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

CIGAR IMPORTS GATHERING STRENGTH

CIGAR IMPORTS GATHERING STRENGTH

Plus: SCHIP II appears likely to fail again

Los Angeles, November 1 – The amazing story of the United States cigar market – the largest in the world – continued in August as imports rose once again.

Even while being battered by smoking bans and threatened by an enormous tax increase in the State Children’s Health Insurance Program (SCHIP) bill in Congress, imports of premium cigars into the U.S. rose almost five percent in August over 2006 figures for the same month and are ahead of the year-to-date figures for 2006 by more than 6.5 percent!

According to figures provided by the Cigar Association of America, based on U.S. Customs data, 32.85 million premium cigars were imported into the U.S. in August 2007: 18.1 million (55.0%) came from the Dominican Republic; 8.7 million (26.4%) came from Honduras and 5.9 million (17.8%) came from Nicaragua. Minor amounts came from Mexico and the Philippines.

For the year, the totals are now 204.4 million premium cigars imported through August. That’s well ahead of the 2006 total of 191.8 million and even the 2005 total of 190.8 million. The 2005 figure is significant because it turned out to be the third-biggest year on record for imports at 329.5 million, behind only the Cigar Boom years of 1997 and 1998.

In fact, at the present rate, imports for 2007 would reach 331.5 million and take over the no. 3 spot in history, not far from the 1998 total of 334.6 million in the last year of the Cigar Boom. That’s a total that most cigar industry executives thought might not be reached again for many years, even decades. It could be surpassed just nine years later.

As always, the biggest contributor to the import total is the Dominican Republic. Already in 2007, it has sent 110.2 million premium cigars to the U.S., 53.9 percent of the total. Honduras remains in second place with 49.1 million (24.0%) with Nicaragua not far behind at 42.7 million or 20.8 percent.

It’s worth noting that while Dominican and Honduran exports are up slightly for the year, Nicaragua cigar exports to the U.S. are up a remarkable 23.9 percent.

And it’s not just the premium market which is rising:

• Imports of all large cigars, including machine-mades, rose by 10.2 percent for the first eight months of 2007 to 550.52 million cigars.

• Imports of little cigars have run wild all year, with the total for the eight months of 2007 so far at 218.1 million units, a stunning 192% of last year’s eight-month total of 113.6 million. The biggest suppliers in that market are India (75.4 million) and Brazil (52.5 million).

• And all those figures mean that the overall total of imported cigars has risen to 768.7 million units through August of 2007, fully 25 percent ahead of last year’s total of 613.3 million cigars of all types through August. That’s a lot of cigars, whether premium, machine-made or little!

The world’s largest cigar-producing nation:
Although there is much pride in Cuba about the production of famous Havana cigars, there’s no doubt that the Dominican Republic is the world’s leading cigar-producing nation. They simply make more cigars there than anywhere else. Based only on U.S. imports and not counting the rapidly-expanding export trade to European and Asian countries, the Dominican sent 110.2 million premium, 274.8 million machine-made and 0.14 million little cigars to American smokers in the first eight months of 2007. That’s 385 million cigars of all types!

By comparison, Cuban production for export is mostly in handmade cigars and is estimated at about 160 million cigars for a full year, although exact figures are rarely provided.

For the full year of 2006, Dominican exports included 171 million premium cigars and 551.3 million total. So far in 2007, exports to the U.S. alone are running 13 percent ahead of last year. Wow!

SCHIP II headed for another Presidential veto:
As we reported on Monday, the Congressional Democrats continue to insist on passing the State Children’s Health Insurance Program (SCHIP) legislation and will, apparently, continue to fail.

Chris McCall, the legislative director of the International Premium Cigar and Pipe Retailers Association (IPCPR), sent a note to the trade on Tuesday with the outlook:

“The fight in Congress over SCHIP funded by increase tobacco excise taxes, specifically, the exorbitant increase in handmade cigar excise taxes, continues. House Resolution (H.R.) 3963, contains few significant changes that will persuade opposing Republicans to change their vote on the proposed expansion of the now controversial government-funded children's healthcare program. H.R. 3963 passed the House of Representatives in a floor vote on October 26 by a margin of 265-142, seven votes short necessary to override a likely presidential veto.

“Because H.R. 3963 has not addressed in a meaningful way the objections that caused the President to veto H.R. 976, the President will veto this legislation if it is presented to him without significant changes.

“According to many sources, including IPCPR's federal lobbyists, H.R. 3963 will not survive the legislative cycle. We expect the president to veto H.R. 3963 and the potential veto override vote will fail. Following the Republican Caucus last week, Republicans will stand opposed to the current SCHIP expansion proposal, leading to Round Three and opening the issue to legitimate compromises for the cigar industry.”

It should be noted that while the last vote in the House of Representatives got within seven votes of a “veto-proof” two-thirds majority of those present, only 407 of 435 members voted as much of the Southern California delegation was at home dealing with the State’s wildfire problems. That group included as many as 14 Republican members who had voted against the SCHIP bill previously and are likely to do so again.
~ Rich Perelman

Bookmark

Email This

Comments (0) add comment