Questions for HSA

[El Presidente]

There is no "official" answer from HSA on this.

Unnoffically

20-25 million cigars were set aside in a special warehouse three years ago for the opening up of the embargo. I understand that the level was increased last year.

At the 2009 HSA festival it was general belief that the embargo would not last 6 months. it made a great deal of sense to boost the reserves. HSA believes that the US will take 50 Million cigars (minimum) in the first year and that it is prudent that they be prepared. Also, there was trepidation from global distributors who did not want to be short of stock. Hence the plan.

It has played out a little differently than expected. The dropping of the Embargo has not come to pass and there appears to be little immediate likelihood given the focus of the Obama administration is in other areas and the Cuban administration isn't budging on the significant reforms required.

There is less pressure to put stock aside now also due to the fact that Distributor and HSA warehouses are bursting at the seams. 2009 was a poor year for HSA sales and they cottoned onto the global fall in sales later than they should have. It would be fair to say that they should have cut back on production 6-9 months earlier than they did.

[shrink]

There is no "official" answer from HSA on this.

Unnoffically

20-25 million cigars were set aside in a special warehouse three years ago for the opening up of the embargo. I understand that the level was increased last year.

This begs the question of what HSA will do with this aged stock. I hope that it finds its way to market in the next year or two. Given the quality of regular '06 and '07 production, these cigars should be outstanding.

IMO, Obama was politically wise not to drop the embargo or "cozy up" to the Castros in his first term. It would have had little political upside, and would have left him more vulnerable to attacks from the right. I believe that he'll end the embargo early in his second term.

[shortsqueeze]

At the 2009 HSA festival it was general belief that the embargo would not last 6 months.

I would have loved to take the other side of that bet.

Shrink is right. No political upside. But I disagree he'll do anything in his second term either (assuming he gets re-elected). He's used up any political capital he had. He's gonna need the Miami Exiles more than ever when he runs again, and he's gonna have to make promises in kind. Democrat or Republican, they've all found reason to continue the Embargo for political purposes. I am no more hopeful today than I was in 2005. Not to mention it's not in the best interest of the Castro(s) to drop the Embargo, no matter what "they" say publicly.

[samb]

Hmm, I think the only benefit to this damn embargo is I prolly never woulda found FOH!!

[daboose]

Hmm, I think the only benefit to this damn embargo is I prolly never woulda found FOH!!

Ditto.

[jdbrown]

I think everyone is dreaming! As mentioned earlier the Castro regime has zero interest. If the embargo was dropped they would lose control of the country...which is not what they want. Publicly they berate the US but they like it how it is now!! The conditions set forth would be too stringent for them to deal with in my opinion.

[aavkk]

Thanks for that update Rob. I'm wondering if the reason we continue to see 08 stock in the market is due to them pulling it from these "reserves" and replacing the reserves with 09 or more recent stock. Either way its nice to see that they have approximately 25 million very high quality cigars just waiting to be allocated.

[Bartolomeo]

Thanks for that update Rob. I'm wondering if the reason we continue to see 08 stock in the market is due to them pulling it from these "reserves" and replacing the reserves with 09 or more recent stock. Either way its nice to see that they have approximately 25 million very high quality cigars just waiting to be allocated.

Still think a picture of a warehouse in Cuba with that many cigars would be the ultimate screensaver pic

Bart

[Onsto]

Still think a picture of a warehouse in Cuba with that many cigars would be the ultimate screensaver pic

Or a great place for a couple of weeks R&R. Just parachute me in with a lighter, a cutter and some scotch. THe ensuing smoke signals are NOT a call for rescue.

[jawofboston]

Ditto.

Agreed. I'm guessing that if the embargo is lifted tomorrow I'll continue to source most of my Havanas from Czar. A couple of reasons: 1. I don't live in a major city so won't have a local Habanos specialist. The local shop would be lucky to get a few different sticks in. 2. The tax situation in the US is getting OUT OF HAND and only likely to get worse, so I think the economics of the Czar will still make sense, and 3. I would miss Lisa!