The lift is near ? What will happen to the NC manufacturers and countries when the embargo is lifted ?

[nubchin]

Hey guys .

I have never posted a topic in this forum but am a constant reader but bare with me if I miss any thing.

I have been asking this same question on US based forums , but I was wondering what opinions do the biggest connoisseurs forum has about this topic.

Some say Habanos will not sell there tobacco leafs to competing NC manufacturers which sounds reasonable , so they will have to compete with there own tobacco which explains the move of some NC manufacturers trying to discover the European and Asian markets .

We have seen Pete Johnson in Tokyo , Paris , Humberg etc with Pepin Garcia in some tours . Rocky Patel touring around, and Nick Perdomo pumping most of his highest "Premium" Edicion de Silvio to Russia .

Is discovering new markets the only way for the NCs?

Considering the Central American countries were dragged in to the cigar market for the demand in the US after the embargo , is the NC market mature enough to stand against the end of the embargo ?

Do we as consumers identify the tobacco from each countries as done in wine market ?

What are the moves that they should take in your opinions?

An interesting post by Frank Herrera about Habanos registering a Cuban Cigar retail chain in the US .

http://cigarlaw.wordpress.com/...tail-store-services/

We can all agree that this will effect every single cigar smoker in the world I guess .

[CBL]

First off: Welcome! And I think you're supposed to introduce yourself for a second before posting

Regarding your question I think there will be two camps if and when the embargo is lifted.

1) The type of people in the US that will start smoking Cubans just because they are Cubans and by definition rare and special for American citizens.

2) Cigar aficionados that enjoyed NC's, try an occasional Cuban after the embargo has been lifted and are utterly disappointed by Havanas....

I think most people have already made up their mind about which ones they prefer regardless of the embargo, we live in a time where boarders are non-existent when it comes to consumables and no embargo can stop that.

I don't think the embargo lift will have huge consequences, as we've discussed on this forum the cigar smoking perception of most people is still pretty negative which leads me to believe that it will be hard for Habanos S.A. to take over an entire market. I think the way some Cuban lovers look down at Non-Cuban cigars will be the same the other way around.

[TankerT]

Well. The USA is a big cigar market. Habanos entering the US market will be a big change. But, I think it will be an interesting change.

Will it hurt NC business? Darn straight. It will have an immediate, short-term impact. US folks will scramble to get Cuban Cigars at their local B&M. NC makers will have to figure out a way to get their business.

However, I think that this will be a short lived phenomenon as eventually the novelty of buying it just because it is Cuban will wear off. The question is, how long will the novelty last, and how much damage will it do to the NC companies? But, I think the smart NC companies are already expanding into other markets as previously mentioned. It's the best way to grow their business anyway.

Another factor is that will make it interesting, is that Habanos does not own the trademark registrations for many of their names in the USA. So... Cohiba? Might not be able to buy one from Cuba for a bit, since General Cigar owns the rights to that name. Montecristo? Well... Montecristo (NC) is made by Altadis, who also owns a 50% stake in Habanos SA. So, we'd probably see Cuban Montecristos right away.

Because of the trademark issues, we could see some lesser quality Cuban brands become bigger. For example, Ataldis also holds the rights to Quintero and Jose Piedra.

Also, reintroducing Cubans into the market could set off more trademark lawsuits. Habanos SA has had a few suits dealing with the Cohiba brand name. And, that ruling has gone back and forth. We could see other lawsuits regarding names of brands that Habanos doesn't currently hold the trademark in the USA. Losing the Cohiba name could hurt General Cigar's sales. And so on.

In the long run, Habanos SA will become just another company. But, I think that lots of the NC marketing that has sold their sticks (Cuban seed... pre-embargo Cuban... Cuban this style... Cuban that style...) has provided free advertising for Habanos for years in a sense.

And, Habanos SA can only put out so many quality sticks a year due to materials and trained labor. So, are we going to run into another quality issue like we had in the early 2000s?

So, will NC companies be around for the long term? Yup. No question about it. The question is, which of them are currently well poised to stay around with losing some market share? And, which brand names will stay NC, and which will have a Cuban line?

That's my 2 cents.

[cckandb24]

IMO I think an end to the embargo will make it harder to aquire ccs, because cuba can only produce so much tobacco and you add a new HUGE market and the ccs wil be spread out a lot thinner and be more expensive because of demand. I know quality will for sure suffer in cubas attempt to rush more product out to market to supply the demand. Even though most americans palate are aquired to ncs, I believe most will switch. I hope the embargo stays in place

[TonyV]

I agree with both JThomas and CBL. However here in the land of litigation, even if the ban was lifted tomorrow there would be years and years worth of law suits before a single stick made it to market.Then of course,the very next day the entire USA becomes a smoke free zone.

[CaptainQuintero]

I don't think we would see a shortage around the world, remember that pre-embargo there was enough CC to go around. I would expect that there will be a surge similar to when the market in China opened up- Siglo VI flying off the shelves and BHKs etc for the money crowd.

At the recent UK tobacco convention there was a very strong showing from NC companies (we have a very poor showing over here) with lines from My father, Tat and other big NC names. So it seems like the NC guys are looking to expand to make up for the initial slump in their sales.

But as above, I can never ever see cuban tobacco being sold to NC companies...ever. I'm assuming that for everybody else, the change will be limited with the exception of us getting a bigger choice of NC and maybe construction issues coming into play again: We know that HSA has been hoarding tobacco in expectation of the embargo being lifted so we may see an increase of inexperienced rollers being brought in to make up the output shortfall.

But it's all still complete heresay.

I'd even hazard a guess that if Obama looses the election then the embargo being lifted will be put on the back burner for many years.

[SCgarman]

All the talk and rumors about the embargo ending anytime soon is in my opinion hogwash. With the US still in an economic recession and millions of folks jobless who cannot find work including myself, the last thing on our presidents and congress' minds is the Cuban embargo. If both Castro brothers die off and Cuba really begins to see drastic reforms towards a democratic society, then we might POSSIBLY see an end to the embargo. By that time, the government nazis in the US will probably get their way and all tobacco products will be completely illegal like the prohibition days. The FDA is already trying to get their hands on regulating premium cigars here in the US, and if that happens, kiss the cigar industry goodbye as you know it now.

[Colt45]

I guess we'll find out what happens when it actually happens.....

I'm not sure I believe that the involved parties are waiting until the last minute to resolve possible trademark and associated issues,

but I also wouldn't really be surprised either way.

I would, on the other hand, be surprised if you could walk into any cigar shop and purchase Cuban cigars. I imagine they would control

where they can be acquired in the U.S. just as they do around the world now, if for no other reasons than to maintain exclusivity and

to try and assure authenticity.

[LeafLover]

One hell of a first post.

IMO, the NC market will take a hit initially. Perhaps many will buy CC's exclusively for a while and many may just decide to make it their cigar diet wholly. But, if the CC construction doesn't change and HSA continues to disappoint it's consumers by discontinuing the habanos they have grown to love, I think over time cigar consumers will return to buying NC's. Their cigar purchasing will reach an equilibrium, so to speak.

I do believe that the NC market has a strong following that will withstand a CC tidal wave. Having been out of the NC game and recently just dipping back into it, a la Piggy, I've found some great NC's that I feel stand up to some CC greats. So, there is definitely some NC players out there pumping out some great cigars. Namely, I think the Tatuaje, Fuente and Padron brands will fare the best.

CC's are great cigars but as a whole, CC's have their drawbacks....pointing fingers at HSA of course.

On a related note, I think that HSA would sell leaf to NC makers if the price is right.

[cigcars]

One hell of a first post.

IMO, the NC market will take a hit initially. Perhaps many will buy CC's exclusively for a while and many may just decide to make it their cigar diet wholly. But, if the CC construction doesn't change and HSA continues to disappoint it's consumers by discontinuing the habanos they have grown to love, I think over time cigar consumers will return to buying NC's. Their cigar purchasing will reach an equilibrium, so to speak.

I do believe that the NC market has a strong following that will withstand a CC tidal wave. Having been out of the NC game and recently just dipping back into it, a la Piggy, I've found some great NC's that I feel stand up to some CC greats. So, there is definitely some NC players out there pumping out some great cigars. Namely, I think the Tatuaje, Fuente and Padron brands will fare the best.

CC's are great cigars but as a whole, CC's have their drawbacks....pointing fingers at HSA of course.

On a related note, I think that HSA would sell leaf to NC makers if the price is right.

...gee, you're smart (hat's off & holding, etc.)

[KarlJ]

I missed something. When is the end of the embargo for?

It's likely not even a thought at this point in time.

This thread is based on speculation, "what if?".

-Karl

[El Presidente]

From an international perspective regarding NC companies forging overseas markets.

Those who are successful (leaving out Davidoff/Macanudo/the corporates) have been in those markets for some time: Companies such as Padron & Fuente are well enough entrenched.

Most NC companies over the past 12 years that have tried to forge a decent market offshore have failed. It is unlikely any new company trying today to get a commercial slice of a market in Europe or Asia will succeed. The reasons simply being:

1. that it takes tremendous resources and commitment.
2. There is no real price advantage to NC's in international markets. They are taxed in the majority of countries on Tobacco weight and not wholesale price.
3. Almost all marketing avenues have been extinguished excluding a grass roots B&M campaign.
4. B&M are doing it tough and will stock what they know sells. The B&M retail network I suspect has halved globally over the past decade with fewer and fewer "corner store" operations. Most larger cities are dominated by 1-2 major B&M players. So...if you are supplying a mid sized country and you get all players on board who take 20 boxes a year...you have a half dozen mastercases at best.

Just a tough market to get into for a new player or even an established player. Padron and Fuente put in the hard yards (and had the vision) over a decade ago when things were a tad easier.

[Matt Day]

Another question is could the lifting of the embargo force habanos to the plug the holes in some of the lines they have created with deletions? as even by picking up a catalogue or browsing on the new it is apparent that most nc lines have a few staple traditional size like coronas in them. And the fact that habanos now don’t could actually lead to some sense on the deletion front and maybe even some gap plugging.

[nubchin]

From an international perspective regarding NC companies forging overseas markets.

Those who are successful (leaving out Davidoff/Macanudo/the corporates) have been in those markets for some time: Companies such as Padron & Fuente are well enough entrenched.

Most NC companies over the past 12 years that have tried to forge a decent market offshore have failed. It is unlikely any new company trying today to get a commercial slice of a market in Europe or Asia will succeed. The reasons simply being:

1. that it takes tremendous resources and commitment.
2. There is no real price advantage to NC's in international markets. They are taxed in the majority of countries on Tobacco weight and not wholesale price.
3. Almost all marketing avenues have been extinguished excluding a grass roots B&M campaign.
4. B&M are doing it tough and will stock what they know sells. The B&M retail network I suspect has halved globally over the past decade with fewer and fewer "corner store" operations. Most larger cities are dominated by 1-2 major B&M players. So...if you are supplying a mid sized country and you get all players on board who take 20 boxes a year...you have a half dozen mastercases at best.

Just a tough market to get into for a new player or even an established player. Padron and Fuente put in the hard yards (and had the vision) over a decade ago when things were a tad easier.

Rob , so in one words you say TOO LATE for the vast majority of the "cubanesque" league .

The BM situations are clearly a down hill ( ive never bought more then a box from a local store ) , but the internet I guess is creating a funny or I should say a legitimate free market were a Dominican a Nicaraguan even a Panamanian roller can advertise his sticks and sell them directly to whom ever were ever the postman reaches (I am smoking a Panamanian sent in from Germany right now ) with little resources and some are creative with there cigars.

Comparing with the wines reviewed in Spitbucket and Cigar Reviews here , do you guys and Rob see identity ( cigar wise ) in central American countries as if in Australian wines and California wines ?

Or are we going to remember the embargo days as simply the biggest counterfeit days in Cuban cigar history ?

[nubchin]

It's likely not even a thought at this point in time.

This thread is based on speculation, "what if?".

-Karl

Yes, we do not have the date but Habanos has registered a trade mark for retailing store chain in the US , the current admin has allowed all US citizens to travel to Cuba , the extension of the embargo was approved for the next 1 year and not for 10 years as done in the past , so i am not so sure if we can call that a speculation .

[sblevit]

I wouldn't count on the embargo being lifted in 2012. Obama will need to either reauthorize the embargo or lift it (to the extent he can do so without an act of Congress -- this has become a little murky due to the passage of the Cuban Democracy Act and the Helms-Burton Act) in September of 2012. That's right before the next election. He's not going to risk loosing votes in Florida that close to the election.

[El Presidente]

Rob , so in one words you say TOO LATE for the vast majority of the "cubanesque" league .

The BM situations are clearly a down hill ( ive never bought more then a box from a local store ) , but the internet I guess is creating a funny or I should say a legitimate free market were a Dominican a Nicaraguan even a Panamanian roller can advertise his sticks and sell them directly to whom ever were ever the postman reaches (I am smoking a Panamanian sent in from Germany right now ) with little resources and some are creative with there cigars.

Comparing with the wines reviewed in Spitbucket and Cigar Reviews here , do you guys and Rob see identity ( cigar wise ) in central American countries as if in Australian wines and California wines ?

Or are we going to remember the embargo days as simply the biggest counterfeit days in Cuban cigar history ?

In my opinion it is a little too late for the vast majority of NC manufacturers. Legislation and shrinking traditional distribution channels has put paid to that ( true international market expansion) for all but the exceptional few (product and marketing).

The internet is indeed a great way to get your message out. Unfortunately for them it is a wall of white noise and difficult to get their message out for real market penetration.

In relation to the wine analogy, Cuban Cigars have cemented themselves in much of the International mind as the "Champagne" of cigars....no matter how much Cuba has tried to shoot itself in the foot over thhe years. !LOL!

I don't see cigars as being Nics, Honduran, Jamaican etc. When I think of cigars I think Cuban and Non Cuban first. If it is a brand I know such as Padron then I think Nic. To be honest I could probably tell you 10 NC brands and know where they are from and I suspect as a non US cigar lover I would be in the top 5% who could name that many.

I am not that pessimistic as to the future of NC sales in the US. I think they will be fine as people are creatures of habit and they have grown up with Nic and Dom tobacco. Brands such as Macanudo/Padron/Fuente etal have little to fear. Davidoff does a great trade internationally and competes well with Cuban cigars. Then again....history..name...great white tube...entrenched.

[nubchin]

Cuban Cigars have cemented themselves in much of the International mind as the "Champagne" of cigars....no matter how much Cuba has tried to shoot itself in the foot over thhe years. !LOL!

all those grate sticks gone ,,,, .

Dead straight and fair enough assessment from your part , its always the FOH to find answers I guess .

[nubchin]

I wouldn't count on the embargo being lifted in 2012. Obama will need to either reauthorize the embargo or lift it (to the extent he can do so without an act of Congress -- this has become a little murky due to the passage of the Cuban Democracy Act and the Helms-Burton Act) in September of 2012. That's right before the next election. He's not going to risk loosing votes in Florida that close to the election.

Ill try to stay in guidelines of this forum , but you didn't . Edit required and I hate doing it (Pres)

This year we see too much moves from both sides and from the NC manufacturers part toward the lift , but at the same time was amazed how the NC part lacked in any form of clear strategy to promote there own countries crops , nor did they start abandoning the frame of "Cubanesque" to try create a mature NC market to face the lift , but as Rob stated , too late I guess .

[Lastroll]

The embargo is more than likely here to stay. The embargo was codified into law in 1992, with the stated purpose to maintain sanctions on Cuba so long as the Cuban government continues to refuse to move toward "democratization and greater respect for human rights"... That change will probably never happen in my lifetime and even if Cuba somehow starts to change, it will surely be subjective as to the degree of democratization and human rights that will be acceptable to the US.

The Cuban-American Lobby will insist that Cuba is 100% free and has changed110% regarding human rights... That's never going to happen IMO.

The Cuban-American Lobby will never be satisfied and they will continue to lobby to keep the embargo/law in effect. Remember, their votes are crucial inthe swing state of Florida.

Bottom line, every President will continue to extend the embargo and kick the can down the road to avoid a conflict with the Cuban-American lobby. Obama just kicked the can last month for another year and another President.