Exodus 180

[gweilgi]

4 hours ago, Philc2001 said:

@CaptainQuintero you may be right, I'm no expert in such matters, but I believe many of the American claims are legit and will hold up in international courts. Another key factor to bear in mind is the fact that Cuba needs the US much more than than the US needs Cuba. For all American intents and purposes, the US embargo could be maintained indefinitely. It's really up to the Cuban officials if they want to achieve a normalized relationship with the United States, their closest and wealthiest neighbor. That, in and of its own, is a big motivator for the Cuban nationals, despite being a major sore point for the Castro regime. While Castro remains there won't be any reparations, of that I am certain, but the successors may have a very different view. 

This NY Times piece lays out some of the claims by US corporations. It seems to support the notion that American property claims are within bounds of the international legal framework. It does not say much about the thousands of individual claims of Cuban-American nationals that were dispossessed of their wealth, their physical and intellectual property though.

http://www.nytimes.com/2015/12/14/world/americas/talks-begin-in-cuba-on-confiscated-us-property-worth-billions.html?_r=0 

Quote: When the Berlin Wall fell, American claimants got 100 percent of the value of their properties, plus interest.

In Latvia, Estonia, Lithuania, the Czech Republic and Slovakia, confiscated properties were sometimes returned to their original owners.

Of course, there are other precedents that were not as favorable for the claimants, but in most cases the claimants got not less than 10% of what they lost. As it pertains to our hobby, the key concern is what happens to Cuban tobacco. I think there is sufficient reason to believe Cuban tobacco will one day be exported, and that non-Cuban cigar interests will one day operate tobacco farms in Cuba, even if that is not any time soon. I don't really know whether that would be a good thing, or bad for cigar aficionados. 

The comparison with restitution claims after the reunification of Germany is obvious, except for one big difference: Germany had pots of money to satisfy claims.  

Legality aside, here's the big political question: does America really want another ramshackle bankrupt banana republic at its doorstep?  Arguably, of all the Latin American and Caribbean nations, Cuba has the best chances of making a fair go of it.  They have a well-educated workforce.  They have some decent industries: tourism, medicine, tobacco, possibly oil.  They have an excellent location.  There is no civil unrest (although that may well change with he demise of the Castros).  They already have established trade links with Western nations that do not subscribe to the US embargo.  So would a US government really want to throw all that to the dogs and be left with another local headache?  

[NSXCIGAR]

I think some of the speculation here is based on discussions of claims while the regime still exists, which I do not believe will ever happen. The regime must dissolve, and will consequently have no money to pay said claims. 

The matter is simply, if and when the regime dissolves, will the international courts decide to give the land back to the original owners (claimants) with compensation to the homesteaders who obviously deserve something, many of them working and living on the land their whole lives; or, do the courts award the land to the homesteaders with certain compensation due over time to the claimants, or some combination of that. I can imagine it's somewhat of an unprecedented situation in terms of case law.

As far as the monopoly, yes, the state does currently have a de facto monopoly on tobacco cultivation. The state owns that land, and Tabacuba manages it. The farmers are forced to "sell" as much tobacco as Tabacuba demands and keep only what Tabacuba decides can be kept. As long a the regime exists, Tabacuba exists, and the current approaches will continue.

As I said earlier also, HSA owns nothing and therefore Imperial owns nothing. HSA is merely the sales/marketing/distribution arm of Tabacuba. Tabacuba is a state-run company. No state, no Tabacuba, and no HSA. Imperial is only going to have claims on certain brand names including the Habanos name--that's it. Maybe not even that since there may even be claims by the original brand owners aside from the General Cigar claims. Imperial only makes money as long as Tabacuba operates HSA. HSA and Tabacuba will be defunct once private enterprise takes over, and Imperial stands to lose its entire ~$500 million stake. Basically, it's a game of musical chairs in terms of selling that position before the regime collapses. Thus the nature of investing in state-run enterprises. No state, no enterprise.

[gweilgi]

26 minutes ago, NSXCIGAR said:

I think some of the speculation here is based on discussions of claims while the regime still exists, which I do not believe will ever happen. The regime must dissolve, and will consequently have no money to pay said claims. 

The matter is simply, if and when the regime dissolves, will the international courts decide to give the land back to the original owners (claimants) with compensation to the homesteaders who obviously deserve something, many of them working and living on the land their whole lives; or, do the courts award the land to the homesteaders with certain compensation due over time to the claimants, or some combination of that. I can imagine it's somewhat of an unprecedented situation in terms of case law.

As a matter of curiosity: how were such claims resolved in the US when brought by Native Americans?  Would that not be a precedent?

 

26 minutes ago, NSXCIGAR said:

As far as the monopoly, yes, the state does currently have a de facto monopoly on tobacco cultivation. The state owns that land, and Tabacuba manages it. The farmers are forced to "sell" as much tobacco as Tabacuba demands and keep only what Tabacuba decides can be kept. As long a the regime exists, Tabacuba exists, and the current approaches will continue.

As I said earlier also, HSA owns nothing and therefore Imperial owns nothing. HSA is merely the sales/marketing/distribution arm of Tabacuba. Tabacuba is a state-run company. No state, no Tabacuba, and no HSA. Imperial is only going to have claims on certain brand names including the Habanos name--that's it. Maybe not even that since there may even be claims by the original brand owners aside from the General Cigar claims. Imperial only makes money as long as Tabacuba operates HSA. HSA and Tabacuba will be defunct once private enterprise takes over, and Imperial stands to lose its entire ~$500 million stake. Basically, it's a game of musical chairs in terms of selling that position before the regime collapses. Thus the nature of investing in state-run enterprises. No state, no enterprise.

Beg to differ.  Yes, the current regime may fail.  But unless Cuba devolves into a failed state with no recognised and legitimate government -- a highly unlikely scenario, IMO -- the state as such will continue.  There will be a successor government which will automatically be heir to all the assets and liabilities of its predecessor, including Tabacuba and HSA.  This new government may decide to continue running Tabacuba as a state enterprise, to privatise it as a going concern, or to break it up and sell off individual marcas or return them to their former owners.  The one thing that will not happen is that Tabacuba will simply vanish.  

[Fugu]

9 hours ago, gweilgi said:

The Germans have a saying that translates as "you can't reach into the pockets of a naked man".  How would any large claimant expect to receive compensation from Cuba?

That legal claim for compensation is jurisdictionally referring to the moment of seizure, not of today. Whether Cuba today has the money or not for compensation is plain irrelevant from a legal position. It is just about the fact that the nationalizations of property have been illegal (and not legal to do for any state, as the Captain stated) in 1959/60/61. Claims for compensation had been filed by the US in 1959 already!

And reg. the putative parallels to Germany/GDR - it has not been as simple as it would appear. Highly complex matter, and by far not all had been compensated! Just starting with the fact that it had to be painstakingly checked and verified whether seizures were done by the GDR state or even before by the Nazis (just to mention one aspect). Always difficult when dropping fom one dictatorship into the next (that is a parallel with Cuba)....

[Fugu]

5 hours ago, NSXCIGAR said:

As I said earlier also, HSA owns nothing and therefore Imperial owns nothing. HSA is merely the sales/marketing/distribution arm of Tabacuba. Tabacuba is a state-run company. No state, no Tabacuba, and no HSA. Imperial is only going to have claims on certain brand names including the Habanos name--that's it. Maybe not even that since there may even be claims by the original brand owners aside from the General Cigar claims. Imperial only makes money as long as Tabacuba operates HSA

Gents there seems to be slight confusion here. HSA is not operated by Tabacuba. They are independent entities. Tabacuba is the production branch, HSA is the distribution and marketing branch. Their contracting entity, real estate proprietor and holder of trademarks is Cubatabaco. It's also shareholder of HSA.

[PigFish]

Good job gentlemen, some very interesting opinions.

Have you noticed what happens when a society (or power structure) collapses in the Middle East? Unfortunately Cuba could be in for some rough waters ahead.

While many of us agree that Cuban Communism is not an umbrella we want to live under, many, many Cubans no nothing other. I hope to God that there are enough 'free-minded' people with some wealth and influence left on the island to lead a "free-state" counter revolution. And, that the US has enough moxy left, to discourage infiltration of yet another communist power with assets onto the island, or it starts all over again!

A power and leadership hole is a nasty thing for a country. It is typically filled with the either the most powerful, or the most brutal... I see the possibly of many Cubans, like doctors driving taxies, fleeing the island as soon as they can. The island may lose many, if not most of their highly skilled labor overnight. Many people can go to other countries, especially in Latin American and make a much better living...

What happens when people oppressed get their first taste of freedom... Some of them are going to look out for number 1 and say adios! Some that are left may be saying this is 'my' island now! The question is, who? The Cuban military? Ask yourself the mindset of those in power there? Do you make it to the top ranks of a communist military regime by being a freedom loving pacifist? Not exactly! It could very well be another blood bath... I don't know!

I am afraid that I don't have the information, or the training to speculate. I fear for a lot of those poor people. Thank God that the communist government of Venezuela is in shambles!

But the Russians are on the move again in their region, and so are the Chinese in theirs. I have long speculated that either entity might once more reach out to Cuba as a strategic partner, close to the US... I have long thought it would be China. Thank God for the low price of oil! Russia appears to move when they have large oil export capital to fund their military expansion.

Order a new box of cigars, my friends; tobacco, while our focus is the least of it. We shall see! Hopefully, for those left on the island the courts and arguing over land (in court) is the worst of it! -Piggy

[NSXCIGAR]

15 hours ago, gweilgi said:

As a matter of curiosity: how were such claims resolved in the US when brought by Native Americans?  Would that not be a precedent?

 

Beg to differ.  Yes, the current regime may fail.  But unless Cuba devolves into a failed state with no recognised and legitimate government -- a highly unlikely scenario, IMO -- the state as such will continue.  There will be a successor government which will automatically be heir to all the assets and liabilities of its predecessor, including Tabacuba and HSA.  This new government may decide to continue running Tabacuba as a state enterprise, to privatise it as a going concern, or to break it up and sell off individual marcas or return them to their former owners.  The one thing that will not happen is that Tabacuba will simply vanish.  

Interesting comparison to the Indians, but I think the circumstances were very different, not to mention many atrocities against the Indians had also been committed. In that case, the Indians were given other Federally owned land--not the original land in many cases. Much of that original land had been cleared for the railroads and settlements so that wasn't really an option.

Regarding the regime, outside of wartime or unequivocal crimes or atrocities, monetary reparations or compensation hasn't really been standard. In fact, Cuba is the only case I can even find discussed outside of those circumstances, giving credence to the position that this is a largely unprecedented scenario.

Also, the new government should not in theory inherit the assets nor liabilities of the old. The assets immediately return to private hands that would be determined by the courts.  And since nearly all state debts are denominated in the currency of the debtor country, all the regime would have to to is inflate the debt away. The new gov't would almost certainly be using a new currency anyway. 

Tabacuba/HSA as it functions today could not exist under a non-coercive regime. Or at least, it would fail quickly. Once the farmers have a choice in who they sell to, it's over. The new government could try to maintain it, but having to pay world market prices for tobacco will render it pointless. It would also no longer have an exclusive control of Cuban puros or new brands. Under free enterprise, the current model along with anything HSA/Tabacuba supposedly owns or controls becomes worthless. The state currently "owns" land and facilities that will all be returned to private hands after the regime collapses. HSA/Tabacuba only have value so long as the state owns the land and forces farmers to sell at sub-market prices as has occurred forever.

10 hours ago, Fugu said:

Gents there seems to be slight confusion here. HSA is not operated by Tabacuba. They are independent entities. Tabacuba is the production branch, HSA is the distribution and marketing branch. Their contracting entity, real estate proprietor and holder of trademarks is Cubatabaco. It's also shareholder of HSA.

Yes, absolutely correct, thanks for the clarification. Makes it even simpler. If Tabacuba holds the trademarks then Imperial is potentially in big trouble. I'm not sure what claim Imperial would have to anything then. I suppose it's possible that the trademarks become property of the new regime who could sell them to the highest bidder who may or may not include Imperial. All very intersting questions.

4 hours ago, PigFish said:

Good job gentlemen, some very interesting opinions.

Have you noticed what happens when a society (or power structure) collapses in the Middle East? Unfortunately Cuba could be in for some rough waters ahead.

While many of us agree that Cuban Communism is not an umbrella we want to live under, many, many Cubans no nothing other. I hope to God that there are enough 'free-minded' people with some wealth and influence left on the island to lead a "free-state" counter revolution. And, that the US has enough moxy left, to discourage infiltration of yet another communist power with assets onto the island, or it starts all over again!

A power and leadership hole is a nasty thing for a country. It is typically filled with the either the most powerful, or the most brutal... I see the possibly of many Cubans, like doctors driving taxies, fleeing the island as soon as they can. The island may lose many, if not most of their highly skilled labor overnight. Many people can go to other countries, especially in Latin American and make a much better living...

What happens when people oppressed get their first taste of freedom... Some of them are going to look out for number 1 and say adios! Some that are left may be saying this is 'my' island now! The question is, who? The Cuban military? Ask yourself the mindset of those in power there? Do you make it to the top ranks of a communist military regime by being a freedom loving pacifist? Not exactly! It could very well be another blood bath... I don't know!

All true for the most part. It's simply not enough to be "given" the gift or opportunity of freedom. If there isn't an underlying value system or set of principles in society that understands or appreciates freedom, it won't stick. Or at least an ideology of living without a powerful central state, such as when the Somali regime collapsed in the early 90s. It was replaced by nothing. There were no competing factions or civil wars as there typically are in vacuums of power. The people didn't care when the regime dissolved. As a result, people went about their business in a system of civil common law. It was fascinating. The area formerly known as the state of Somalia became the fastest growing region in Africa from 1991-2006 in almost all socio-economic metrics. It was only after 2006 when the UN began supporting the establishment of a new central gov't that things got bloody, and has sadly remained that way to this day.

[Colt45]

29 minutes ago, NSXCIGAR said:

 If Tabacuba holds the trademarks then Imperial is potentially in big trouble.

By trademarks do we mean brands? If so, the Altadis brands (Altadis being owned by Imperial), would not be a problem. The General Cigar brands would be at issue.

 

[gweilgi]

2 hours ago, NSXCIGAR said:

Interesting comparison to the Indians, but I think the circumstances were very different, not to mention many atrocities against the Indians had also been committed. In that case, the Indians were given other Federally owned land--not the original land in many cases. Much of that original land had been cleared for the railroads and settlements so that wasn't really an option.

Regarding the regime, outside of wartime or unequivocal crimes or atrocities, monetary reparations or compensation hasn't really been standard. In fact, Cuba is the only case I can even find discussed outside of those circumstances, giving credence to the position that this is a largely unprecedented scenario.

Also, the new government should not in theory inherit the assets nor liabilities of the old. The assets immediately return to private hands that would be determined by the courts.  And since nearly all state debts are denominated in the currency of the debtor country, all the regime would have to to is inflate the debt away. The new gov't would almost certainly be using a new currency anyway. 

As far as I can tell, new regimes always inherit from the old.  New governments in the Middle East took over both ownership of assets and resources (mainly oil), stepped into existing trade agreements and corporate structures such as partnerships with foreign firms, and acknowledged their liabilities (foreign debt).  Both the German and Austrian governments did so twice, after both world wars, even though they were legally speaking completely different entities.

 

2 hours ago, NSXCIGAR said:

Tabacuba/HSA as it functions today could not exist under a non-coercive regime. Or at least, it would fail quickly. Once the farmers have a choice in who they sell to, it's over. The new government could try to maintain it, but having to pay world market prices for tobacco will render it pointless. It would also no longer have an exclusive control of Cuban puros or new brands. Under free enterprise, the current model along with anything HSA/Tabacuba supposedly owns or controls becomes worthless. The state currently "owns" land and facilities that will all be returned to private hands after the regime collapses. HSA/Tabacuba only have value so long as the state owns the land and forces farmers to sell at sub-market prices as has occurred forever.

There are precedents for state monopolies on the sale, distribution and marketing of products such as alcohol or tobacco, exercised and enforced by quite democratic governments.  Until very recently, for instance, every tobacco product sold in Austria had to go through a state agency.  In Scandinavia, state-run alcohol distribution and sales are the norm.  So Tabacuba and HSA could quite possibly survive in their current form -- either as monopolies, or as former monopolies but market-leading local champions.  Personally, I would be quite happy to see the latter as I am not at all happy about the scenario of foreign firms rolling all over the Cubans to exploit and dominate them as has been common practice in all too many places.

Also bear in mind that Tabacuba would still own the infrastructure of processing all that leaf, and HSA would still be the organisation with all the marketing and distribution infrastructure.  Sure, a farmer could sell his leaf ... but to whom, and how?  Individual vegueros simply do not produce enough to be of interest to commercial outfits such as Padron, Fuente or Davidoff.  Sure, they could form cooperatives such as the coffee growers throughout Latin America, but that would still leave them very vulnerable to massive exploitation and would lose them all the added value of controlling the chain of production and distribution.

 

2 hours ago, NSXCIGAR said:

Yes, absolutely correct, thanks for the clarification. Makes it even simpler. If Tabacuba holds the trademarks then Imperial is potentially in big trouble. I'm not sure what claim Imperial would have to anything then. I suppose it's possible that the trademarks become property of the new regime who could sell them to the highest bidder who may or may not include Imperial. All very intersting questions.

Aren't you arguing against yourself here?  Earlier, you say that "the new [Cuban] government should not in theory inherit the assets nor liabilities of the old".  If that is so, then ownership of trademarks would have to be decided by a mad scramble to be the first to register them with the new government ... after lengthy lawsuits to assess claims by pre-Castro owners who may well assert their old ownership rights.

 

 

 

[NSXCIGAR]

5 hours ago, Colt45 said:

By trademarks do we mean brands? If so, the Altadis brands (Altadis being owned by Imperial), would not be a problem. The General Cigar brands would be at issue.

 

If Tabacuba owns the brands/trademarks as was suggested then yes, HSA/Imperial is in trouble. If I understand it correctly, Tabacuba is separate from HSA and essentially allows HSA to use the brands. Imperial has no stake in Tabacuba. In essence, the state owns the brands. This is how I interpret the relationship after the clarification from Fugu. However, I believe Altadis owned and brought over many of those brands prior to the HSA deal. So then, it it the case that HSA and not Tabacuba owns and controls the trademarks and brands?

And of course, the General brands are still in contention. 

 

3 hours ago, gweilgi said:

As far as I can tell, new regimes always inherit from the old.  New governments in the Middle East took over both ownership of assets and resources (mainly oil), stepped into existing trade agreements and corporate structures such as partnerships with foreign firms, and acknowledged their liabilities (foreign debt).  Both the German and Austrian governments did so twice, after both world wars, even though they were legally speaking completely different entities.

I did make a distinction between post-war situations and this one. Yes, post-war, those things do occur. As far as the Middle-Eastern governments, most were essentially either western-imposed dictatorships or democracies that had worked out exploitative deals with the west to address all that in exchange for support prior to assuming power. I suppose a similar deal could be worked out with the new Cuban regime, but that's usually a recipe for disaster and fundamentally constitutes nation-building, in my opinion.

I'd hate to see the Cubans hesitant in embracing regime change because they feel they're going to be held responsible for acts by the Castros that occurred before most were even alive. The west is always eager to cut exploitative deals with these developing countries and I just feel that the return of property and wiping the slate clean is the best approach in Cuba's case--not that it will happen that way. But I hope.

 

3 hours ago, gweilgi said:

Also bear in mind that Tabacuba would still own the infrastructure of processing all that leaf, and HSA would still be the organisation with all the marketing and distribution infrastructure.  Sure, a farmer could sell his leaf ... but to whom, and how?  Individual vegueros simply do not produce enough to be of interest to commercial outfits such as Padron, Fuente or Davidoff.  Sure, they could form cooperatives such as the coffee growers throughout Latin America, but that would still leave them very vulnerable to massive exploitation and would lose them all the added value of controlling the chain of production and distribution.

Yes, it is possible that the new regime could set up a state monopoly for tobacco similar to alcohol in many European countries. But I'm not aware that they function for anything other than the retail of product and would function very differently than HSA/Tabacuba does now. Also, I don't see why producers couldn't contract with certain vegueros to purchase leaf directly or how voluntary cooperatives would be exploitative. Cuba was able to produce plenty of tobacco both for domestic use and export pre-revolution without too much difficulty. Hundreds of brands co-existed and vegueros were free to do with their tobacco what they wished.

 

3 hours ago, gweilgi said:

Aren't you arguing against yourself here?  Earlier, you say that "the new [Cuban] government should not in theory inherit the assets nor liabilities of the old".  If that is so, then ownership of trademarks would have to be decided by a mad scramble to be the first to register them with the new government ... after lengthy lawsuits to assess claims by pre-Castro owners who may well assert their old ownership rights.

That's only true if it's Tabacuba/the government owns the trademarks which may not be the case. If in fact HSA/Imperial/Altadis owns them, disregard that.

If the government owns seized property, intellectual or otherwise, and the regime collapses, that property should return to private hands and/or be auctioned off. That would be decided by the international courts I suppose. All property in Cuba not owned by the state pre-rev should be returned or auctioned. Yes, it's going to be a messy proposition sorting out the claims, but that's what courts are for. Again, if Altadis brought the brands over, they are theirs and should remain so. But the brands are the only thing HSA/Tabacuba really owns since nearly every other asset they have was seized. They may lose all the other brands that are in contention as well leaving Imperial with only the Altadis-owned brands. Their present value comes mainly from their monopoly power.

[gweilgi]

7 hours ago, PigFish said:

Good job gentlemen, some very interesting opinions.

Have you noticed what happens when a society (or power structure) collapses in the Middle East? Unfortunately Cuba could be in for some rough waters ahead.

While many of us agree that Cuban Communism is not an umbrella we want to live under, many, many Cubans no nothing other. I hope to God that there are enough 'free-minded' people with some wealth and influence left on the island to lead a "free-state" counter revolution. And, that the US has enough moxy left, to discourage infiltration of yet another communist power with assets onto the island, or it starts all over again!

A power and leadership hole is a nasty thing for a country. It is typically filled with the either the most powerful, or the most brutal... I see the possibly of many Cubans, like doctors driving taxies, fleeing the island as soon as they can. The island may lose many, if not most of their highly skilled labor overnight. Many people can go to other countries, especially in Latin American and make a much better living...

What happens when people oppressed get their first taste of freedom... Some of them are going to look out for number 1 and say adios! Some that are left may be saying this is 'my' island now! The question is, who? The Cuban military? Ask yourself the mindset of those in power there? Do you make it to the top ranks of a communist military regime by being a freedom loving pacifist? Not exactly! It could very well be another blood bath... I don't know!

I am afraid that I don't have the information, or the training to speculate. I fear for a lot of those poor people. Thank God that the communist government of Venezuela is in shambles!

But the Russians are on the move again in their region, and so are the Chinese in theirs. I have long speculated that either entity might once more reach out to Cuba as a strategic partner, close to the US... I have long thought it would be China. Thank God for the low price of oil! Russia appears to move when they have large oil export capital to fund their military expansion.

Order a new box of cigars, my friends; tobacco, while our focus is the least of it. We shall see! Hopefully, for those left on the island the courts and arguing over land (in court) is the worst of it! -Piggy

You are quite correct, this is a nasty possibility.  The Castro regime has been blessed (if that is the right word) with an absence of any credible and globally acknowledged opposition.  For most Arab dictatorships, there was some sort of active opposition (usually several) recognised as such by the West which were useful in providing at least a starting point for a new political system.  As far as I can tell, there is no such group in Cuba.  This makes a power vacuum a very real risk -- especially as the West does not exactly have a good track record at managing regime changes and supervising transitions.  We prefer high-falutin' speechifying full of noble sentiment and maybe a few dollops of aid to the long-term active commitment that would be required.  

I would also like to draw a comparison with Germany.  Yes, the situation was fundamentally different, but the locals, after the first rush to the West and after the first orgy of consumerism, very quickly became disaffected -- a state of affairs that continues to this day.  They found that while they did like supermarkets and well-paying jobs and all the other trimmings of a capitalist system, they very much regretted the dismantling of all the social services and missed the community aspects of social equality and solidarity.  They resent the influx of foreign capital, of outsiders lording it over them.  I can very well see Cubans reacting the same way.  

[gcman68]

Very interesting thread!  I hope when the dust settles the people do better than the Native Americans did at least originally. I can certainly say that I have "donated" more than my share back over the years. 

On to cigars I wouldn't be surprised if they didn't just put a ban on the export of non rolled tobacco, assuming they had an interest in allowing private companies to conduct business in the Country. If you want to make Cuban cigars then they are grown, rolled and packaged by Cubans in Cuba etc etc  Just my two cents. 

[Philc2001]

1 hour ago, gcman68 said:

On to cigars I wouldn't be surprised if they didn't just put a ban on the export of non rolled tobacco, assuming they had an interest in allowing private companies to conduct business in the Country. If you want to make Cuban cigars then they are grown, rolled and packaged by Cubans in Cuba etc etc  Just my two cents. 

While Castro and the communist regime are in power, I agree. But I can't help feel/think/believe that for Cuba to emerge from the dark ages they will have to privatize and allow industry to innovate. Whether they will or not is big mystery, but if they follow in the footsteps of China, Russia and others, they will have to let private enterprise run private business without handcuffing them to communist ideals.

[NSXCIGAR]

2 hours ago, gcman68 said:

On to cigars I wouldn't be surprised if they didn't just put a ban on the export of non rolled tobacco, assuming they had an interest in allowing private companies to conduct business in the Country. If you want to make Cuban cigars then they are grown, rolled and packaged by Cubans in Cuba etc etc  Just my two cents. 

They could, but that alone accomplishes little. NC producers could set up shop in Cuba, bringing other tobaccos with them or roll puros in Cuba, keeping the Cuban tobacco there and the added final value for themselves. To prevent that, you'd have to implement controls on exporting both raw materials and finished product, tightly controlling every cigar produced. The new regime would have to control who the vegueros sell to and also ban foreign producers from operating in Cuba. That sounds like no change in the regime from today. Either there's economic freedom or there's the same regime with different people in charge. 

[shlomo]

17 minutes ago, NSXCIGAR said:

They could, but that alone accomplishes little. NC producers could set up shop in Cuba, bringing other tobaccos with them or roll puros in Cuba, keeping the Cuban tobacco there and the added final value for themselves. To prevent that, you'd have to implement controls on exporting both raw materials and finished product, tightly controlling every cigar produced. The new regime would have to control who the vegueros sell to and also ban foreign producers from operating in Cuba. That sounds like no change in the regime from today. Either there's economic freedom or there's the same regime with different people in charge. 

Flying under a different name...this proposed "freedom"  wont help anybody but the jefes in both Cuba and the USA.

[shlomo]

3 hours ago, gcman68 said:

Very interesting thread!  I hope when the dust settles the people do better than the Native Americans did at least originally. I can certainly say that I have "donated" more than my share back over the years. 

On to cigars I wouldn't be surprised if they didn't just put a ban on the export of non rolled tobacco, assuming they had an interest in allowing private companies to conduct business in the Country. If you want to make Cuban cigars then they are grown, rolled and packaged by Cubans in Cuba etc etc  Just my two cents. 

The people will get trampled on or used and spit out. Call me a pessimist......or realist....

[Fugu]

On 13/09/2016 at 6:11 AM, NSXCIGAR said:

If Tabacuba owns the brands/trademarks as was suggested then yes, HSA/Imperial is in trouble. If I understand it correctly, Tabacuba is separate from HSA and essentially allows HSA to use the brands. Imperial has no stake in Tabacuba. In essence, the state owns the brands. This is how I interpret the relationship after the clarification from Fugu. However, I believe Altadis owned and brought over many of those brands prior to the HSA deal. So then, it it the case that HSA and not Tabacuba owns and controls the trademarks and brands?

Still not completely captured:

There are two different corporations 'Tabacuba' and 'Cubatabaco'. Although sounding very similar being completely different entities. Cubatabaco "controls" (if you will, legally and/or effectively) Tabacuba and HSA.

CUBATABACO = Empresa Cubana del Tabaco (founded in 1962)
TABACUBA = Grupo Empresarial de Tabaco de Cuba (since 2001)
(and Habanos SA since 1994)

Tabacuba currently is a conglomerate of > 40 national and international companies (as per 2016, as of a recent Granma publication) under its umbrella. And it's not just involved in premium cigar production, which is often forgotten, utilizing foreign capital through three transnational joint-ventures, such as Habanos SA (Imperial Tobacco Group), Brascuba SA (cigarettes, with Souza Cruz Brazil (BAT- Group)), and ICT, Internacional Cubana de Tabacos SA (Minis and Mecanizados, again with Imperial/Altadis, collab. starting out already in the 90s with former Seita & Tabacalera). The Tobacco Research Institute is also part of the Tabacuba network.

So, to summarize, Tabacuba and HSA are the operational businesses, Cubatabaco holds all property and property rights, and partially acts as a shareholder (difficult to gather precise info and figures here, if someone got - please share). It may appear that Cubatabaco is the most valuable asset. But in practice, the one is nothing without the other, I guess.

 

As to the marca-ownership/property rights: The trademarks, i.e. marcas as well as the Habanos TM are held by CUBATABACO, and they are usually the body that watches over them and files the legal claims. There was a lawsuit in the early 90s with Seita and Tabacalera, I know of. I think it was regarding Montecristo and Partagas in those markets, I read somewhere in an older CA interview. Not sure how that actually settled, who those marcas actually owns today (the trademark-rights could theoretically be split for separate markets of course), whether it is Cubatabaco or whether they pay royalties or the like. Perhaps our French friends Guy and Smallclub can say more?

 

[Fugu]

8 hours ago, NSXCIGAR said:

They could, but that alone accomplishes little. NC producers could set up shop in Cuba, bringing other tobaccos with them or roll puros in Cuba, keeping the Cuban tobacco there and the added final value for themselves. To prevent that, you'd have to implement controls on exporting both raw materials and finished product, tightly controlling every cigar produced. The new regime would have to control who the vegueros sell to and also ban foreign producers from operating in Cuba. That sounds like no change in the regime from today. Either there's economic freedom or there's the same regime with different people in charge. 

Of course they will control that (under any regime/government) and it would be a matter of gross negligence if they didn't!

Had been done in the past, long before the Castros, as Cuba learned a bitter lesson from the introduction on foreign breed tobacco in the beginning of the last century. A national tobacco research started out at the same time.

Needs no totalitarian regime for protection(ism), national action and control (our FDA-plagued BOTL should know best... )

[NSXCIGAR]

14 hours ago, Fugu said:

Still not completely captured:

There are two different corporations 'Tabacuba' and 'Cubatabaco'. Although sounding very similar being completely different entities. Cubatabaco "controls" (if you will, legally and/or effectively) Tabacuba and HSA.

CUBATABACO = Empresa Cubana del Tabaco (founded in 1962)
TABACUBA = Grupo Empresarial de Tabaco de Cuba (since 2001)
(and Habanos SA since 1994)

Tabacuba currently is a conglomerate of > 40 national and international companies (as per 2016, as of a recent Granma publication) under its umbrella. And it's not just involved in premium cigar production, which is often forgotten, utilizing foreign capital through three transnational joint-ventures, such as Habanos SA (Imperial Tobacco Group), Brascuba SA (cigarettes, with Souza Cruz Brazil (BAT- Group)), and ICT, Internacional Cubana de Tabacos SA (Minis and Mecanizados, again with Imperial/Altadis, collab. starting out already in the 90s with former Seita & Tabacalera). The Tobacco Research Institute is also part of the Tabacuba network.

So, to summarize, Tabacuba and HSA are the operational businesses, Cubatabaco holds all property and property rights, and partially acts as a shareholder (difficult to gather precise info and figures here, if someone got - please share). It may appear that Cubatabaco is the most valuable asset. But in practice, the one is nothing without the other, I guess.

 

As to the marca-ownership/property rights: The trademarks, i.e. marcas as well as the Habanos TM are held by CUBATABACO, and they are usually the body that watches over them and files the legal claims. There was a lawsuit in the early 90s with Seita and Tabacalera, I know of. I think it was regarding Montecristo and Partagas in those markets, I read somewhere in an older CA interview. Not sure how that actually settled, who those marcas actually owns today (the trademark-rights could theoretically be split for separate markets of course), whether it is Cubatabaco or whether they pay royalties or the like. Perhaps our French friends Guy and Smallclub can say more?

OK, yes, I was conflating Cubatabaco with Tabacuba apparently. Thank you. So my speculation regarding the actual ownership of the brands still holds--do they belong to Tabacuba (the state) or do they belong to HSA (Imperial)? Didn't Altadis (Imperial) bring ownership of the brands they owned, thus unifying the Cuban and NC brands not owned by General? If the regime and therefore Cubatabaco collapses, are the brands returned to Altadis or did Altadis relinquish ownership to Cubatabaco as part of the HSA deal?

14 hours ago, Fugu said:

Of course they will control that (under any regime/government) and it would be a matter of gross negligence if they didn't!

Had been done in the past, long before the Castros, as Cuba learned a bitter lesson from the introduction on foreign breed tobacco in the beginning of the last century. A national tobacco research started out at the same time.

Needs no totalitarian regime for protection(ism), national action and control (our FDA-plagued BOTL should know best... )

Not familiar with the problems arising from non-Cuban tobacco in Cuba in the early 20th century...anything I can reference?

I'm confused as to why experimentation with tobacco of different origins would be an issue...if it's unsuccessful just revert back. 

Anyway, just because most governments restrict or regulate production--even western ones--doesn't make it right in any way. Virtually all interventions in those areas benefit the well-connected or entrenched special interests at the expense of the masses. It's a natural right to be able to grow what you want on your land, and sell what you grow to whomever you choose. Tobacco isn't a Cuban "national product" any more than sugar cane is or wheat or cotton is in the US--it's just propaganda and an excuse to nationalize it.

And as far as foreign ownership of land, despite the appearance of undesirable consequences, nothing bad ever came solely from foreign investment and land ownership. Here's an instructive article on the embracing of foreign investment and ownership of Australian farmlands: http://www.weeklytimesnow.com.au/news/national/the-real-picture-of-foreign-ownership-of-australian-farms/news-story/0c5abf7560911750bf22004c96bfb55c

Of course, you're probably very right that the industry will be regulated and controlled strictly as is often done in the west. Convincing people that markets should be free is a tough case to make, even in the west. It's a shame too since a very good case can be made that despite the tumultuous political conditions, US imperialism, high degree of foreign land ownership, corporate raiding and corruption that existed pre-revolution, the average Cuban's relative standard of living was higher then than it was at any time post-revolution. Many of the hardships experienced by the average Cuban were exacerbated by the growing power of organized labor in the 1930s-1950s. This union power severely limited productivity and capital investment, somewhat analogous to Detroit from 1970-1990. Ironically, much of the strife leading to the embrace of the socialists was created by socialist policies prior to the revolution.