How can Cuban cigars enter US shelf life?

[shlomo]

2 hours ago, Philc2001 said:

I was happiest when CCs came in a plain SLB cedar boxes, and the cigars had no labels, just a yellow ribbon. You can't smoke the box or the label, so why waste money on it? 

But... the average American consumer who walks into a cigar shop and is confronted with thousands of boxes to choose from has a lot of options vying for his/her wallet, and many are impulsive. Eye candy works, and so do well established brand names. A lot of casual NC smokers who don't have a trained palate buy Romeos, Montes, Partagas and Cohibas just because of the name cache.  They're dropping $10-$15 a stick in retail B&Ms. Then you have the semi-collector who goes for super-premiums like Fuente, Opus, Padron, Ashton, and so on, just because they are somewhat rare and for bragging points. These guys are dropping $15-$25 per stick at retail, and upward of $400/box online for 20-25 cigars.  

Sadly, if/when CCs come to the US this is what is waiting for them. HORROR!

There are plenty of $15-$20 Cuban cigars around at retail, and depending on country costs can rise to WELL over $100 per REGULAR PRODUCTION cigar. 

[Philc2001]

29 minutes ago, shlomo said:

There are plenty of $15-$20 Cuban cigars around at retail, and depending on country costs can rise to WELL over $100 per REGULAR PRODUCTION cigar. 

Thanks @shlomo. When you say there are plenty at retail, I assume you mean in Canada, right? If I'm not mistaken, Canada has a 100% or more sin tax on tobacco products, and last time I was there an MC#2 was about $24, and a Part Lusitania was about $30. Frankly, I didn't find any of my regulars for under $20. Retail in the US (if that ever happens) may be quite different, but a lot depends on the outcome of any settlements with Cuban exiles. It may come down to paying royalties to exiles perhaps, but of course we speculate. 

If/when CCs come to the US, my guess is the pricing at retail will be roughly double what we pay on the Internet, whatever that is at that time. 

EDIT: 

I would add that if they start adding fancy labels and boxes, the prices we pay today may be a wet dream. I'd hate to see what they would charge if they try to emulate Opus or Padron packaging. 

[canadianbeaver]

Perhaps the only way the names will be able to be used in the USA without compromise is to be at licensed LCDH.

[canadianbeaver]

47 minutes ago, Philc2001 said:

Thanks @shlomo. When you say there are plenty at retail, I assume you mean in Canada, right? If I'm not mistaken, Canada has a 100% or more sin tax on tobacco products, and last time I was there an MC#2 was about $24, and a Part Lusitania was about $30. Frankly, I didn't find any of my regulars for under $20. Retail in the US (if that ever happens) may be quite different, but a lot depends on the outcome of any settlements with Cuban exiles. It may come down to paying royalties to exiles perhaps, but of course we speculate. 

If/when CCs come to the US, my guess is the pricing at retail will be roughly double what we pay on the Internet, whatever that is at that time. 

EDIT: 

I would add that if they start adding fancy labels and boxes, the prices we pay today may be a wet dream. I'd hate to see what they would charge if they try to emulate Opus or Padron packaging. 

Do not forget it is not the Cuban companies that prepare USA branding. It is General Cigar Co, a division of Swedish Match.

[Jimmy_jack]

1 hour ago, shlomo said:

What does selling in an LCDH shop have to do with quality?

fewer shops to stock.

[PigFish]

1 hour ago, Philc2001 said:

Thanks @shlomo. When you say there are plenty at retail, I assume you mean in Canada, right? If I'm not mistaken, Canada has a 100% or more sin tax on tobacco products, and last time I was there an MC#2 was about $24, and a Part Lusitania was about $30. Frankly, I didn't find any of my regulars for under $20. Retail in the US (if that ever happens) may be quite different, but a lot depends on the outcome of any settlements with Cuban exiles. It may come down to paying royalties to exiles perhaps, but of course we speculate. 

If/when CCs come to the US, my guess is the pricing at retail will be roughly double what we pay on the Internet, whatever that is at that time. 

EDIT: 

I would add that if they start adding fancy labels and boxes, the prices we pay today may be a wet dream. I'd hate to see what they would charge if they try to emulate Opus or Padron packaging. 

It appears to me, that the past 12 months we have come as close as we are going to come to Cuban cigars in the US. Visiting the island is one thing, but that probably still flies in the face of Helms-Burton.

I don't really care. This is not 20 years ago! People trust the internet for purchases now. People who want CC have sources, good, bad and ugly.

The government has created this black market, and it has been a okay for me. I suppose I would rather see my friend Rob here continue is quest to farm Yanks to sell cigars to, as the folks at home have plenty to smoke, and most of them are quite content sporting a WWE belt on a cigar the same size as the wrestlers!

By the time things change, dope will be had out of a vending machine, and tobacco will be illegal... Cuban cigars will be down to 2 brands, no one will be able to keep track of all the ELs and REs, frauds will likely be as good as the original product, and I will have little interest in either!!!

Cheers! -Piggy

[PigFish]

Posterboy for the American cigar smoker!!! -LOL

... boy can I have fun with the tastes of my amigos!!!

-the Pig

[Dmpotocek]

Another possible scenario, if CC's make it to the US in a commercial capacity, it may not be the entire Habanos portfolio. Altadis has a 50% stake in HSA, and also owns a handful of the NC versions as well. (How they navigated that deal is beyond me)


Sent from my iPhone using Tapatalk

[shlomo]

3 hours ago, Jimmy_jack said:

fewer shops to stock.

There are zero american LCDH right now. So by your logic, quality will go down if even one opens?

Sorry, but quality has nothing to do with the who the re-seller is. It has to do with the rollers at the factories and the farmers in the fields.

[Jimmy_jack]

There are zero american LCDH right now. So by your logic, quality will go down if even one opens?

Sorry, but quality has nothing to do with the who the re-seller is. It has to do with the rollers at the factories and the farmers in the fields.

I'm very familiar that there aren't any LCDH in America. I'm simply saying that when they are legal here, they would be best served to open them. Then only sell from those stores. Easier to keep quality when you're only supplying to 100 stores in the USA, instead of 1500.




Sent from my iPhone using Tapatalk

[JLFIRST]

Long before you see CCs on US shelves, there are a lot of trademark and property disputes that need to be settled, so I think it will take years for that, if it ever gets anywhere at all. 

That said, the visuals will be very crucial. Many American consumers are impulsive and they are impressed with Bling. The packaging has to show quality and it must impress. Take a look at the packaging from Fuente, especially Opus, or Davidoff, or Diamond Crown, or Padron, and several others. The boxes and the labels are a big part of the marketing appeal.  

 


 

 



 




 



 

 

Yes indeed. Look at the new 20th Anniversary Opus X, empty boxes selling anywhere from 60 to 100 US dollars. Packaging takes up way to much of the cost of the cigar here in the USA, in my opinion.

Sent from my SAMSUNG-SM-G900A using Tapatalk

[Jimmy_jack]

The packaging for NC is also to bulky and dissimilar. Makes for bad shelving. 

[BrightonCorgi]

Going to be a hay day for Lawyers with trademark disputes.  Can Habanos prove they are the rightful owners of the marques they sell?  

I don't think it is wise for Habanos to jump into the US market all at once.  What about their current distribution change.  Would they shortchange long standing relationships just for US?  Does Habanos risk introducing lower quality product to meet demand?  They tried this before.  Not worth the risk of loss of reputation just to make a quick buck.  They need to be careful.

Keep in mind, that in countries like Germany, Habanos is a minority percentage of all cigar sales.  There will be a lot of US cigar smokers that will prefer NC's for whatever reason.  The obvious would be strength, price, more consistent construction.  

[Dmpotocek]

Going to be a hay day for Lawyers with trademark disputes.  Can Habanos prove they are the rightful owners of the marques they sell?  

I don't think it is wise for Habanos to jump into the US market all at once.  What about their current distribution change.  Would they shortchange long standing relationships just for US?  Does Habanos risk introducing lower quality product to meet demand?  They tried this before.  Not worth the risk of loss of reputation just to make a quick buck.  They need to be careful.

Keep in mind, that in countries like Germany, Habanos is a minority percentage of all cigar sales.  There will be a lot of US cigar smokers that will prefer NC's for whatever reason.  The obvious would be strength, price, more consistent construction.  

I definitely think that if/when CCs make it to the US there will be an initial surge in demand, but that will level off. NC brands have had nearly half a century to develop a loyal customer base and I doubt that people will be jumping ship once the novelty wears off. Not to mention what the price of CC's will be once the government gets their piece of the action.


Sent from my iPhone using Tapatalk

[GasGuy82]

I wonder if we will see prices rise due to a bidding war for shelf space? Our family had a liquor store/market for 35 years that sold everything from cigarettes and Budweiser to Chateau Lafite and Chateau Yquem. At least when we were in business, the cigarette makers paid for the best shelf space. In the old days they paid in cold hard cash. Later on, when the government began frowning on that practice, it came in the form of free product each month. Will the NC brands sit idly by and let the Cubans get the prime space or will they buy the best space and use their shiny packaging to lure customers in?

 

BTW, does anyone know what the license cost and requirements are for an LCDH? I assume there is an initial price for the franchise and then a minimum purchase amount each year?

[Blakes]

With so many changes on the horizon, Cuba opening up it's economy, the seemingly now inevitable lifting of the US embargo, the resulting trade disputes, worldwide tobacco taxes/regulations.... Maybe HSA is itself at risk (not a bad thing imo) it just seems that soon there may be too many balls for it to juggle and it's only a matter of time, and the right price, before we see the brands being sold off separately, and new ones starting up as private companies like it once used to be pre-embargo. 

[SCgarman]

7 hours ago, Blakes said:

With so many changes on the horizon, Cuba opening up it's economy, the seemingly now inevitable lifting of the US embargo, the resulting trade disputes, worldwide tobacco taxes/regulations.... Maybe HSA is itself at risk (not a bad thing imo) it just seems that soon there may be too many balls for it to juggle and it's only a matter of time, and the right price, before we see the brands being sold off separately, and new ones starting up as private companies like it once used to be pre-embargo. 

You state "seemingly now inevitable lifting of the US embargo". As an American, I can say with confidence the embargo is not going anywhere anytime soon. We in the US have a new sheriff in town, and a Republican controlled congress that is not going to bow down to the Castro regime. I wish folks would stop assuming the embargo is ending soon. That is a bad assumption.

[Blakes]

27 minutes ago, NYgarman said:

You state "seemingly now inevitable lifting of the US embargo". As an American, I can say with confidence the embargo is not going anywhere anytime soon. We in the US have a new sheriff in town, and a Republican controlled congress that is not going to bow down to the Castro regime. I wish folks would stop assuming the embargo is ending soon. That is a bad assumption.

Maybe not anytime soon but eventually. Regardless of who's in office in the US Cuba is slowly opening up. After Raul Castro's day how much steam will the regime have left in it? One thing I'm pretty sure about is the US won't sit back whilst other countries, say China, pour investment in.

[SCgarman]

46 minutes ago, Blakes said:

Maybe not anytime soon but eventually. Regardless of who's in office in the US Cuba is slowly opening up. After Raul Castro's day how much steam will the regime have left in it? One thing I'm pretty sure about is the US won't sit back whilst other countries, say China, pour investment in.

I am sure Raul has family and loyalists to the revolution who will be there to carry on the status quo when he goes to meet his maker. The only way for real change in Cuba is for the people to rise up and revolt. And that is not going to happen, as long as they fear their government.

[Philc2001]

46 minutes ago, Blakes said:

Maybe not anytime soon but eventually. Regardless of who's in office in the US Cuba is slowly opening up. After Raul Castro's day how much steam will the regime have left in it? One thing I'm pretty sure about is the US won't sit back whilst other countries, say China, pour investment in.

Unfortunately, the embargo has been a failed policy for several decades. We could have determined that much sooner, within the first 5-10 years. The idea of starving out the Castro regime never panned out, and our government entities have been too stubborn and unwilling to accept that the policy is not working. The only thing the embargo achieved was to isolate and starve the common people of Cuba.

One Castro down, one to go, and the animosity continues. Legal matters aside, although they are quite huge, there is no hope that the embargo will ever achieve the desired outcome. Changing a government's behavior through isolation doesn't work, you can get much further through engagement and working together than you can through cutting them off and being hostile towards them - I don't intend to get political, so I'll simply say 5 decades of this embargo is enough to prove the policy is not working. Now the only question is whether to wait for the second Castro to pass, or not. 

As for foreign investment, well 5 decades of that have done little to develop the country simply because no investor in his or her right mind will invest without assurance of basic protection from what Castro did when he forcibly confiscated property and businesses and turned them into state owned. As long as the Cuban government continues to be hostile to independent business entities, nobody will take that risk. IF (BIG IF) the regime decides to allow private enterprise to happen in Cuba, and constitutionally swears to protect those interests, then things might change and investors may get interested. But I wouldn't hold breath on this happening even after the second Castro passes.

[SCgarman]

9 minutes ago, Philc2001 said:

Unfortunately, the embargo has been a failed policy for several decades. We could have determined that much sooner, within the first 5-10 years. The idea of starving out the Castro regime never panned out, and our government entities have been too stubborn and unwilling to accept that the policy is not working. The only thing the embargo achieved was to isolate and starve the common people of Cuba.

One Castro down, one to go, and the animosity continues. Legal matters aside, although they are quite huge, there is no hope that the embargo will ever achieve the desired outcome. Changing a government's behavior through isolation doesn't work, you can get much further through engagement and working together than you can through cutting them off and being hostile towards them - I don't intend to get political, so I'll simply say 5 decades of this embargo is enough to prove the policy is not working. Now the only question is whether to wait for the second Castro to pass, or not. 

As for foreign investment, well 5 decades of that have done little to develop the country simply because no investor in his or her right mind will invest without assurance of basic protection from what Castro did when he forcibly confiscated property and businesses and turned them into state owned. As long as the Cuban government continues to be hostile to independent business entities, nobody will take that risk. IF (BIG IF) the regime decides to allow private enterprise to happen in Cuba, and constitutionally swears to protect those interests, then things might change and investors may get interested. But I wouldn't hold breath on this happening even after the second Castro passes.

The embargo did not isolate or starve the Cuban people. The Cuban regime has! Remember, Cuba CAN trade with every country it wishes, except the USA. We are not the only developed nation on Earth. Do not blame Cuba's problems on the USA. That is a copout.

[planetary]

4 minutes ago, NYgarman said:

The embargo did not isolate or starve the Cuban people. The Cuban regime has! Remember, Cuba CAN trade with every country it wishes, except the USA. We are not the only developed nation on Earth. Do not blame Cuba's problems on the USA. That is a copout.

Don't forget the 1992 Helms-Burton act, which penalizes foreign businesses which trade with Cuba by preventing them from doing business in the US.  Our country attempted to economically wall-off Cuba to a fair degree.  Not saying that it's responsible for what happened there, but the US projected some economic power, here, and that caused indirect damage, too.

[Philc2001]

1 hour ago, NYgarman said:

The embargo did not isolate or starve the Cuban people. The Cuban regime has! Remember, Cuba CAN trade with every country it wishes, except the USA. We are not the only developed nation on Earth. Do not blame Cuba's problems on the USA. That is a copout.

I can see that perspective, and you are not wrong in your assessment. However, it was clear after the first 5-10 years that the embargo was not working, wouldn't work, and that it was having more detrimental effect on the people than it was on the government of Cuba. Certainly I can't blame the US for the Castro brutality and their ways, but at some point the US has contributed to the ongoing malaise and economic stress that has befallen the Cuban people. 

1 hour ago, planetary said:

Don't forget the 1992 Helms-Burton act, which penalizes foreign businesses which trade with Cuba by preventing them from doing business in the US.  Our country attempted to economically wall-off Cuba to a fair degree.  Not saying that it's responsible for what happened there, but the US projected some economic power, here, and that caused indirect damage, too.

Indeed. These actions tend to hurt the Cuban people more than the communist leadership. I have read arguments that these actions were intended to motivate the people to rise against the government, but in practice it has actually been counterproductive. Without some assurances or support from the US they would just get slaughtered. This is an extension of the same failed policy that has outlived its usefulness and failed to produce the desired outcome. These policies are far removed from the policies the US has used in dealing with China, the largest communist entity in the world.

[raymond5737]

On 2/10/2017 at 0:51 PM, JR Kipling said:

 

To me, it makes a difference as to whether I'm likely to try an NC or not. I like simplicity, I don't like gaudy. I'm suspicious if a maker goes overboard on bands & boxes. "Why are they trying so hard ?" is a thought that comes to me.


Sent from my iPhone using Tapatalk Pro

Some Cuban bands are very simple and will probably remain simple due to tradition and lack of competition. This is exactly the opposite within the Non-Cuban world... Tons of competition and new cigar brands, sizes, shapes and flavors coming every day. In the NC world, diversity seems to be king. And just as it is selling any competitive products, initially you may have to draw attention with good advertising and lots of bling. But in the end, it's all about the consistent quality of the smoke.

[Jersey Devil]

To me bling is a turnoff. When I buy NCs from a B&M I like the Tats and Illusione, etc, for their smaller ring gauges, visual simplicity, lack of cellophane, good construction and double or triple caps. I don't want a cigar the size of a horse-appendage in my mouth, either, or something so strong I need to lie down for an hour afterwards. Simple bands, simple boxen, well-constructed sticks that fit my face comfortably and I'm happy.

With regards to the Cuban puro eventually coming to these shores, I doubt we'll see it in our lifetimes for two huge reasons. One is political. As another BoTL upthread referenced, the new administration isn't so ready to cozy up to the Castro government or any who would follow him when Raul assumes room temperature. But it's even more than that. The embargo can only be rescinded by Congress, and you'll never get a Congressman from Florida or any tobacco-producing state to sign off on it. Remember, they are  re-elected every two years and it would be political suicide for them to vote against the embargo, vote against their state's best interest, vote to appease a communist country, etc. Not in these times almost certainly.

BUT. There's an 800 pound gorilla in the room that nobody is talking about, and it's a far bigger threat to the CC puro in America than any politician.

Let's say the embargo falls on January 1st 2018, for the sake of argument, and there's a comprehensive trade agreement in place. At 12:01am on New Years Day, every scrap of Cuban tobacco will be bailed up and on its way to Nicaragua, Costa Rica, Honduras and the Dominican Republic to be blended with their best tobaccos. The Padrons and Garcias and Johnsons and Rubins will buy up every scrap they can find just to say they have "only the finest and rarest Cuban tobacco, blended with our own legendary Nicaraguan/etc that has made the <fill-in-the-blank> name a legend for the last 50 years. Any boxes of Monte 2s or CoEs/CoLa in the retail pipeline will suddenly triple or quadruple in price, or be snatched up by wealthy buyers in the middle east, by the plane-load, overnight. That's a scenario I am dreading far more than the US political climate at any given time.

Look at what's happened just since last October, when personal importation became legal for any quantity. Stock has plummeted at many online retailers, some having to resort to focusing on NC brands because they just can't get the most in-demand CCs that used to always be available online. I believe this is a shot across the bow for what will happen when they are legal.