Grey Market Cigars

[Guest Drayton Hill]

Could someone offer a clear explanation of what Grey market cigars are please?

Are these made in Cuba in the legit factories?

How do they get into the market?

[cigcars]

I believe they are "middle man", sort of, cigar providers. They obtain/purchase/acquire a desired cigar from said manufacturer or other means, then sell that to you. Being a "grey market" means that you don't know if what they've obtained for you are the real deal or not. In other words, instead of your buying or getting your Habanos from an authorized and licensed Habanos dealer, you are obtaining them from an outside of bounds outlet. 50-50 chance on your cigars' authenticity. Does that sound about right, people?

[Trevor2118]

From my website (Draft)

The Grey Market

Understanding the grey market gives an insight to how professionally counterfeit cigars enter the market chain.

Professional counterfeit operations generally originate from Central America, Cuba and (to a lesser extent) Asia. These operations involve massive quantities.

They sell into the grey market, passing themselves off as legitimate parallel suppliers. They also sell direct to stores, bars, clubs, street touts, cruise lines, US vacation destinations, etc.

The Official Distribution Chain

Habanos SA grants single licences on a region by region basis.

Regional Licence Holders either have their own local distribution offices and/or sell direct to sub-distributors.

The Local Offices sell to sub-distributors and major retailers.

Sub-distributors may have retail sales and/or wholesale to smaller the retailers (tobacconists, bars, clubs, liquor outlets, etc).

Retailers can purchase from distributors, sub-distributors, parallel importers, parallel import themselves, or use a combination of all sources.

Parallel Suppliers

This is the so called Grey market.

Parallel suppliers are either legitimate product suppliers or they are professionally counterfeiters posing as a legitimate supplier.

Dealers may end up with legitimate cigars or 100% fakes, or a mixture of both.

Theoretically there is nothing wrong with parallel importing, but it does depend on the knowledge and scruples of all the parties involved.

Legitimate parallel suppliers deal with sub-distributors in different regions. Transactions, communications, and payment are done through third party companies so that nothing can be traced directly back to the distributor/sub-distributor from where the cigars originated.

Sub distributors sell product into the grey market to increase their own volume turnover. The more stock they sell, the better discount they can get from their distributor.

Purchasing from a parallel supplier is generally cheaper, however there are two downsides: the possibility of fakes and there are no returns, and therefore no quality control. Many retailers purchase from both licensed and parallel supply sources.

Some world renowned retailers have been caught selling fakes (notably Limited Editions). When pressed they admitted that they purchased the cigars outside of the licensed distribution channel.

Habanos SA is currently trying to eliminate the grey market. The introduction of the new warranty seal (c2010) is one measure employed to enforce this. If the bar code has been removed from the seal, this is a sure sign that the product is grey market.

Some grey market venders remove this barcode so that the product can not be traced back to the distributor selling outside his region.

Without this barcode, it is impossible to utilise the Habanos SA website to very the authenticity of the product. Buyers should always use caution with buying from an unknown grey market dealer.

[gigabyte056]

Thank you Trevor, as always a pleasure.

All things considered , when the price difference is around 10% and we are already paying, why buy from a source that may or may not be legitimate?

We are used to invest good money in quality product, the risk of having a top quality fake is simply not worth it.

BTW: Trevor are you going to cover in your review of different marketing methods for HABANOS S.A the duty free angle?

I think a very high percentage of cigars are sold through that route.

[j0z3r]

Great info Trevor.

The thing that bothers me most about Grey Market Cuban cigars is that you just don't know what you're getting. Set aside questions of legitimacy, if I'm laying down the coin for a box of Cuban cigars, I'm more than happy to pay a bit extra knowing that Rob inspects every box and has a certain standard of what he'll even sell.

[riazp]

I have to say I must agree, i'm willing to pay a bit more for a vendor who has a passion for what he/she/they do and take the time to open and inspect the boxes, and try to accomodate you if your looking for a specific box code. after all you always get what you pay for...if the price is too good to be true...probably grey market

[Puros Y Vino]

Agreed. When you shop for the lowest price, you take on more risk. Whereas if you build a relationship with a trusted vendor you will pay a bit more per unit but often that translates into a better customer service.

[Vortigan]

The thing that bothers me most about Grey Market Cuban cigars is that you just don't know what you're getting. Set aside questions of legitimacy, if I'm laying down the coin for a box of Cuban cigars, I'm more than happy to pay a bit extra knowing that Rob inspects every box and has a certain standard of what he'll even sell.

I couldn't agree more with this statement! I know now,since discovering FOH and all the information from very learned fellow BOTL's,that I have previously purchased from the grey market.I've got lucky in that I've never received fakes but lucky is all it's been! Minimal research has shown that with Rob,on average,I'm paying $20 US more per box than from previously used vendors! An amount not even worth mentioning,especially as said here,considering the level of service and personal inspection of every box by Rob and the team at CCzar! I'll certainly never be using another vendor!!

[tugboat]

Great info Trevor as usual and thanks.

[BuckknuttsFan1]

Glad to see I am not the only person with these questions. Good info thanks a bunch.

[armedak]

I guess I'm the minority opinion here on parallel importers or grey market suppliers. First off in my experience, we are not talking about a mere 10% savings. The best parallel vendors are located in low tax zones and also pass on significant tax savings to their clients. Consequently, we are talking about significant savings. Also, the best parallel vendors guarantee satisfaction and delivery and will allow returns. I also don't buy the counterfeited marcas like Cohiba, Montecristo etc..,and Limited editions and Regionals. I like the limited run regular production marcas like Rafael Gonzalez, Punch, etc..&made in smaller quantities and thus in my experience tend to be of higher quality.

[turpinivan]

My friend has great craze of cigars and he buy discounted cigars online. I like to gift him cigar case which is unique and cool. There are many cases brand available, please recommend me best cigar case brand.

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