Cigar Smokers Gasp for Air as Tax Jumps

The fumes roiling inside the Politically Incorrect cigar shop Friday at the Westside Pavilion did not rise from the slow burn of a lit stogie. Instead they seethed from owner Greg Hill.

Between sales to customers, a furious Hill packed up his West Los Angeles shop as he prepared to leave California for Carson City, Nev., where he will merge his business with a friend’s store.

The tax hike on cigars that took effect Friday, and the thought of another one coming in July under Proposition 10, makes staying a losing proposition, he said.

At the Hi-Time Smoke Shack in Costa Mesa, owner Chuck Abarta contemplated his future prospects now that a $10 cigar will cost about $13.55. He predicts that serious cigar smokers will have their favorite brands shipped from other states to bypass the tax.

“There are a lot of very irate people,” Abarta said. “They feel it is very unfair.”

Anticipating the tax hike, customers raided their favorite smoke shops during the holiday season to stock up on cigars before Friday’s tax hike.

“People who usually bought one cigar, bought a box,” said Larry Wagner, owner of the Cigar Warehouse in Sherman Oaks. “People who usually bought a box bought five, six or seven boxes.”

Wagner has withstood tax increases during his 21 years in business. But this time, the unusually hefty hike is prompting customers to look for cigars elsewhere--and never before have there been so many ways to get out-of-state tobacco products. “I expect Internet sales to increase,” he said.

At Prissy’s High Society cigar shop in Stanton, store clerks were too busy Thursday afternoon even to talk.

Chris Moore, a salesperson at Alfred Dunhill at South Coast Plaza in Costa Mesa, said cigar sales increased substantially as smokers stocked up on their favorite brands.

“Yesterday I had a guy who bought a box of Don Diego cigars by Playboy for $550,” a Dunhill store clerk said. “He hadn’t planned to buy them yet, but we told him that one day later the price would go to $780.”

The previous tax on cigars was 26.17 cents on every dollar. But it went up an additional 35.48 cents tax on Friday, raising the tax ante on cigars to 61.52 cents for every dollar spent.

Proposition 10 raises prices on all tobacco products to collect $700 million annually for social services causes, especially for families with children under age 5. Funds also will go toward smoking cessation programs, immunizations and domestic violence prevention.

In 1996, when cigar chic peaked and models and movie stars smoked stogies on the covers of glossy magazines, Hill’s business grossed about $300,000. But attacks on smoking over the years have chipped away at his business. The smoking ban in bars and restaurants, for instance, wiped out a large part of his weekend business, he said, as men stopped dropping by for a cigar before heading out for the night.

Now he plans to leave California before profits from his Christmas sales are depleted by the new tax.

“I’m really mad,” Hill said. “I’m so mad at California right now because they killed my dream.”

Not all tobacconists share Hill’s outlook. Some are hoping that the tax can be successfully challenged in court.

Other stores, such as the Hi-Time and Alfred Dunhill, rely on the sales of other items to offset the vicissitudes of the cigar market.

“We’re a men’s luxury store that carries clothing, jewelry, writing instruments, watches and leather goods in addition to tobacco products,” the Alfred Dunhill store clerk said.

But cigar sales and smoking cannot be summed up by the economics of the bottom line. To aficionados, coiled in the aroma of a fine cigar is the joy of a newborn baby, the last night of bachelorhood or the hard-won promotion after years of toil on the job.

Indeed, many small shops belong to people with a strong personal enjoyment of cigar smoking. Sam Moghrabi started selling tobacco products two years ago to make a little money on a habit he savored.

Moghrabi also was in his shop, Sam’s Cigarette Store in Woodland Hills, on New Year’s Day raising prices $5 per carton.

“It’s going to kill the business,” he complained. “I think people won’t buy the cigarettes from these stores any more. They’ll get them from Nevada. If we survive it will be a very hard time.”

Moghrabi said he wasn’t even sure he would be able to remain open with such a high tax.

“I’d rather be with my family on New Year’s Day and not be in my store raising money for the state.”