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I WANT THAT HUMIDOR IN THE WINDOW! |
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 Reports show cigar sales continue roaring ahead
Los Angeles, October 27 – Remember Mr. McGuire’s advice given to a young Dustin Hoffman, playing Benjamin Braddock in 1967's “The Graduate”?
“Plastics.”
McGuire - played by Walter Brooke - wouldn’t be surprised that a simple plastic jar fetched a remarkable $655 last week on eBay . . . from 1920s Cuba.
The collectible on auction was a rare, light-brown Partagas Humijar made of bakelite, the first widely-used plastic for commercial purposes. Invented by Leo Baekeland in 1907, bakelite was strong and so easily manipulated that it became instantly popular during the Jazz Age for all kinds of uses, including jars for cigars.
This particular model was a little over six inches in diameter and 6 3/4 inches in height and included a cedar lining and a screw-on top with a sponge holder inside (even then the Cubans were concerned with humidity!). Offered by a dealer in Florida, the item sold to a collector for the opening bid of $655.
An even rarer Ramon Allones bakelite Humijar from the same period sold in March for more at $737.72, but was in near-pristine condition where the Partagas model sold last week has some easily-spotted exterior and interior wear.
Strong cigar imports continue in August:
The Cigar Association of America’s import report for August 2004 paints a positive picture for cigars as import totals continue to rise, fed by rising sales (see below).
For August, imports of premium cigars totaled 28.1 million compared to 23.8 last year for a startling year-over-year gain of 18.15%! It’s the ninth straight month in which imports have increased over the previous year’s total and imports have risen for 10 of the last 11 months.
For the eight months ended in August, imports were up for the year by a staggering 17.15% to 190.8 million. If we project this rate of increase for the entire year, imports for 2004 will reach a sensational 324.1 million, the most since the last “Boom” year of 1998 (334.6 million). In fact, if imports do reach 324.1 million, it will be the most for any year except for the two-year explosion in 1997 (a record 417.8 million)and 1998.
Distributors aren’t sitting on their inventories, either. Swedish Match, which owns General Cigar, Villazon & Co., El Credito Cigars and recently took over U.S. Cigar Sales, reported sharply higher sales and profits. Their overall cigar sales volume grew by seven percent for the first nine months of 2004 and their cigar-sector profits increased by 29%!
“In the U.S., volumes for mass-market cigars increased driven by a number of successful new product launches as well as a growing market,” said the Swedish Match financial report released yesterday. “Sales also increased considerably for premium cigars on the North American market. In Europe, volume development differed between countries and total volume was flat with year-ago levels.”
Converted from Swedish Krona, Swedish Match’s cigar operations had 2004 nine-month revenues of $336.67 million and realized operating income from the sector of $54.15 million. That’s a lot of sticks, folks.
From the Cubador:
In a ploy to grab monies sent by Cuban-Americans to relatives on the island, the Cuban Central Bank outlawed the use of American dollars for all commercial and retail transactions effective November 8.
Although possession of dollars will be allowed, a new “convertible peso” will be required for use in all transactions and a 10 percent tax will apply to conversions from U.S. dollars. There will be no conversion tax from other currencies, such as the Euro, British pound, Swiss franc or Canadian dollar.
The Reuters news agency noted that estimates of remittances in U.S. dollars to Cuba are as high as $1 billion, so the conversion could gain the government about $100 million annually.
The Reuters story noted that credit card payments would not be affected, since no cards issued by U.S. banks are valid in Cuba. Savvy travelers who travel to the island often carry travelers’ cheques issued by Canadian banks, which are then valid in Cuba.
Cuba’s actions may be tied to the actual difficulty of consistently getting enough U.S. currency to run their economy in dollars. The U.S. government has cracked down on third countries which had been assisting the Cubans with their dollar transactions. The Department of the Treasury fined Swiss financial giant UBS $100 million last May for illegally providing Cuba and three other prohibited countries with fresh U.S. currency notes.
~ Rich Perelman
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