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WHY NOT USE CUBAN TOBACCO? |
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Los Angeles, May 7 – We get a lot of messages and questions and this one we needed to answer right away. Reader Tim M. writes:
I have a thought/question about the article dealing with what will happen if the Cuban embargo ends. It says that the big demand will be for Cuban tobacco rather than Cuban cigars themselves, and that factories in the Dominican Republic, Honduras and elsewhere will be using Cuban tobacco to produce their cigars for the American market. The article implies that these producers in other countries aren't already using Cuban-grown tobacco, but why would that be?
Can't they use it for cigars sold in the European and Asian markets? Or is it that the American market is so big that it dictates the profitability of using Cuban leaves at all? It seems weird that all Cuban tobacco would be exported only in the form of completed cigars – are they perhaps not growing enough for there to be a surplus to export as leaves only? Why would they boost production enough for a surplus only if the American market opened up?
Tim, thanks for your question, most of which you answered – correctly – for yourself! But here are some additional details.
In fact, the major producers of cigars in the Dominican Republic, Honduras and Nicaragua do not use Cuban leaf in their blends today, even though they could for sales in countries other than the U.S. There are good reasons for this. If such producers used Cuban leaf in cigars sold in Great Britain, for example, what would the position of U.S. Customs be for cigars shipped to the U.S. from England? And if such cigars were made under the same brand name as cigars made for the U.S., would there be trouble with American customs to allow any of these cigars into the U.S. at all? Would U.S. Customs force the manufacturer to prove that Cuban leaf wasn’t in their cigars? It’s too much trouble to bother with . . . for the most part.
Consider the relative market sizes. The U.S. premium cigar market is from 300-330 million cigars sold annually. Habanos, S.A. claims an 85 percent market share in the worldwide premium cigar market, excluding the U.S., and although they don’t give a specific figure, it’s believed that Cuba produces about 160 million cigars a year for export. If true, that would make the worldwide premium market – outside the U.S. – only about 190 million cigars a year. Which market would you rather play in?
Further, there is a market in Cuban leaf which is not used for Havana cigars. It’s blended into cigarettes and some leaf is sold to European cigar makers such as Villiger, which has specific brands which it sells in Europe that contain – and proudly advertise that they contain – Cuban tobacco. But there isn’t that much and with so much pressure to create finished cigars for the hard currency it brings, there certainly isn’t enough for wide usage by the large premium cigar makers outside of Cuba.
Veteran cigar blenders know that there are specific flavors and burning characteristics in Cuban leaf which they could use to create new cigars, combined with the leaves they have available now from the U.S., Cameroon, Ecuador, Mexico, Peru, Honduras, Nicaragua, the Dominican Republic, Brazil and elsewhere. And they are eager to do so, once they can legally acquire Cuban leaf.
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