PCA bun fight

[El Presidente]

I haven't been following it too closely but for those within the industry, fill us in as to why some major players are pulling out of  July's Premium Cigar Association Trade Show in Vegas.

From an outsider looking in, one of the strengths of the US cigar industry has been been the cohesiveness of the cigar business community at almost all tiers. 

[Diabolicalpherpher]

https://www.famous-smoke.com/cigaradvisor/open-letter-to-the-cigar-industry-the-lie-about-internet-cigar-sellers

https://cigardojo.com/2020/01/famous-smoke-shop-owner-arthur-zaretsky-writes-open-letter-regarding-pca/

[Wookie]

I think one issue is that the B&Ms control the tradeshow. But the Mfrs fund the lion's share of it with little to no say in the process. Add to that the fact that retailers no longer rely on the big discounts they used to get during this convention....means they no longer are required to attend to get their best discounts from Mfrs. Seems like the convention is in a no man's land trying to define what its role is going forward.

[kalibratecuba]

Halfway had a series of good stories on it. It boils down to the companies bailing because they weren't provided with anything that justified continuing to hand money over to them.

The companies had no voice in the legislative actions of the organization. The poor planning and turnout at the tradeshow.

The brands that bailed tried to work with them but did not get any concessions.

Drama!

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[Cayman17]

I thought they were upset that non industry civilians were going to be allowed to attend?  

[SenorPerfecto]

The PCA/IPCPR is a cheap, badly run organization that was not making anyone happy. They basically have 1 job, which is to put on a trade show each year, and attendance kept dropping and their response was to do a consumer day where regular people could come in, but they had NO PLAN of how to actually make it happen, so they ended up cancelling that, and replacing it with... nothing! So after announcing their boondoggle to fix the show, then rolling that back, they were in the same place they started, with another show looming in 6 months, and the 4 biggest exhibitors -- Davidoff, General, Altadis and Drew Estates -- said screw this.

 

NOW... what's a "bun fight"!!

 

...oh yeah, and one way the PCA didn't make everyone happy was that they *apparently* took the side of the brick and mortar retailers by using their (meager?) organizational ability to work FOR a tax on online sales, which would theoretically level the playing field some, making online cigar prices somewhat less discounted compared to B&M's who have to charge customers sales tax. This realllly pissed off the online sellers, who claim that they are the friend of the B&Ms and not the enemy (but this is definitely not true -- at least as far as B&M owners are concerned -- the one thing B&M owners hate most is how cheaply smokers can buy online compared to what a store owner has to charge). All kinds of ruffled feathers, and no real leadership from the PCA. Shocker.

[LLC]

Trade shows in all industry’s including very large shows are having a hard time getting manufactures to attend. They continue to decline so adding things like a consumer day for those shows that typically didn’t do that are a desperate move to try and stay relevant.

Fewer companies attend these shows because of cost cutting and reduced staff due to tough market conditions so manufactures see less reason to pay the very high cost of doing them.



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[SCgarman]

1 hour ago, SenorPerfecto said:

...oh yeah, and one way the PCA didn't make everyone happy was that they *apparently* took the side of the brick and mortar retailers by using their (meager?) organizational ability to work FOR a tax on online sales, which would theoretically level the playing field some, making online cigar prices somewhat less discounted compared to B&M's who have to charge customers sales tax. This realllly pissed off the online sellers, who claim that they are the friend of the B&Ms and not the enemy (but this is definitely not true -- at least as far as B&M owners are concerned -- the one thing B&M owners hate most is how cheaply smokers can buy online compared to what a store owner has to charge). All kinds of ruffled feathers, and no real leadership from the PCA. Shocker.

The owner of Famous Smoke Shop explained it perfectly in his written explanation from the post above. I can fully empathize with his position.  This trade show will likely be dead soon.

[Cigar Surgeon]

Here's a very good article Charlie wrote about it: https://halfwheel.com/pca-2020-the-reckoning-is-here/370981/

Here's a very good article Coop wrote about it: https://cigar-coop.com/2020/01/feature-story-analysis-of-the-big-four-pulling-out-of-the-pca-trade-show.html

As someone who has been in the cigar media for a long time now, and has been covering the trade show for a long time, my take is this:

The tradeshow has been declining for years. The root problem (that no one seems to want to talk about) is that retailer attendance is down and continues to decline. Originally one of the main reasons retailers attended the show was to get 'show specials' for their orders. Unfortunately that went away as manufacturers started giving away the deals to their customers which prompted retailers to stay home for the show. 

Unfortunately the PCA / IPCPR wasn't able to come up with more dynamic ideas, other than various lunch and learn or training sessions, that has moved the dial in a positive direction.

The 'Big 4' pulling out of the tradeshow was due to a number of factors, but I suspect we'll see some if not all of them back in 2021 if only in reduced footprint. 

[SenorPerfecto]

I suspect the departure of the 4 conspirators will give them leverage over changes in 2021, and they'll be back. The question is, what will PCA be in 2021? Maybe a looooot different than it is now.

[Habana Mike]

On 1/28/2020 at 8:43 PM, SenorPerfecto said:

NOW... what's a "bun fight"!!

Not a tea party! https://english.stackexchange.com/questions/351211/what-is-the-origin-of-bunfight-and-how-has-the-term-evolved

And shame to see what the impact may be to the industry as a whole....

[El Presidente]

On 1/29/2020 at 11:43 AM, SenorPerfecto said:

NOW... what's a "bun fight"!!

a barney 

 

10 minutes ago, Habana Mike said:

And shame to see what the impact may be to the industry as a whole....

Amen.  

I didn't think things were going so well that they had time on their hands for an internal bust up. 

[Cigar Surgeon]

14 hours ago, El Presidente said:

Amen.  

I didn't think things were going so well that they had time on their hands for an internal bust up. 

Sadly I've come to realize that the average retailer in the US is woefully out of touch and also doesn't care what's happening in the industry as a whole.

[Corylax18]

11 minutes ago, Cigar Surgeon said:

Sadly I've come to realize that the average retailer in the US is woefully out of touch and also doesn't care what's happening in the industry as a whole.

I dont think this can be overstated enough.

I've been frequenting the same few B&Ms in Denver for about 15 years now. Most of them have always felt like time capsules (not in positive way) Some of them no longer exist, others are still bouncing along the bottom. 

There are a couple shops, including my favorite, that have worked very hard to stay current and find other sources of revenue. They hold regular cigar and whisky tastings, as well as other events that are, at best, tangential to cigars, but still draw a crowd. I think its similar to other areas of business, but the regulatory and tax environment around cigars really shrinks a cigar business owners margin of error. 

[Cigar Surgeon]

1 minute ago, Corylax18 said:

I dont think this can be overstated enough.

I've been frequenting the same few B&Ms in Denver for about 15 years now. Most of them have always felt like time capsules (not in positive way) Some of them no longer exist, others are still bouncing along the bottom. 

There are a couple shops, including my favorite, that have worked very hard to stay current and find other sources of revenue. They hold regular cigar and whisky tastings, as well as other events that are, at best, tangential to cigars, but still draw a crowd. I think its similar to other areas of business, but the regulatory and tax environment around cigars really shrinks a cigar business owners margin of error. 

I think you hit the nail on the head. I mean sadly a lot of people get into B&M ownership because they enjoy cigars, not because they've given any serious consideration to a business plan.

When I started finding out how many B&Ms out there don't even have a point of sale system I was flabbergasted. Like hey buddy the reason you're losing business has nothing to do with online retailers selling for cheaper, I assure you.