slightly differing cut and weight. the fed wants to close this loop hole REALLY badly, and will probably apply draconian taxation to either all pipe tobacco, or all non-cigarette tobacco (OTP, or other tobacco products) to do it. remember, the SCHIP dropped around eight dollars a carton on cigarettes when it was passed, on top of preexisting federal and local taxation. and hit pipe. and hit premium and machine made cigars.
not to fear-monger, but it does seem likely from my end.

puffy · Feb 27, 2013

Out go vs income.I started smoking pipe tobacco 40 years ago.For the first 20 years prices were pretty stable.They went up very slowly.My wages were going up so I paid no attention to the small increases.In the last 20 years prices have gone up much faster especially in the last ten years.In some cases prices have doubled in that 10 years.Now that I live on a fixed income I'm finding it harder to buy some of the blends that I used to enjoy...Soon to me is already here.

zonomo · Feb 27, 2013

This comment frightens me more than any tobacco price increase ever could.

What frightens you about this comment?

piperl12 · Feb 27, 2013

Soon is now! In 1990 a 50g pouch of Amphora Regular Pipe Tobacco was $5.00 today that same pouch here in Ontario Canada is $22.50 that's nearly a 5x increase in the price of the same tobacco in 20 years. Now add to that, that the anti smoking lobby was no where near as powerfull as they are now. The government of the day was less interested than today you have the potential of staggering increases over the next 20 year period. Most states are still buying tobacco for our pre- 2001 prices but change is coming to you as well. I suspect it will not take 20 years for you to see your 5x increase in price given supply and demand issues and government interference. Myself I am buying as much as I can legally buy as many times as I can afford. Add to that the blending houses upping the prices due to suppply and demand or perceived padding of profits. I can still buy tobacco state side for a 1/4 of the price for the same amount here. Make no mistake it's coming. The question on my mind is when they make it illegal all together. My neighbour got stopped by the police last summer for smoking a cigar in his car with a baby on board sign in the window. No baby just the sticker. The cop lectured him for 10min before letting him go. Just wait another ten years. We will the be the underground "pot" smokers.

sparroa · Feb 27, 2013

rmbittner,
"Soon" is very soon - there just isn't a date set in stone yet.
It is hard for most of us hobbyists to keep track of legislation progress, but Leonard is in the industry and he has outlined the bills that we have been crowing about for some time.
Previous bills that made us nervous were defeated, but I think that these changes are inevitable.
Pease also makes a great point about the proposed FDA controls over pipe tobacco.
This isn't just about tax increases, though that is a huge part of it - it is about the elimination of etailers and small blending houses and more specifically blends that do not conform to their regulations on flavouring or testing standards...
Not only is the government starved for funds, but many politicians are zealously anti-tobacco and they will not be content until the last plant is torn out of the earth...
I have noticed that you are very skeptical, but I personally think that by 2015 there will be a radically different reality when it comes to tobacco.

So, Honestly, When Is "Soon"?

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