Cigars, Cigar Information and where to find Premium Cigars, Discounted Cigars and even Cheap Cigars

LE PLASTIQUE FANTASTIQUE!

Plus: Altadis to sell off logistics unit

Los Angeles, September 5 – Davidoff is one of the best-known names in the cigar business: a legendary cigar merchant, brand icon and a cigar and accessory brand which stands for only the best.

Zino, the given name of the man synonymous with cigars, was first used for a brand name for a line of Honduran-made cigars introduced in 1978 to establish a presence on the U.S. market.

But not long afterward, a line of unique Zino humidors was introduced. Instead of the traditional wood construction, these boxes were made in France of a carefully-finished acrylic in either a clear or smoked style with elegant chrome or gold-finished hinges and corners. Available in two sizes, they also include a terrific humidifier that performs brilliantly with just the addition of distilled water once a month. Today, they’re still one of the best options in humidors for those who prefer a modernist look.

But the folks at Davidoff of Geneva felt it was time to update the line. You can still get either of the original boxes, but today’s designs need color!

So Davidoff has introduced its new “second generation” acrylic humidors in claret, silver and black.

These boxes, also made in France, are the same size as the smaller of the original acrylic models: 9 1/2 inches wide, 6 3/4 inches deep and 4 3/4 inches high. They’ll hold from 35-50 cigars depending on size and come with the dependable Zino humidifier.

And they’re reasonably priced, at least for a Davidoff. Both the standard acrylic and new, colorful models retail for $185.00 each, including the regulator. The larger, original model is a bit more at $310.00 each. But like their big brothers in the Davidoff series – which start at $760.00 and run up to $6,195.00 – they’re a lifetime investment.

Imperial and Altadis still wheeling and dealing:
While the acquisition of Altadis, S.A. by Britain’s Imperial Tobacco is in the process of being completed with the relevant regulatory authorities, the dealing hasn’t stopped.

CVC Capital Partners, which bid unsuccessfully to buy Altadis outright, has reportedly reached an agreement to buy the distribution arm of the company, Logista. It’s a big business in its own right, distributing primarily cigarettes and lots of related things to sales points in Spain and France.

The purchase price will be about $3.3 billion (2.4 million Euro) and has long been rumored as a possibility for a separate sale because it’s not strictly a tobacco product unit. But it’s very profitable, which makes it a favorite of the private-equity crowd.

The end of little cigars?
Lew Rothman of J-R Cigars is the largest retailer of cigars in the world, and he sees little future in little cigars. In his August 24 weekly Dutch Auction special, he offered a variety of well-known sizes of the famed Villiger line for sale at rather low starting prices, as much as 60 percent off the suggested retail prices. Why?

“New laws are on the horizon regarding little cigars. Once Congress comes back in session they are almost 100% certain to start taxing these little cigars as cigarettes (which they definitely are not . . . but who can argue with these schmucks).

“So, we’re starting to unload our little cigars now before we are forced to pay a massive floor tax on them. This tax is so big that I don’t believe they will be salable anymore. To get rid of them fast, we are having a Dutch Auction clearance of this stuff – and appropriately we picked Dutch cigars for the first clearance auction. Four different cigars will be auctioned off simultaneously. We foresee a number of tobacconists buying at these prices, but we don’t care who buys them as long as they’re GONE!”

Rothman is now only referring to the punitive tax structure that would result from the passage of the State Children’s Health Insurance Program (SCHIP) bills now awaiting action by a yet-to-be-named conference committee of the Congress, but also a pending action by the Alcohol and Tobacco Trade Bureau of the U.S. Treasury Department (known as the TTB) on a new ruling which would classify little cigars as cigarettes for the purpose of collecting taxes on them.

The comment period on the proposed new rules closed on March of this year and was opposed by sellers of little cigars and supported by state attorneys general, lusting after additional tax revenue from this growing segment of the cigar industry that is only barely noticeable in comparison to the size of the cigarette trade. Not that any state doesn’t like more revenue, even if it wipes out companies and employees in the process. And those sellers of little cigars who sent comments to the TTB sounded the same note: adopt this rule and the little-cigar segment will essentially disappear.

So while Rothman is dumping his inventory of small cigars, including Villigers, the Hindustan Times of India noted that Villiger has teamed with tobacco distributor Godfrey Phillips to introduce Villiger’s lines of small cigars into that country. Cigars have been on the upswing in India, and that market has considerable promise for the future:

“[Villiger President Heinrich] Villiger says his company will not ask people to smoke and is instead ‘targeting those who are interested in smoking’. The company is eyeing a growing cigar market comprising the young upwardly mobile that is interested in switching from cigarettes to cigars. ‘Cigars are no longer associated with those in their fifties. More and more younger people are taking to cigars,’ Villiger said. . . .

“Villiger feels the European Union, the U.S. and Asia were the key markets in the cigar business. With 30 per cent growth projected for the cigar market, Villiger said there was an immense opportunity to tap about 15 to 20 per cent of the market in India over next three years. ‘We will be present across various market segments since we have brands ranging from Rs 10 to Rs 125 per cigar stick,’ he said.”

Converting the prices referred to in Indian rupees to U.S. dollars, that’s a range from about 25 cents to $3 per cigar. A lot less than will be paid in the U.S. if the SCHIP bill and/or the TTB tax rules come down against little cigars.
~ Rich Perelman

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