Cuban Cigar Knock-Off Manufacturers Face Prison Terms

by Tom Johansmeyer (RSS feed)
Mar 18th 2009 at 2:02PM

Illegal cigar factories, called "chinchals," have been among the few alternatives for Cubans looking for work in the midst of this global economic crisis. Risking time in prison, employees roll counterfeit Havana cigars in order to make a living. The risk may be worth the return, but it's hard to say.

One roller refused to reveal the extent of his pay raise when moving from state factories to the black market ... but "raise" was implied. Working in the legit world, this employee earned $17 a month. Counterfeit cigars tend to sell for $30 to $40 per box of 25, a price that's up to five times lower than the official price set by the Cuban government.

The price competition is only one reason for the government's distaste for the counterfeit cigar business, but it's a powerful one. Cuba's official cigar company, Habanos S.A., saw a 3 percent drop in sales last year. The government also cites the need to protect the image of the brand and fight corruption on the island. Authorities confiscate 1,500 to 1,700 boxes of illegally manufactured cigars every month.

It could be a losing fight, however. Barriers to entry are low, as supplies are easy to secure. And, desperation plays a role. When you need to put food on the table, risks become more realistic.

Tags: cigar, cigars, counterfeit, cuba, cuban, cuban cigar, cuban cigars, CubanCigar, CubanCigars, fake, fakes, havana, tobacco, tobacco industry, TobaccoIndustry