Andorran tobacconists sell fewer Havana cigars

[Corylax18]

4 hours ago, El Presidente said:

Agree to disagree. 

Lucky you missed the incessant bus tours from "white" cruise ships decending on the LCDH Divans! Not a peep from anyone. 

You seem to be confusing causation with correlation. 

We both know and respect a guy who has just come back this week from talking to approximately 40 Spanish retailers. 

When he was there in Spain in November, to retailers  it was all about "Blame the Chinese".  Fast forward to July 2022 and  the retailers are all blaming PRODUCTION. 

Why? Because it can't be hidden any longer. Retailers/distributors have had access to Havana since January/February  2022 and are seeing the empty warehouse, the empty benches and the complete mess for themselves. 

PCC and Infifon (Asia and China distributors) have no stockpile of cigars. They are in the same postion as Tabacalera, 5th or H&F. 

Cheap Euro stock to the US traditionally went out by the box/online.  The problem with cheap Euro stock to China wasn't the "walk in" buyer. It is the cheap stock that  went out by the goods pallet via professional operations. Very different operations. 

The Chinese market has grown to rival the  US.  This has happened. in the past 10 years. 

Production is down to 30% of 10 years ago. 

SUPPLY/PRODUCTION cannot meet DEMAND and will not be in a position to do so for many years to come, if ever. 

There is no need to look for a bogeyman. What is going on is primarily a response to the structural change in the market. 

Again, agree to disagree.

You just listed a Myriad of Issues, thats kind of the point I'm trying to make. The Chinese in general and the new JV in particular are not the Only issue driving what we're seeing, but they are a large driver/cause of the structural shift you mention. 

The Conde Villanueva always seemed well stocked and it was a stones throw from the cruise port. Most Carnival Cruisers spending $499 on an 8 night cruise, with a 6 hour stop in Havana aren't typically purchasing $1000s worth of cigars. (Im sure it happened though, like, at least once) These people are more concerned about how to maximize the amount of alcohol they can sneak onto the ship in sun tan lotion containers. 

I walked through both La Corona and El Laquito in March, Im hoping to hit both again next week. Both were at maybe 50/60% floor capacity then and it sounds like the number is still similar. a 70% reduction seems like a stretch to me. The leaf was there, the facilities where there and you have hungry, literally hungry, rollers who couldn't work and where cut off from their real, actual income (black market cigars) for almost a year. I know some people left, I know production dropped significantly, but I don't personally know anything that supports a 70% drop in production. Cigars are not hard to find in Cuba, like at all. In huge quantities at very reasonable prices. If you have a plane, and a buyer let me know. I can fill it and fly it. The major disconnect seems to be somewhere in the middle. I dont see how HSA burning every bridge they have with distributors is going to make the problems any better, but we're going to find out.  

Add up the 30% increase in consumption from the Chinese and say a 10-15% spike for Covid so we're looking at, what, roughly 140% demand over peak supply? With Supply well of peak, its obviously not a good equation. I mentioned it like 2 weeks ago but its becoming clearer every day. There is no active plan to increase production, there is however a plan(in motion) to DRASTICALLY reduce demand to meet the lower supply levels. I've never seen "drastically reduce sales volumes" work for a company, especially while they burn their distributors in the process, but I'm surprised every day. 

5 hours ago, El Presidente said:

For anyone following the news, you would know that the HSA JV partners have their own challenges with a Director being arrested in China in December last year. 

He outlived the value of his bribes. Nothing less, nothing more. It happens over there everyday, his assets will be "redistributed" and another pawn lined up. I dont hold it against the JV for playing by their countries rules. 

[Hoepssa]

 

Chinese flippers even buy cigars in Taipei now, they know prices in Taipei are better (than HK), they buy everything Cohiba/Trinidad like what I saw

in Europe before pandemic era.

 

[Shrimpchips]

19 minutes ago, Corylax18 said:

You just listed a Myriad of Issues, thats kind of the point I'm trying to make. The Chinese in general and the new JV in particular are not the Only issue driving what we're seeing, but they are a large driver/cause of the structural shift you mention. 

The Conde Villanueva always seemed well stocked and it was a stones throw from the cruise port. Most Carnival Cruisers spending $499 on an 8 night cruise, with a 6 hour stop in Havana aren't typically purchasing $1000s worth of cigars. (Im sure it happened though, like, at least once) These people are more concerned about how to maximize the amount of alcohol they can sneak onto the ship in sun tan lotion containers. 

I walked through both La Corona and El Laquito in March, Im hoping to hit both again next week. Both were at maybe 50/60% floor capacity then and it sounds like the number is still similar. a 70% reduction seems like a stretch to me. The leaf was there, the facilities where there and you have hungry, literally hungry, rollers who couldn't work and where cut off from their real, actual income (black market cigars) for almost a year. I know some people left, I know production dropped significantly, but I don't personally know anything that supports a 70% drop in production. Cigars are not hard to find in Cuba, like at all. In huge quantities at very reasonable prices. If you have a plane, and a buyer let me know. I can fill it and fly it. The major disconnect seems to be somewhere in the middle. I dont see how HSA burning every bridge they have with distributors is going to make the problems any better, but we're going to find out.  

Add up the 30% increase in consumption from the Chinese and say a 10-15% spike for Covid so we're looking at, what, roughly 140% demand over peak supply? With Supply well of peak, its obviously not a good equation. I mentioned it like 2 weeks ago but its becoming clearer every day. There is no active plan to increase production, there is however a plan(in motion) to DRASTICALLY reduce demand to meet the lower supply levels. I've never seen "drastically reduce sales volumes" work for a company, especially while they burn their distributors in the process, but I'm surprised every day. 

He outlived the value of his bribes. Nothing less, nothing more. It happens over there everyday, his assets will be "redistributed" and another pawn lined up. I dont hold it against the JV for playing by their countries rules. 

I’m not doubting what you’re seeing on the ground at Partagas and La Corona factories, but based on the box codes that are filtering through here and other retailers on other continents, TUA and RAT production seems like it carried on through the pandemic at enough of a level where we didn’t notice them falling off completely.  My guess would be that if those Havana factories are barely maintaining 60% production, provincial factories probably dropped below critical staffing levels to even operate so they may have gone to zero production.  While I don’t doubt the ground zero observations, being a wholesaler/retailer with industry plugs on multiple continental distributors, as well as having his shop depend on the knowledge of the current market and supply, I’d assume @El Presidente is better placed here to comment on the overall market outlook.  And either way, even if the factories were maintaining production, if HSA is screwing up global distribution to the point that PCC and Infifon can’t fill their shelves, then the situation is still a global supply crunch solely at the control of HSA.

[Corylax18]

1 hour ago, Shrimpchips said:

I’m not doubting what you’re seeing on the ground at Partagas and La Corona factories, but based on the box codes that are filtering through here and other retailers on other continents, TUA and RAT production seems like it carried on through the pandemic at enough of a level where we didn’t notice them falling off completely.  My guess would be that if those Havana factories are barely maintaining 60% production, provincial factories probably dropped below critical staffing levels to even operate so they may have gone to zero production.  While I don’t doubt the ground zero observations, being a wholesaler/retailer with industry plugs on multiple continental distributors, as well as having his shop depend on the knowledge of the current market and supply, I’d assume @El Presidente is better placed here to comment on the overall market outlook.  And either way, even if the factories were maintaining production, if HSA is screwing up global distribution to the point that PCC and Infifon can’t fill their shelves, then the situation is still a global supply crunch solely at the control of HSA.

I think Rob and I are in near lock step on the market outlook. Much higher prices and much lower production for the foreseeable future. There isn't really anything to debate there.

We could spend all day debating whether it's a 30%, 50%, or 70% decrease in production, but even Tabacuba doesn't really know, so we're all just sharing opinions, our own or someone elses. 

I think there is plenty of discussion to be had on how we got here and why things got so bad. 

Fransisco Donatien looked pretty sleepy in March. But they're even closer to the farms, stripping houses and curing/storage facilities, so it seems like their would be fewer logistical obstacles there, not more. It does make sense that factories way out east would have struggled more to stay up and running. 

Don't Forget, Infifon is HSA, at least 50% of it. Once the cigars hit their warehouse in Havana its their job to distribute and market them internationally. 

[Fuzz]

Rise up my yellow brothers and sisters! Stop the white peril from taking away your enjoyment of cigars!! Buy all that you see, take all that you want!!! We out number the bastards!!

 

[El Presidente]

I don't think Cory and I are too far apart on this and if we are it is no big dilemma. 

1. Forget Cuba supply if you can. Refer specifically to the pictures posted this month of Spain//France/global divans. There is bugger all there.

2. Dave and the guys in Havana today .there is no "Nirvana".  Mother Hubbard's cupboard is largely empty. 

This is 100% a production issue.  They have made decisions on that fact. I don't agree with them and I (nor you) can change that fact. 

It is not a "Yellow Peril" issue. It is a supply issue. How do they retain revenue (net) with decreased production. 

If you as a business owner where to "peg your price" to a market?  where would you peg it? Simply to the market where the arbitrage market was targeted. That is HK/China. 

I understand the angst. 

I struggle with non supportive arguments. Provide facts./pictures/docs. 

It is indeed a new world in the Habanos landscape.  See how it pans out over the next 6 months. 

 

 

 

 

[KnightsAnole]

3 hours ago, Fuzz said:

Rise up my yellow brothers and sisters! Stop the white peril from taking away your enjoyment of cigars!! Buy all that you see, take all that you want!!! We out number the bastards!!

 

No reason to rise up, at that price, you can have em.

 

😆

[Salomones]

6 hours ago, Shrimpchips said:

I’m not doubting what you’re seeing on the ground at Partagas and La Corona factories, but based on the box codes that are filtering through here and other retailers on other continents, TUA and RAT production seems like it carried on through the pandemic at enough of a level where we didn’t notice them falling off completely.  My guess would be that if those Havana factories are barely maintaining 60% production, provincial factories probably dropped below critical staffing levels to even operate so they may have gone to zero production.  While I don’t doubt the ground zero observations, being a wholesaler/retailer with industry plugs on multiple continental distributors, as well as having his shop depend on the knowledge of the current market and supply, I’d assume @El Presidente is better placed here to comment on the overall market outlook.  And either way, even if the factories were maintaining production, if HSA is screwing up global distribution to the point that PCC and Infifon can’t fill their shelves, then the situation is still a global supply crunch solely at the control of HSA.

the box code only indicates where they were packed. not necessarily where they were made.

Given the lack of personnel, it also makes sense not to have a sorter and packer in every provincial factory, but to centralize it.

[Salomones]

I am nearly every year in the Factory of Holguin. Since two years now they are in 100% Lockdown. So far I know, they produced between 10-15% of all Premium Cigars in Cuba. So this amount is missing. And that's just one Province factory I know.

[Fugu]

13 hours ago, Hoepssa said:

they buy everything Cohiba/Trinidad like what I saw

in Europe before pandemic era.

I can attest to it from personal experience. They were snagging up boxes I was planning to buy in my local B&M a few years back. When I asked the shop owner for some boxes that I knew he was holding in stock the other week, and of a few cigars of their stock that I had been trying/tasting before (like I would often do), he regretfully declined and pointed me towards a pile of boxes held in a corner of the humi, reserved for some Chinese tourists (note: I am a long, long-term patron there, spanning >three decades and counting....). He just shrugged and said he would even get calls from China asking for info on stock and for sending pics (which he declined), and announcing “mules” that would do the local arrangement (it is a rather small to medium-sized B&M without webshop!).

This simply is fact. And it is a considerable amount that has been cleared from shelves that way. But keeping it in perspective, those „tourists“ had and have the very same right to buy as I do. They just were quicker! Nothing to do with “racism“, more with “nationality”, “means” and a certain country‘s development. A sober description of a situation.

At current, European shelves are empty (see Elliot’s latest pics from his Spain vacation - symptomatic!). I’d be happy if here, we’d only see a quarter the selection of what Rob has to offer! It seems to me like at the moment, a major chunk of current production is diverted to PCC and Infifon. I could be wrong but that is my impression from overlooking the current market situation.

[El Presidente]

1 hour ago, Fugu said:

  But keeping it in perspective, those „tourists“ had and have the very same right to buy as I do. 

Dead set bingo.

3 years ago members going to Cuba were complaining about (and rightly so) of mastercases of Behike and Cuban regionals set aside by Havana LCDH  for European retailers. Many here remember those mastercases set aside for X and Y retailer out of UK and Geneva. It was fair game...albeit distasteful.

That is unlikely to  happen again (legit channels) as there is little benefit.

God forbid those mastercases were set aside for  "wang" or "li" today. We would never hear the end of it.

 

[PuroDiario]

We used to go to Pas de Lacasa, Grau Roig, El Tarter, etc to ski growing up and later on with group of friends from university every year. 
 

incredible memories running wild in Andorra la Vella with friends buying boxes for our parents and grand parents and so, I was the “entendido” jaja ridiculous  

[helix]

Cuban government couldn't care less as long as someone is willing to pay . Production problems are to hard to fix , easy solution is higher prices . Kind of how they run the whole country.

[KnightsAnole]

11 hours ago, El Presidente said:

God forbid those mastercases were set aside for  "wang" or "li" today. We would never hear the end of it.

Doubtful. People were pissed because they couldn’t  by what they wanted too while looking at the boxes in the corner, whether it was Wang or H&F, I doubt would have made a difference to most. Might try losing the racism angle here Pres, it’s really not the issue.

[Monterey]

It's interesting on who we choose to blame.

I went to Havana often when we could legally bring boxes from the island.  4% tax over 4 boxes made is so that I would stock up on every trip.  One time coming back with 36 boxes (picture posted in "Show you Cuban Cigar Haul" thread..  Each time I would go I would hit up every LCDH buying like a crazy man.  I never once saw anything other than white guys from the US doing the same thing.  Seems hypocritical for me to get mad at anyone else doing what I do, regardless of race.

[AirOne]

16 hours ago, El Presidente said:

 See how it pans out over the next 6 months. 

Exactly. Things have changed so drastically in just 2 weeks here in France (from dead nothing to much better supply since the new price are on) that we need time to get a clearer picture.

 

 

[frenchkiwi]

15 hours ago, Salomones said:

I am nearly every year in the Factory of Holguin. Since two years now they are in 100% Lockdown. So far I know, they produced between 10-15% of all Premium Cigars in Cuba. So this amount is missing. And that's just one Province factory I know.

I haven't been following so bear with me good people but is this the number one reason for recent drop in supply for Habanos SA - Covid & personnel related issues? (exacerbating existing issues no doubt). 

As opposed to climate change and hurricanes mismanagement and the "good old" reasons?

[El Presidente]

17 minutes ago, frenchkiwi said:

I haven't been following so bear with me good people but is this the number one reason for recent drop in supply for Habanos SA - Covid & personnel related issues? (exacerbating existing issues no doubt). 

As opposed to climate change and hurricanes mismanagement and the "good old" reasons?

Covid came 

Tourists stopped coming

Cigars sales boomed worldwide. Warehouses emptied. 

Factories closed 

Factories opened after a few months  but at reduced capacity (distancing). Female rollers/staff stayed home to look after children (schools closed), elderly parents. 

MCL cards and dollar stores. 

Food/fuel/freedom shortage

July 2021 riots

Mass exodus of Cubans from that time. Estimated between 200K and 300K to this point. 

Still no tourists. State more bankrupt than usual. No dinero

Roller/personnel shortage.  Brain drain. 

 

 

 

[KnightsAnole]

10 hours ago, Monterey said:

It's interesting on who we choose to blame.

I went to Havana often when we could legally bring boxes from the island.  4% tax over 4 boxes made is so that I would stock up on every trip.  One time coming back with 36 boxes (picture posted in "Show you Cuban Cigar Haul" thread..  Each time I would go I would hit up every LCDH buying like a crazy man.  I never once saw anything other than white guys from the US doing the same thing.  Seems hypocritical for me to get mad at anyone else doing what I do, regardless of race.

Yep, I remember those days, and I remember the Canadians complaining about all the yanks cleaning out shelves, pretty sure it wasn’t racism.

[JohnnyO]

I'm having trouble with this "busloads of yanks" theory. Cuba is my backyard, I'm in and out constantly. Never saw those busloads. When we return to the states, US passport holders go into a separate line than residents/tourists. There's usually 4-5 US passport holders and 300 residents/tourists. 2-3 of those US passport holders also have a Cuban passport. So where are these yanks hiding, in the basement of the Alamo? Second having trouble with the stats provided. Traditionally Cuba's statistics are full of fiction. I will point to death per/1000 under the age of 15. In the Caribbean it is in the mid to high 20's. Cuba says it is less than the US (6) and most of Europe. So we have to determine where the BS ends and the straight lies begin. If your 30% is 50% lies, whats the real number? I'm just sayin'. John

[El Presidente]

11 hours ago, JohnnyO said:

I'm having trouble with this "busloads of yanks" theory. Cuba is my backyard, I'm in and out constantly. Never saw those busloads.

All part ot the Havana 1/2 day shore tour for the docked cruise ships. There were the full day tours to Pinar as well. 

Partagas factory was the second last stop  before Floridita...and then a stroll down to the plaza for a bus group lunch and music. 

Nothing wrong with it. 

[frenchkiwi]

On 7/14/2022 at 12:33 PM, El Presidente said:

Covid came 

Tourists stopped coming

 

Thanks for the rundown Pres. Sounds like buying habanos where possible and getting down on knees to pray are the only way for us overseas punters to help find a way out of this one. (barring training our kids to roll puros and shipping'em across to Cuba as cheap labour ... there's an idea...)

[El Presidente]

7 minutes ago, frenchkiwi said:

Thanks for the rundown Pres. Sounds like buying habanos where possible and getting down on knees to pray are the only way for us overseas punters to help find a way out of this one. (barring training our kids to roll puros and shipping'em across to Cuba as cheap labour ... there's an idea...)

We should technically be through the worst of it. 

Whether it is us or our comrades in EU/Asia, as retailers we are still seeing only about 30% of what we were seeing in 2019. That may be 40% next month and building progressively or it may remain a complete CF. 

It will be a long climb back for Tabacuba/HSA. I am assuming they will find a way. 

I am not fussed if they can't .

[JohnnyO]

On 7/15/2022 at 6:05 AM, El Presidente said:

All part ot the Havana 1/2 day shore tour for the docked cruise ships. There were the full day tours to Pinar as well. 

Partagas factory was the second last stop  before Floridita...and then a stroll down to the plaza for a bus group lunch and music. 

Nothing wrong with it. 

You are referring to a very short time frame, maybe 1-2 years at best and I only see two buses for two cruise ships. Not the "busloads" I was imagining. John

[cookj1]

On 7/14/2022 at 1:05 PM, El Presidente said:

All part ot the Havana 1/2 day shore tour for the docked cruise ships. There were the full day tours to Pinar as well. 

Partagas factory was the second last stop  before Floridita...and then a stroll down to the plaza for a bus group lunch and music. 

Nothing wrong with it. 

I can confirm this.  I was at the Hotel Nacional in March 2016.  It just so happened that the Stones and Obama were there when I was, including a few cruise ships.  The LCDH was absolutely flooded with Yanks and they were buying everything they could, even though the majority of them had no clue what they were buying.  I helped a couple from Chicago pick a few boxes of cigars.  It’s not a myth; it’s fact.  
 

When you go there, what else is there to buy?  Coffee, rum, cigars, perhaps some art?  There really isn’t anything else.  Sure, you can buy some trinkets and sh*t, but tourists are buying hundreds (if not thousands) of dollars worth of cigars.  You’d be hard pressed to spend that much on anything else in Cuba.