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CIGAR IMPORT TRAFFIC STEADY IN 2007

Plus: Montecristo on the cutting edge!

Los Angeles, May 28 – How long can this go on?

Despite the increasingly level of anti-tobacco rhetoric, increasingly severe restrictions on where one can smoke and rising cigar prices, the most popular index of cigar traffic – import totals – continue to move smartly along.

The Cigar Association of America’s report for March 2007 showed another increase against one year prior and end the first quarter with imports running nicely ahead of 2006:

• Premium cigar imports totaled 25.8 million for March, up 4.8% over the 24.6 million that entered the U.S. March of 2006.

• For the first quarter of 2007, imports totaled 60.3 million, up 3.5% over the 58.3 million for the first three months of 2006.

• As usual, the Dominican Republic dominated import totals, with 14.4 million or 56% of the total. For the first quarter, Dominican imports totaled 33.2 million, up 11.4% from last year.

• Honduras maintained its second-place status, but import totals fell for the month and for the first quarter. March imports totaled 6.1 million, down from 6.6 million the year before and for the quarter, imports were down from almost 15 million in 2006 to 13.6 million, nearly a 10% decline.

• Nicaraguan imports were also down slightly. For March of 2007, imports reached 4.7 million, down slightly from the 4.9 million a year earlier. For the first quarter, imports were down almost four percent to 12.7 million compared to 13.2 million for 2006.

No other country registered even one million cigars imported into the U.S. in the first quarter according to the figures, taken from U.S. Customs Service reports. The leader behind the big three was the Bahamas – meaning Graycliff and its associated brands – with 422,000 cigars imported in the month and for the quarter. Second best for the quarter was Mexico, with 241,000 and then the Philippines with 154,000 for the quarter.

What does all this mean? For years, cigar imports struggled even to reach 100 million in the premium cigar category and were only 81.2 million in 1990. But by 1994, imports had reached 100 million again as the Cigar Boom started to build and then raced to an all-time high of 417.77 million in 1997 and 334.58 million in 1998. With the end of the Boom, imports dropped back to the 250 million range and the doomsayers were out in force.

Yet after five steady years, imports ran past 300 million again in 2004 with 307.6 million, then zoomed to 329.5 million in 2005 (third-best all-time) and a good 311.0 million last year. At the current pace, the so-called “Cigar Renaissance” will continue and could challenge 2005 for third-best on record.

That’s a testament to the quality of today’s cigars on variety, taste and price. And the excitement is not limited to premium cigars. If you check the import totals on all large cigars – including the massive production of machine-made cigars in the Dominican Republic and increasingly in Honduras – U.S. imports jumped almost 20% in the first quarter and 29% in March alone! And that is nothing compared to little cigar imports. Compared to the first quarter of 2006, little cigar imports jumped by 335% from 29.7 million last year to 99.7 this year! Wow!

No one may see anyone smoking much on the street anymore and no-smoking signs are going up everywhere. But that hasn’t stopped cigar lovers from getting lit up so far this year!

Montecristo cuts up:
Altadis U.S.A. has been making steady trials in the non-cigar accessory category, especially with its Montecristo brand, but never too far from the cigar lifestyle.

There was its introduction of a Montecristo coffee blend, then a Montecristo-branded coffee set and the inevitable Montecristo-branded credit card. Now, Altadis has put its famed Montecristo logo on an elegant set of . . . steak knives!

A six-knife set is now being offered at select smokeshops in the U.S., housed in an elegant black-finish wood case with the Montecristo logo on top. The knives themselves are heavy, at 7.2 ounces, with German-made, serrated stainless steel blades adorned with the Montecristo crossed-sword logo.

It’s a limited edition set, of course, and is reported to retail for about $150.00. In addition to the deal your local smokeshop can make for you, you can always try eBay. Multiple knife sets have already landed on the site; search for “montecristo” to find them.

BAT sells Belgium:
The company which makes the well-known European brands Corps Diplomatique, Schimmelpennick, Mercator and Don Pablo – Tabacofina-VanderElst of Leuven, Belgium – is being sold by its parent, British American Tobacco, to ST Cigar Holdings, makers of Henri Wintermans.

No terms were disclosed, but Tabacofina-VanderElst was reported to have assets of about $41.7 million as of the end of last year. It adds to the expanding portfolio of Netherlands-based Skandinavisk Tobakskompagni, which ended last year selling about 1.3 billion cigars. But those were mostly small cigars from brands such as Henri Wintermans, Nobel and Petit.

Earlier this year it purchased C.A.O. International to give it a stake in the premium cigar arena and Tabacofina-VanderElst will give it a place in the European dry-cured market for large cigars, especially Schimmelpennick and Corps Diplomatique. The Belgian company made 420 million cigars last season, of which about 200 million were sold in Belgium with strong exports to France, Italy and the Netherlands.

Said STCG C.E.O. Rob Zwarts, “We have now strengthened our position as the leading cigar company in Europe and have clearly become one of the top three players worldwide.” The transaction is expected to be completed later this year.
~ Rich Perelman

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