 Are cigar prices out of control compared to 25 years ago?
Los Angeles, March 17 – Amid the $40 Padron 40th Anniversary and $30 Fuente Fuente Opus X Fuente Fuente cigars, does it seem like cigar prices are getting out of hand?
Even with our CigarWire comparison shopper spreadsheet and our weekly look at “steals and deals” from major mail-order and on-line retailers, you can get lost in the maze of price increases, line extensions and special packaging.
So, let’s test the market and see what prices have done over the last, say, 25 years, with help from Lew Rothman’s Cigar Almanac (1980 edition), actually published in late 1979. Rothman is best known today as the founder of giant J-R Cigars, along with its wholesale division, Cigars by Santa Clara.
In 1980, American cigar smokers were making the move from machine-made to handmade cigars in some numbers, but familiar machine-made names like King Edward, Dutch Masters and Phillies outsold them all . . . just like today. Unlike today, however, leading brands were owned by a large number of small players rather than the huge number of brands owned by a few makers and/or distributors.
Our economic baseline is the famed Consumer Price Index. Compiled by the U.S. Bureau of Labor Statistics, the Consumer Price Index in 2005 is about 245% of the 1980 level. That is, $1 in 1980 is worth about $2.45 today.
So, how do today’s suggested retail prices compare to 1980? Let’s compare ten brands we all recognize in today’s market:
• Arturo Fuente, an almost unknown brand in 1980, making both handmade and machine-made cigars with distribution from Tampa, Florida.
> 8-5-8 (6 inches by 47 ring, handmade) – maybe their best size in their standard “Gran Reserva” series – had a retail price of 65 cents in 1980, but $3.75 today, a rise of 577%. Congratulations to the Fuentes for creating their remarkable stature from what you can see was humble beginnings.
• Bering, then considered to be one of the top value cigars available and made by Corral, Wodiska y Cia. of Tampa, Florida. It’s now owned by Rothman’s Cigars by Santa Clara of Cary, North Carolina:
> Corona Grande (6 1/4 x 46 handmade), retailed for 45 cents in 1980, but $2.00 today, a rise of 444%.
• Don Diego, then made in the Canary Islands of Spain and one of the best-selling imported cigars of the 1980s. It’s now part of the Altadis USA roster of brands:
> Coronas (5 5/8 x 42 handmade) retailed for $1.15 in 1980, but will cost you $3.75 apiece today, a rise of 326% in 25 years.
• Excalibur, a great cigar since it was introduced by Villazon & Co. of Englewood, New Jersey, now part of the General Cigar Holdings family:
> No. 1 (7 1/4 x 54 handmade), was $1.50 retail in 1980 ($1.50!), but will now cost you $6.05 a copy in 2005, an increase of 403%, but still a great value!
• H. Upmann, introduced to the U.S. market in 1975 in a non-Cuban version. In 1980, H. Upmann was made in the Canary Islands of Spain and is now part of the Altadis USA brand family.
> Churchill (5 5/8 x 46 handmade), was $1.40 retail in 1980, but $4.50 today, an increase of 321%.
• Hoyo de Monterrey, famous then and famous now, distributed by Villazon and now part of General Cigar:
> Rothschild (4 1/2 x 50 handmade), then retailing for 70 cents a cigar, but will cost you $3.05 today, an increase of 436%.
• Macanudo, then made in Jamaica and the flagship brand of Culbro Corporation, now known as General Cigar:
> Prince Philip (7 1/2 x 49 handmade), was $1.60 in boxes of 10 in 1980, but now retailing for $6.45, still available in 10s; a price increase of 378%.
• Partagas, also part of the Culbro Corporation roster and also made in Jamaica, now made in the Dominican Republic as part of the General Cigar brand list:
> No. 8-9-8 (6 7/8 x 44), a legendary size from Cuba’s pre-nationalization days, was offered for a retail price of $1.75 in 1980, now $6.45 in 2005, an increase of 369%.
• Punch, part of the Villazon roster in 1980, but now owned by General Cigar:
> Punch Punch (6 1/8 x 44 handmade), retailed for 80 cents then and still reasonably priced today at $3.85 each, a increase of 481% in a quarter-century.
• Te-Amo, also the leading Mexican cigar in 1980, then distributed by the long-forgotten Geryl Company of Union City, New Jersey. Today, it’s part of the giant Altadis USA brand group:
> Relaxation (6 5/8 x 42 handmade), was $1.10 in 1980 and $3.35 in 2005, an increase of 305%.
The aggregate retail price of these ten cigars in 1980 was $11.10, an average of $1.11 each. Today, the retail price of these cigars is $43.20! An increase of 389%, well ahead of the 245% rise in the Consumer Price Index.
You may ask, then, what about street prices? Our ten cigars will cost you about $29.25 today from most of the discount catalog sellers via mail-order or the Internet. That’s 264% of the retail price from 1980 and probably about 293% against any discount prices – maybe only in New York – in 1980.
Not bad for 25 years later: cigar prices not too much above the rate of inflation at 264-293% against 245%. (Statistics freaks will note that propogandists will scream that cigars have risen 20% more than other goods, but we’re talking about an actual difference of 48 cents! Remember that when someone tells you that eating blue cheese dressing makes you more likely to suffer some malady: don’t settle for the relative risk, always ask for actual figures. This warning is NOT brought to you by the American Cancer, Lung or any other Society which peddles such figures with impunity.)
But there’s a moral to these figures. All of them are measurements of price increases in the “base” brands. These are, for the most part, your best values in cigars today. Line extensions or limited-edition brands like the Fuente Fuente Opus X, Macanudo Gold Label or Padron 1964 Anniversary Series were not part of the U.S. cigar scene in 1980 and they are the culprits in the high-price explosion of today.
Stick with the basics. The best then . . . and now.
~ Rich Perelman
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