CubanCigars

Cuban cigar sales are in the tank right now. A combination of economic woes and anti-smoking legislation around the world have put the squeeze on Habanos S.A., the company behind Cuban cigars. Sales fell 8 percent last year, the company said, to $360 million last year. This follows a sales decline in 2008. Even though the economy is showing signs of recovery, Cuban cigar haven't come back. So, the company is looking to move into some relatively uncharted territory: women.

To find its way into women's hands, Habanos has created a smaller and milder Romeo y Julieta (the women I know who smoke cigars, however, tend to prefer something more robust). Women comprise only a smal share of the market – between 5 percent and 10 percent according to Habanos marketing director Ana Lopez.

Though some love from the ladies may help, Habanos realizes that it won't change the world for the beleaguered Cuban cigar company, which expects only a modest performance in 2010, due in large part to soft economic conditions in Spain.

King's Crate, a new company based in Toronto, has launched a line of luxurious new gift crates created specifically for men of refined tastes. The collection is crowned by the Havana crate (above), which includes a stylish humidor, ashtray and cigar cutter, three Cuban cigars (Cohiba, Montecristo and Romeo y Julieta), your choice of Havana Club rum from Cuba, Courvoisier cognac or Johnnie Walker Black Label Scotch, Pastiglie Leone Italian candies in a nostalgic pinup girl tin, cashews and roasted peanuts, and a copy of Schott's Food & Drink Miscellany. The price ranges from $196 - $270 Canadian depending on which booze you choose. Of course, the Cuban cigars and rum are only available in Canada (which has no Cuban embargo) and alcohol is limited to customers in Ontario at the moment, but the company has other crates filled with gourmet goodies and stylish accessories which can be sent anywhere. Each gift arrangement comes packaged in a handcrafted, reusable cedar crate.

Cigar enthusiasts will find everything they could need at La Casa del Habano, Montreal's upscale smoking lounge. Located on la rue Sherbrooke Ouest, it is easily accessible from the city's downtown hotels and provides a relaxing destination for tourists who crave a Cohiba and business travelers who need to unwind following a marathon of meetings.

As the store's name implies, you'll only find Cuban cigars in its walk-in humidor. Be sure to see an attendant before trying to enter (the humidor, that is), as the door is kept locked. The employee will also help you with your selection, introducing you to the latest releases – which can be important, given their unavailability in the United States. As you peruse the shelves, prepare yourself for a bit of sticker-shock, as Canadian taxes do hike up the prices. But, for the cigar that will make the next hour magical, it's worth the sting.

Though you may want to pick up a few sticks for the road, make some time to smoke at least one in La Casa del Habano's large, comfortable cigar lounge. It seats close to 20, with large leather chairs and couches throughout the room and four seats at the full bar. The lounge offers coffee, espresso and a variety of cocktails, completing the experience you'd expect to have in the top shop in Montreal.

Cigar shops are a lot like any social environment. There are regulars and new guys, people new to the reason for gathering and seasoned veterans. In any situation like this, there are basic norms that should be respected in order to make the experience more enjoyable for you. I know I've covered this topic before, but the latest round of advice is new. Trust me, there's no shortage of breaches of etiquette in this world (just like the subway, the sidewalk and your local bar).

Some of these may seem obvious. They are. There's nothing in the list that should have to be said. Yet, life at the cigar shop has shown me that the simplest of courtesies tend to be overlooked.

Many thanks to the regulars at De La Concha in Manhattan for these tips. They've seen the worst of the worst and were only too happy to share their experiences. If you don't need these tips, forward them to someone who does: we all know somebody who could use a little bit of help.

Mexico's Cuban cigar distributor, Importadora y Exportadora de Puros y Tabacos (IEPT), has taken new steps to prevent the spread of counterfeit Cuban cigars. The company has put together a new certification system that will validate cigar retailers across the country as legitimate sellers.

IEPT is licensed by Habanos S.A., which is the global distributor of Cuban cigars. Habanos has been struggling with counterfeiting for years, with problems in tourist-infested parts of Mexico being particularly severe.

The new campaign is designed to support retailers that sell the real deal, which hopefully will resonate with cigar consumers.

But, let's be realistic. The problem that has to be solved first is the love of "smoking the label." When customers stop wanting people to see that Cohiba label, they'll begin to make better choices.

I'd heard about Corona Cigar Co. from several people before I took my trip down to Orlando, FL. A few weeks ago, a visitor to New York from Florida overheard me discussing my then upcoming trip and interjected with some great advice, "Check out Corona." There are three locations; I chose the spot in downtown Orlando (no, not the same thing as Downtown Disney).

The description I was given back home in New York was enough to get me interested, but it failed to capture the enormity of the experience. The South Orange Ave. location offers countless cigars from nearly every manufacturer you could imagine. I took advantage of the lower cigar tax relative to home to pick up an Avo Campanero at what felt like a discount and headed for the large in-store lounge. Sponsored by Diamond Crown, it seats more than 60 people without forcing them to bump elbows. There's also outside seating at both four-top tables and wooden rocking chairs.

Every table has a six-page cocktail menu, so there's a pretty good chance you'll find the right concoction to pair with your preferred cigar. Of course, the fact that the bartender is nothing short of stunning improves both the drink and the smoke.

Habanos S.A., the official worldwide distributor of Cuban cigars, has developed a new way to thwart the efforts of the knockoff business. The company's introduced a new security seal that apparently has other safety features ... all of which are designed to prevent you from smoking a "Cohibo" while wearing your Folex and carrying Burbarry.

Specifically, there are two new elements on the Republica de Cuba warranty seal. One is a holographic label, which you'll find to the right of every warranty. The other is a barcode that will be on the left of the warranty. The seal is designed to fall apart if removed, making it impossible to reuse it on a box of fakes. Also, the barcode corresponds to a customized identification number stored in a database. One scan will show brand, size and market destination.

In the words of our esteemed former leader, "mission accomplished," right? Well, this all assumes that counterfeiters won't be able to build a better mousetrap.

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.

The biggest problem with access to Cuba may not be production capacity, as many suspect. Trademark and copyright issues have the potential to be a greater problem, and there is no easy solution.

You've probably noticed that brands such as Partagas, Montecristo and Cohiba occupy your local tobacconist's humidor. A saunter through a duty free store at any airport outside the United States will put the same names under your nose. Of course, these cigars have nothing to do with each other. The latter are Cuban, the former are not and the companies have no relationships. Cohibas in the United States are not the "non-Cuban" or "legal" versions of a single company's product.

General Cigar Co. Inc., for example, sells Cohiba cigars in the United States. Cohiba is also a prominent Cuban brand. Unfortunately, Habanos S.A. never registered the name up here. Habanos sued General Cigar, and a nine-year battle followed. In 2006, the U.S. Supreme Court ruled against Habanos (shocking, right?), reasoning that the embargo barred a challenge to General Cigar's claim.

When the embargo is lifted, there will be more legal challenges, and several companies will have to change their names and labels – ultimately requiring the reconstruction of brand identities from scratch. Winning the brand battles will have profound consequences. For this reason, General Cigar has "invested" close to $3.5 million on lobbyists over the past 10 years.

As with all other Cuba-related speculation, there is no way to forecast where this issue will go in a post-embargo market. Even if we assume that the Cuban brands will lose their claims, the impact on the market would be nearly impossible to predict. What we do know, however, is that the transition will be far from easy.

Cuba, the Dominican Republic, Nicaragua: these are the countries you would normally associate with the cigar business. But, Greece? Believe it or not, a market for local cigars is growing in Greece, and it's defying the global economic downturn.

Domenico Cigars is a small, two-room factory in Greece that sources its seeds from Cuba. It only puts out 70,000 sticks last year (a record). Instead of positioning the cigars as rare or limited editions, the company offers them at a reasonable $5 each, which is about half the price of the imported hand-rolled Cubans.

The group received little help from Cuba. Though they were able to tour the factories and plantations, nobody offered tips. They weren't allowed to take notes. So, developing an operation in Greece led to plenty of trial and error, with the actual rolling being the hardest part.

Despite the fact that the seeds are Cuban, the cigars are distinctly Greek, thanks to the local soil and the effort that resulted in the current product. The locals, it seems, remain committed.

[AP Photo/Thanassis Stavrakis]

"It happens all the time."

Ron Melendi, General Manager of De La Concha in New York, is tired of seeing guests walk through the door of his tobacco shop and ask for "Cubans." It's no secret that cigars from that particular island are illegal, yet people ask anyway.

It pisses Melendi off, and I don't blame him.

Cuban cigars are seen as a rare treat in the small, tightly intertwined community of upscale smokers. Since they have been illegal in the United States for more than 40 years, the act of cutting and lighting one implies unusual access, connections that most simply do not have. But, that's about it. A general decline in Cuban cigar quality, especially over the past decade, leaves the label as the only coveted aspect of the experience.

Of course, it's easy to dismiss this popular notion among tobacco retailers and manufacturers as a case of "sour grapes." After all, they can't sell what everybody wants. Jealousy wouldn't be much of a stretch ... if the quality issues weren't so real.

Several trips in the past three years to France, Spain, Mexico, Sweden, Finland, Iceland and Canada have led to Cuban cigars between my fingers. I've seen different humidors in stores in each of these countries and been able to rule out problems resulting from poor storage. I've had a few decent smoking experiences, but they haven't been life-changing. Even when the cigars are properly maintained, the taste and construction simply have not delivered.

Why are sales of Cuban cigars down? The minute the subprime mortgage crisis turned global, of course, demand had no place to go but down. And, there's always the quality issue that has plagued manufacturers in recent years. So far, the damage hasn't been bad.

Habanos S.A., which makes the storied Montecristo, Cohiba and Partagas brands, moved $390 million in 2008. That's a drop of 3 percent from 2007. The company, a joint venture involving the Cuban government and Altadis, says that this hasn't affected profits significantly.

Unsurprisingly, Habanos blames smoking bans in France, Germany and the United Emirates (among others) in addition to the financial crisis. If you can't find a place to smoke, you aren't likely to do it as much (a trial I endured in Scotland last year).

But, economic conditions are still the main event, particularly when you consider the secondary effects.

International travel took a dive last year ... to the tune of 11 percent. What's that mean? American cigar dilettantes weren't able to piss away as much on Cuban sticks as they may have in the past. Duty free shops thus moved fewer cigars than usual, with total sales in these venues down 24 percent from 2007 to 2008.

Despite the slip in sales and claims that profitability isn't seriously impaired, Habanos isn't optimistic about the future. On the subject of the U.S. embargo on Cuba, typically a favorite topic of speculation, the company would only say that it has "much worse problems to deal with in the world."

[Via Latin American Herald Tribune, photo by Steve Zak]

A rare box of pre-embargo Romeo y Julieta Cuban cigars stars in Christie's Fine and Rare Wines and Vintage Cigars sale in London this Thursday. Expected to fetch up to $16,000, the box of 100 cigars from Winston Churchill's favored brand, labeled "Selección de Luxe", was originally purchased at Saks Fifth Avenue in New York prior to the enactment of the U.S. embargo against Cuba in 1962. The mint condition cigars in a wooden presentation case consist of 25 Petit Coronas, 25 Coronas, and 25 each of two sizes of Perfectos. Also featured in the luxurious sale are several cases of vintage Krug champagne, headed by a couple cases of Vintage 1985 estimated at about $3,000 each.

Cuban cigars are still going strong. The country sold about 160 million cigars last year in a $350 million business exporting cigars to Asia and Europe. The total was in line with recent years’ sales. The world market for premium cigars is about 400 million, half of which are sold in the United States although Cuban cigars can not be legally sold here. I wonder how many counterfeit Cubans were sold in the U.S. last year and what the numbers would be if Cuban cigars could be sold here.

[vintage poster via Havana Mike]