Cuban Cigar Sales Plummet 8% in 2009

[thechenman]

This isn't surprising, but I thought some of you might be interested in this brief statement by CNBC. In print yesterday, but reported on television today...

Cuban cigar sales plummeted 8 pct in '09: The Associated Press | 22 Feb 2010 | 02:54 PM ET HAVANA - Cuban cigar sales tumbled 8 percent to $360 million in 2009 and have fallen by more than a tenth in the past two years as the demand for luxury goods around the world has plunged.

Government-run tobacco company Habanos SA said Monday that sales were most sluggish last year in Spain, the top market for the island's coveted stogies, but one also ravaged by recession and rising unemployment.

A drop in international travel also hurt sales at airport duty free shops in Cuba and elsewhere, which account for as much as 23 percent of the company's total business, said Habanos Vice President Manuel Garcia.

"This is not what we were expecting, not what we hoped for anyway," Garcia said during a news conference kicking off Cuba's five-day annual cigar festival.

Garcia said economic turmoil has decimated demand for all kinds of finer things, from cognac to luxury convertibles to cigars. Habanos sales slumped 3 percent in 2008, when a financial crisis sent stock and commodities prices plummeting around the world.

"It's been a series of negative factors," Garcia said.

He would not say how many cigars Habanos sold in 2009. France, Germany and Cuba itself are also top Habanos markets. Washington's trade embargo against Cuba turned 48 this month and it prohibits Cuban cigars from being sold in the U.S.

Like wine, the taste of top tobacco depends on the soil and climate in which it is grown. Sun-drenched plantations in the humid, western province of Pinar Del Rio, especially in its famed Vuelta Abajo fields, have made Cuban cigars famous for centuries. The vast majority of stogies produced on the island are hand-rolled and destined for premium sellers.

Habanos was founded in 1994 as a joint venture between Cuba and Madrid-based Altadis SA, part of the island's push to draw private, foreign investment after the collapse of the Soviet Union cost it island billions of dollars in annual subsidies and trade. Altadis has been acquired by Britain's Imperial Tobacco Group PLC.

Habanos produces 27 premium cigar brands in 220 different sizes, some as small as cigarettes and others nearly as big as a Chihuahua puppy. Garcia said Habanos has 146 stores worldwide, two more than the number of authorized dealers at the end of 2008.

The flagship Cohiba brand was created in 1966 for Fidel Castro — perhaps the world's most famous cigar smoker — and top Cuban leaders to enjoy personally or give as gifts to visiting foreign dignitaries. Cohibas were authorized for sale on the open market in 1982, and Castro abruptly gave up smoking on doctors orders three years later.

Copyright 2010 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

[Colt45]

Perfect time to roll out the new behikes! Thanks for the info.

[OZCUBAN]

Looks looks like the marketing people are on the money let release more expensive cigars

[Tampa1257]

If they announced a 8% drop in sales, you could easily double or triple that figure in realtiy in my opinion. When the press is even giving Habanos s.a. a hard time about their "Big Fatties", i.e., "as big as a Chihuahua puppy", then its time to thin the size of the cigars.

[cigarros]

Thanks for sharing this info! HSA considers that Lord helps those who help themselves

[Habanos2000]

If they announced a 8% drop in sales, you could easily double or triple that figure in realtiy in my opinion.

I agree with you 100% on this.

[Jimmy2]

I agree with the current economy and the old Cuban cigar line up that people dont buy no more i think the changes they are making and the Economy starts an up swing they will make up with what they have lost.

But the biggest problem is the Economy make no one tell you differant as this is reality and not fantasy ! people just dont have the money they had before all this **** hit the fan....

[rckymtn22]

If they lowered the price a bit and customs would look the other way I would buy more.

[ChanceSchmerr]

customs would look the other way I would buy more.

x2

totally.

[Buch0]

If they announced a 8% drop in sales, you could easily double or triple that figure in realtiy in my opinion. When the press is even giving Habanos s.a. a hard time about their "Big Fatties", i.e., "as big as a Chihuahua puppy", then its time to thin the size of the cigars.

Couldn't agree more with both of those points Tampa.

In my heart I would like to think that the drop in sales was because of a boycott of the larger ring cigars and the discontinued gems we always talk about around here, but I am naive in believing that.. Its easy to forget the FOH community is such a small minority.

[OZCUBAN]

Hi All

This is just a thought ,why don't Habanos,if worried about lagging sales ,conduct a world wide poll on just what their CUSTOMERS want,instead of telling us what they think we want,I am sure that the lovers of Cuban Cigars worldwide would respond,I know I would.

Companies that do not listen to their customers go the way of the Dinosaur.

we want what we want not what were told we can have

Cheers Oz

[josie67]

If they lowered the price a bit and customs would look the other way I would buy more.

That would be too easy.

[Jimmy2]

The sales world wide reflect what CUSTOMERS are buying and they are making changes based on that...

[Tampa1257]

That is an assumption that can not be proved one way or another.

[Ozz1113]

And for all of you buying vintages, it may not count for this years sales.

[SethG]

Bah, Cuba's numbers are likely all lies in the first place and, more importantly, the single and most relevant thing Habanos can do to increase sales by 25% overnight is.... to get the embargo removed.

Bottom line, all these numbers will look silly after the first 1-2 years they get to ship an unlimited supply to the US for all those people crazy for "their first habano!"

[aes8]

Hey Oz,

Please keep in mind that HSA is (half) owned by the Cuban gov't which is a Communist Dictatorship.

I don't think they are really down with evaluating customer feedback per se, although I do agree with your general idea of the customer speaks with cash.

[Buch0]

Bottom line, all these numbers will look silly after the first 1-2 years they get to ship an unlimited supply to the US for all those people crazy for "their first habano!"

Where will that leave the quality of them?!?

[Hugomarink]

I don't know how much it contributes to lower sales, but tobacco taxes in countries such as the UK and Canada are so ridiculously high that I don't know how the average citizen in those countries can even afford to smoke premium Havanas these days.

[Colt45]

I don't know how much it contributes to lower sales, but tobacco taxes in countries such as the UK and Canada are so ridiculously high that I don't know how the average citizen in those countries can even afford to smoke premium Havanas these days.

Yeah, but they get free health care!

[LeafLover]

My wallet was well within the 92 percentile.