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| WHAT TO LOOK FOR IN 2008 |
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Page 1 of 2  Plus: our Register & Win winner of the week!Los Angeles, January 1 – A turbulent year for smokers in 2007 will be even more challenging in 2008 in a Presidential election year. Some of the stories we are watching for in the new year include: Altadis, S.A. will be swallowed by Imperial Tobacco in January and other large cigar makers will be in play. Citi Investment Research analyst Bonnie Herzog is already predicting that Reynolds American will buy machine-made giant Swisher International and Altria (Philip Morris), fresh off buying John Middleton (Black & Mild) may have its eye on the handmade market. Two companies – Swedish Match and Davidoff of Geneva – offer annual sales revenues of $2 billion or more and do not have cigarettes as part of their portfolios. Could they be the next targets? And will some outside group, perhaps a venture-capital entity, cobble together a new mega-producer by buying up some of the next tier of cigar makers like Perdomo (Nicaragua), Rocky Patel Premium (Honduras) and MATASA (Dominican Republic)? Just asking . . . Smokers will be attacked from all sides in 2008, but especially in the U.S. Congress. >> Congressional Democrats will continue to play politics with the State Children’s Health Insurance Program (SCHIP) and will attempt at least once to override a certain veto by President George W. Bush of any plan to fund their scheme with tobacco taxes. >> Democrats will pass a bill, likely to be vetoed by Bush, to give “control” of tobacco to the U.S. Food and Drug Administration. While meant to control cigarettes, this bill could have grave consequences for cigar sales in the U.S. November state initiatives will likely include a poorly-designed plan to provide universal health insurance for Californians by, among other taxes, raising per-pack cigarette taxes by $1.75 and likely increasing cigar taxes at the same time to perhaps 135% of the wholesale price. That would take a cigar purchased by a dealer from a manufacturer for $1 and increasing its likely retail price from $2 before taxes to $3.35 or even $4.70 after tobacco (but not sales) taxes are added! As smoking bans continue to be passed (Illinois adopted theirs today) that exempt only retail tobacco stores and sometimes cigar bars, watch for retail shops to expand to allow more in-store smoking or new shops to be opened adjacent to existing or new restaurants. The concept will be to enjoy your meals in the restaurant and then finish the afternoon or evening with a cigar next door. In some locales which do not define “cigar bars” but rather legislate “tobacco bars,” watch for cigarette bars to spring up similar to the R.J. Reynolds-owned Marshall McGearty’s cigarette bar in Chicago. Surveys show that consumers want more cigars to be offered in tubes so that can be taken in safety for use after meals. Look for manufacturers to provide more cigars in small packs of 3-5 cigars each as Ashton and Davidoff, to name two, do now. |
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Did you know?
“"Sandwich" filler includes both long and short pieces, with the long pieces folded over to form the "sandwich."
