The Tobacco Haven Case

Well, this is not news, and yet News. In 2009 a tobacco shop from New Hampshire USA called Tobacco Haven made prosumption an essential part of their business plan. They set up a micro production line which let their customers obtain cigarettes by estimated half price of those offered by tobacco companies just by contributing a little production to the consumption path. The customers chose a blend, shove into a cigarette-rolling machine and in about 8 minutes they enjoyed some freshly made cigarettes by a real bargain price. Great idea, because it’s a unique set of added value: not only you get a-price-to-reckon-with but you offer the customers a unique experience of being closer to The Old Days with all the nostalgia towards the ways of their fathers.

Hold on tight, because this one is getting better.How do you think – why this doesn’t please the state authorities? Here’s why – by doing so Tobacco Haven should be regarded as a cigarette manufacturer and therefore it should contribute taxes from production and distribution of a certain product! Needless to say that T.H. didn’t get along with such allegations. Take a look of two different opinions from the sides:

“The state of New Hampshire is essentially saying that the retailer is making cigarettes and then selling the cigarettes that it’s making, (…) That’s clearly not happening at the store.” – Jeffery Burd, attorney of Tobacco Haven

“The difference is in the commercial nature of this transaction, (…) What we have here is a business, which is selling all the raw materials, and then making the facilities the manufacturer available for a price to the consumer.” – David Rienzo, New Hampshire’s assistant attorney general


We may argue on the point which side is right here. Also on many levels: who gives a better interpretation of the law and who is speaking the words of fairness. Either way, to my knowledge it’s a case without a precedent, and hence the outcome of legal aspect of the situation.

This case made me wonder about several things:

  • How many hurdles for prosumption to spread hold the structure of our current laws?
  • What kind of change will it take to update these laws?
  • How much lobbing of “non-prosumeric” companies (i.e. not basing on prosumption) will be involved in changing these laws or what will be the breaking point when these companies just start evolving into prosumeric types?
  • Will there be a prosumption tax? (sic.)

Let me sum up by quoting a good point by PJ Rey:

“The ruling on this issue, however, has broader implications than the price of cigarettes in Brookline.  Essentially, the courts are going to rule whether or not the labor a consumer performs to obtain a commodity for personal use is taxable as if it were manufacturing activity.  If we start down this path, what’s next?  Pumping one’s own gas?  Filling one’s own fountain drinks?  Assembling Ikea furniture?  Updating a Facebook profile? Hard to tell where to draw the line, but one thing is clear: prosumption will be a significant issue for the courts of the 21st Century”


A-men, PJ.


2 thoughts on “The Tobacco Haven Case

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