October 25, 2014

Dosal Tobacco Feels Pack of Trouble

Adding to Florida's cigarette tax is one thing, say Dosal Tobacco executives. But they think it's unfair to slap a fee on their products by retroactively including the company in a legal settlement in which it had no part.

Amy Keller | 3/1/2009
As Margarita and Martin Dosal and their two young children vacationed in Lake Placid, N.Y., in December 1958, the five-year civil war in their home country of Cuba was nearing its end. By the end of the month, life for the Dosals, a wealthy family with a successful cigarette manufacturing business, had changed forever. Fidel Castro’s rebel army toppled Fulgencio Batista’s regime, and the Dosals became political exiles — their land, factory and personal possessions confiscated by the new communist government.

Margarita Dosal
Margarita Dosal and her late husband resurrected the family’s Cuba tobacco business in Miami after Castro took over. Today, Dosal Tobacco employs 130. [Photo: Eileen Escarda]

“I was very spoiled when I was in Havana. The family was so well off. I never expected to be without a penny when I came over here. Castro took care of it all — all my pennies and everyone else’s,” recalls Margarita Dosal.

The Dosals settled in Miami, where they began rebuilding their lives and their tobacco business. With a small sum from Martin Dosal’s father, they purchased some old machinery and rented space in a garage-sized building in an industrial section of Hialeah.

In 1962, working in partnership with the manufacturers of other leading brands from Cuba who had also fled to the U.S., the Dosal Tobacco Corp. launched its line of Competidora cigarettes along with other contracted Cuban brands. “The company started growing little by little, and little by little we all did some work. The whole family worked in that factory,” says Margarita Dosal.

The Dosal family eventually became the sole proprietor of the operation, which didn’t make much of a dent in the market competing against big American tobacco companies. As recently as the 1990s, Dosal’s obscure brand of smokes garnered only about 1% of Florida’s cigarette market.

In 1997, however, came a turning point — the $11.3-billion settlement of a 1995 lawsuit in which the state sued a number of tobacco manufacturers over the way they marketed their products. The state aimed to recoup money it has to spend caring for those with tobacco-related illnesses.

The settlement required the four manufacturers to pay an approximate 45-cent assessment on each pack of cigarettes, on top of existing state and federal excise taxes on cigarette purchases. Consumers also pay a state sales tax on cigarettes that’s collected by retailers.

Dosal wasn’t part of the settlement, however. A judge dismissed the company from the lawsuit, ruling that there was not enough evidence to show that the company had engaged in deceptive marketing practices or violations of racketeering laws.

Tags: Politics & Law, Government/Politics & Law, Healthcare

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