Earlier this week the FDA issued a draft guidance to industry regarding what is permissible when providing “free samples” of premium cigars and other covered tobacco products. On August 8, 2016, the FDA’s deeming rule went into effect, extending to newly deemed products the “free sample” prohibitions in place for products such as cigarettes and roll your own (ryo) tobacco. In the Fall of 2016, IPCPR submitted a number of questions to the FDA, several of which were directed to the FDA’s free sampling ban. The new FDA guidance provides some clarification to industry on what will and won’t be considered a “free sample.”
So what’s new?
Transactions only – In short, the overarching theme to FDA’s new guidance is that for free sampling to occur in any form, it must be in conjunction with a monetary transaction. According to the FDA, the free sample ban works with age verification by the seller to help ensure that free samples are not used as a youth access point to smoking. The FDA provides several examples of situations that would not violate the free sample ban.
- Coupons and Discounts – Promotions such as 50% off or buy one get one free are permitted since they are redeemed as part of a tobacco product transaction subject to age and ID restrictions. Likewise, product coupons are permissible as long as the coupon is either redeemed at the time of original purchase or with a future tobacco product purchase since either transaction would require age and ID verification. Coupons that can be redeemed for a tobacco product without a transaction are prohibited.
- Rewards Program & Membership Clubs – Rewards programs (i.e. a free cigar on the 10th purchase) are allowed if the rewards redemption takes place at a time of sale of a tobacco product. Similarly, free samples and discounts as part of a membership club are allowed under this draft guidance, but any discount or free sample can only be provided at the time of another tobacco product transaction unless the retailer can verify that the person receiving the reward is the original purchaser.
- Contests, Lotteries and Games of Chance – Free samples resulting from winning a contest, lottery or game of chance are allowed, but again can only be redeemed at the time of sale of a tobacco product. For example, winning a free cigar coupon in a raffle is allowed, but only if the coupon is redeemable at the time of a future transaction that is subject to the age and ID restrictions.
B2B Exchanges – FDA makes an allowance for the distribution of a “limited quantity” of free samples from one business to another in order to sell or market a tobacco product. While the term “limited quantity” could be open to interpretation, this should allow for sampling to continue at business oriented events, such as from a distributor to a retailer, and at IPCPR’s trade show.
Importantly, the FDA will be accepting comments on this guidance for 60 days after it is published in the federal register. We have included links to the guidance document as well as regulations.gov for comments.
For any questions, please feel free to contact Daniel Trope, Director of Federal Government Affairs at IPCPR – Daniel@ipcpr.org or 202-849-6045