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Travel to Cuba?

Now that Obama has lifted Travel Restrictions to Cuba, dose anyone plan to make a trip? And now that restrictions are lifted dose that mean that the Embargo is next? And.... if so, what dose the mean for the Cigar Industry in Central and South America?

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Permalink Reply by Addiction on March 9, 2010 at 11:49am

“As for the smokes, once the embargo is lifted cigars would flow into America and consumed with great enthusiasm. But that enthusiasm would fade after some time. Just as the rise of vineyards in California, Oregon, and South Africa haven't squashed the fortunes of French wines, so too cigars from the DR and Honduras will thrive in an America where Cubans are readily available.”

Some will, some won’t. The wine analogy isn’t as useful because while scientifically you can improve growing soil and processes there is enough money in wine or other agricultural products to do that. Cigars are just such a small market that even the big companies like Altadis and General don’t care that much about improving the process of growing quality tobacco. Hell in fact most of the really large companies would prefer you buy white owls or el productos or whatever the variant is they make because the profit, for them, on those lines of business are CONSIDERABLY higher than on the cigars we appreciate.

So it comes down to the growing regions and expertise. Cuba wins the growing region argument as Cuban fields were growing over 100 years before a lot of the Nic and Dom Rep tobacco was ever planted. I think NCs have more expertise making cigars tho, the product is more consistent and much more rare to be defective.

However Cubans will wear out the others over time because in America the casual smoker counts for a significant portion of the B&M business and those guys like their status symbols. Weddings, birthdays, retirements etc will be occasions when the buyer wants something special and since in the beginning of the post-embargo boom retailers will be able to give Cubans the “Opus treatment’ and sell them for many times the asking price you will see these cigars become more and more commonplace and see smaller cigar makers who don’t have fantatical following (like Pete Johnson has) will take the hit.

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Permalink Reply by Addiction on March 9, 2010 at 1:01pm

One more quick thought. For those who don’t know Cubatobacco is the business entity responsible for producing tobacco and cigars in Cuba. Its owned solely by the government. S. A. Habanos owns the sale and marketing of Cuban cigars almost all over the world. Almost because there are some exceptions, tho these exceptions are not important for this discussion.

S. A. Habanos is owned by Altadis, well at least 50%. And Altadis among other things, sells Montecristo, H Uppman, Trinidad and RyJ cigars in the US. So the company that would market CCs in the US already has people and resources dedicated to the distribution of cigars in the states.

Now most Cubans face trademark infringement issues. For example there are CC Cohibas and NC Cohibas. There would typically be issues to try to have both of those on the shelves at the same time. But since Altadis owns both the CC and NC Montes, Upmans, Trinis and RyJs I’d imagine thet could clear that issue up very very very quickly. The other brands would have some legal issues to deal with or would have to be rebranded but those 4 brands should be able to be made available very quickly.

It should also be noted that S. A. Habanos has lots of historical data about what their cigars can be sold for in the US. The chances they screw that up are low.

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Permalink Reply by Buddha Kalutika on March 10, 2010 at 2:09pm

I am one for exploration. Cultural or geographic, both are passions of mine so I would be happy for the opportunity to travel to Cuba.
Regarding their cigars and the possible influx this could create (smuggled in various ways) as well as the eventual lift of the embargo (we are getting there)... meh. I have never gone out of my way to seek out Cuban cigars and am not of the socioeconomic status to do so (see: poor). If I really wanted Cubans I could drive to Canada and drop a bunch of money. If the embargo was lifted I could see trying out a couple Cubans as special occasion cigars and nothing more. I could also see a good number of people shifting focus temporarily but I don't see this having a destructive impact on the non-Cuban market anymore than the super premiums have hurt the dollar stick market. People like what they like and buy what they can afford.

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Permalink Reply by Blackie Blackwell on March 10, 2010 at 6:37pm

You would love Cuba. The people there are great, the Government on the other hand.......

As I said, the people there are great, they will bend over backwards to make you feel at home, unlike some of the Cuban-American I have known. Now don't get wrong, I not saying that all Cuban-American have a chip on there shoulders, but a lot of them do. I don't blame them for being upset with the state of there current Cuban Government, but hey it's not me that put Fedale Castrol in power. Go dig up JFK and give him hell.

Sorry, just venting over my past in Little Havana, Miami.

If you do get to Cuba, only plan one day and one night in Havana. Head out to the country and to the small towns and you will see life without the National Revolutionary Police Force (PNR) watching over every one. But keep in mind the PNR is every were, just because you don't see a uniform doesn't mean they are not there. You just don't feel like they are watch you like they do in Havana. Don't talk about the Government and you will be okay.

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Permalink Reply by Buddha Kalutika on March 10, 2010 at 8:06pm

Then I'm screwed. I love my soap box! It's been with me for a long time.

Sounds wonderful though. I prefer meeting the people over meeting the buildings so the country is the place for me.