International pricing policy by Habanos SA

[ha_banos]

1 hour ago, NSXCIGAR said:

Source? 

I'm sorry, but if the suggestion is that they're going to try and sell Trini Reyes for $500/box I'm highly dubious. Not even HSA could be that stupid. 

Dude! Where you been!?

Chinese dudes be in UK shops buying up everything!

[MrBirdman]

22 minutes ago, ha_banos said:

Chinese dudes be in UK shops buying up everything!

Not for long apparently!

[NSXCIGAR]

53 minutes ago, ha_banos said:

Dude! Where you been!?

Even more expensive in Canada. 

I'm talking world price. Gray market/duty free market. Rob's prices are very much in line with that. 

[grabow32]

2 hours ago, ha_banos said:

Dude! Where you been!?

Chinese dudes be in UK shops buying up everything!

At least they were kind enough to "throw in" free delivery on that price... haha. 

[ha_banos]

1 hour ago, NSXCIGAR said:

Even more expensive in Canada. 

I'm talking world price. Gray market/duty free market. Rob's prices are very much in line with that. 

I get you. When that happens..... Well ... Then we'll all be nudies!

 

Erm...... I mean smoking nudies!

[Hammer Smokin']

Grey market native backed price in Canada for 24 Reyes is currently showing $396.60. 

But sold out. 

At a normal brick and mortar (not indian owned) is closer to $500 CAD (plus 13% tax), so $565 for a box. 

Go Canada!!! Always winning. 

[GoodStix]

46 minutes ago, Hammer Smokin' said:

Go Canada!!!

Careful friend, the sin tax on cigars has been expanded to talking about cigars.  You're in for it dude 😉

[Nevrknow]

12 minutes ago, GoodStix said:

Careful friend, the sin tax on cigars has been expanded to talking about cigars.  You're in for it dude 😉

Our AI deduced you were thinking about cigars. Tax bill.

[Kaptain Karl]

It’s interesting to see how this plays out. Cuba isn’t in good shape. They’re production chain is completely screwed, they’re going to be left with tons of raw materiel and not enough workers to make it. Wouldn’t surprise me if El Prez is making nudies with Cuban tobacco in 5 years. 

[ChicagoRob]

Well it looks like the war has begun.

Most trusted online retailers have removed Cohiba & Trinidad inventory.

[karp]

47 minutes ago, Kaptain Karl said:

It’s interesting to see how this plays out. Cuba isn’t in good shape. They’re production chain is completely screwed, they’re going to be left with tons of raw materiel and not enough workers to make it. Wouldn’t surprise me if El Prez is making nudies with Cuban tobacco in 5 years. 

Or maybe several new lines of Anejados in 10 years... 😀

[SMELTZ]

4 hours ago, ChicagoRob said:

Well it looks like the war has begun.

Most trusted online retailers have removed Cohiba & Trinidad inventory.

They are holding on to Cohiba and Trinidad inventory because they don’t want to lose money selling them at today's prices. Once the standard prices have been set they will be back up again. 

[Lfhard]

1 hour ago, ChicagoRob said:

Well it looks like the war has begun.

Most trusted online retailers have removed Cohiba & Trinidad inventory.

I just noticed this as well. Was wondering where they disappeared to. 

[nav4040]

Great minds - my exact first thought too. I can’t even imagine the Chinese paying $30 for a minuto. Guess we’ll see how into tack they really are. 
And, to be clear, a 200% price increase would mean the boxes cost $750. 

Over price them, they don’t sell. Discontinue them due to poor sales, bring them back a couple of years later as a regional… profit.


Sent from my iPhone using Tapatalk

[NSXCIGAR]

1 hour ago, SMELTZ said:

They are holding on to Cohiba and Trinidad inventory because they don’t want to loose money selling them at todays prices. Once the standard prices have been set they will be back up again. 

Sure. And that would warrant a temporary price hike for those two brands and of course the typically-limited production cigars like SW and 898. But an across the board major price hike? Insanity.

And Trinidad is very different than Cohiba. During typical production periods there is no shortage of any Trini except occasionally Fundys. And prices for Fundy are actually still quite reasonable. I don't think the market is going to support $900 Fundys. There just aren't that many buyers at that price. There are more buyers of $1,600 Lanceros than there are $900 Fundys. Yet they want to raise Trini prices more than Cohiba? They have seriously misjudged the demand for Trini, and also Cohiba when production resumes it's typical levels.

[AirOne]

That is a crucial point: will ever production turn back to normal ? 

[NSXCIGAR]

8 minutes ago, AirOne said:

That is a crucial point: will ever production turn back to normal ? 

Yes. If it doesn't HSA's revenue will be crushed. They have very little room left for price increases. Keep in mind HSA makes its money on PSD4 and Monte 4 (and cigars like that). Raising prices on those is getting close to killing demand. Prices have already risen ~40% since 2020. Any more and they risk reduced sales. 

As far as Cohiba, they don't sell nearly enough of it to benefit that much from a massive price hike, and of course would consequently sell less absolute units. As I mentioned earlier the gray markets had plenty of Cohiba until 2020. This means supply was exceeding demand for 20+ years at much lower prices than today. 

The only real bottleneck is going to be farmers. If the farmers stop growing HSA revenue plummets. If there are no rollers leaf piles up and revenue goes down but at least if the farmers grow other crops no leaf piles up and they'd have the other crops. No rollers is a complete disaster and I don't see that continuing. 

At this point they have to have leaf piling up. The last 5 crops have been above average to excellent. The farmers were planting record hectares. Cuba needs to sell cigars. They're losing enormous revenue. Hiking prices won't help--anyone who knows even the first thing about business would know that and I'm sure they aren't complete idiots at Gemstone. But to invite NCs to just waltz in and snatch permanent gains in market share is just beyond comprehension. 

[timis300]

Haven't been active for a while now, but this has triggered me to resurface.

CORO prices at the local Hong Kong PCC being $60usd/stick, no discounts can be applied

[LordAnubis]

2 hours ago, AirOne said:

That is a crucial point: will ever production turn back to normal ? 

I think they will increase a little bit, but not back to where it was in 2019. Everyone is saying that as price goes up habanos will lose lots of money. Not a chance. As price goes up, there are a shit tonne of buyers waiting to snap up every last cigar. Not most of us here. But there are many buyers out there willing to pay any cost.

Habanos revenue will be 20% higher than 2019 in 18 months from now is my prediction.

On another note.... some vendors have started removing Cohiba and Trinidad from offerings completely... is a new price point about to be deployed?

[ha_banos]

The premium & limited cigars are being promoted to exclusive status - the sales on the volume and regular cigars they probably expect to increase as a result. Which as mentioned above is the bread and butter most of the HSA money comes from.

Standard model no?

[NSXCIGAR]

1 hour ago, LordAnubis said:

I think they will increase a little bit, but not back to where it was in 2019. Everyone is saying that as price goes up habanos iwl lose lots of money. Not a chance. As price goes up, there are a shit tonne of buyers waiting to snap up every last cigar. Not most of us here. But there are many buyers out there willing to pay any cost.

I guess we'll have to wait wait to find out, but the fact remains--they have the leaf. Is it just going to pile up? 

I would also disagree with your assessment of demand. The very fact that a gray market has thrived for 20+ years means distributors can't move all the product they take through retail channels. The distributors are wholesaling that product into gray markets. Why wholesale it if they don't have to? Even Cohiba was plentiful in gray markets with prices half of what they are now. We have to assume retailers were selling at the highest prices they could regardless of what the distributor charged them. The market still put downward pressure on prices. 

I'm old enough to remember when almost all Rob's offerings on 24:24 were still available hours after they posted. Now it's only a couple boxes of each cigar and he's not even running it on Mondays. So even though prices have never been higher and Rob sells out everything in 5 minutes do you think his revenue is up? I highly doubt it. 

There aren't that many people with unlimited money. How many people in this thread alone have already said they'd move to NCs before paying $450 for PSD4 let alone $2,000 for Esplendidos or $500 for 12 Trini Media Luna? As I pointed out cigars like PSD4 and Monte 4 drive the majority of HSA revenue. Those are "everyday" type cigars for everyday people. When you have high quality NCs for half the price or less I wouldn't underestimate the motivation to move away from CCs. 

I just don't see how it's possible for revenue to recover with production this far below baseline. They just can't sell enough $2,000 boxes of Esplendidos or BHK to make any real impact on revenue. 

If they really do implement this harebrained pricing scheme and production doesn't recover to 2019 levels I can't see any way revenue can be anywhere close to its 2015-2019 levels. 

 

52 minutes ago, ha_banos said:

The premium & limited cigars are being promoted to exclusive status - the sales on the volume and regular cigars they probably expect to increase as a result. Which as mentioned above is the bread and butter most of the HSA money comes from.

Standard model no?

I don't think stratifying the super premium product is going to affect standard product in any way. Those are two different types of buyers. Only a very small group buys Esplendidos or Monte 1935 or BHK regularly. 

Again, the gray market tells us there has been downward pressure on prices forever. Yes, as long as supply is at current levels they can get away with raising prices but HSA revenue will take a massive hit. I just don't see how this is a winning formula for them, in addition to potentially losing market share to NCs which may not be recoverable. 

[ha_banos]

Perhaps is 5% of the people by 50% of the premiums, the other 95% buy 50% of premiums. And now those 95% are buying regular production, which is bread and butter, so profits go up and HSA control the supply of premiums accordingly. Premiums are exclusive and given to further the exclusiveness. Like the watch market etc.

HSA profits go up, exclusives remain in the stratosphere.

caveat: I know nothing about these flashy markets  The only 'flashy' things I have are a few cigars and even then not the flashy ones!!! lol!

[SCgarman]

6 hours ago, NSXCIGAR said:

Yes. If it doesn't HSA's revenue will be crushed. They have very little room left for price increases. Keep in mind HSA makes its money on PSD4 and Monte 4 (and cigars like that). Raising prices on those is getting close to killing demand. Prices have already risen ~40% since 2020. Any more and they risk reduced sales. 

As far as Cohiba, they don't sell nearly enough of it to benefit that much from a massive price hike, and of course would consequently sell less absolute units. As I mentioned earlier the gray markets had plenty of Cohiba until 2020. This means supply was exceeding demand for 20+ years at much lower prices than today. 

The only real bottleneck is going to be farmers. If the farmers stop growing HSA revenue plummets. If there are no rollers leaf piles up and revenue goes down but at least if the farmers grow other crops no leaf piles up and they'd have the other crops. No rollers is a complete disaster and I don't see that continuing. 

At this point they have to have leaf piling up. The last 5 crops have been above average to excellent. The farmers were planting record hectares. Cuba needs to sell cigars. They're losing enormous revenue. Hiking prices won't help--anyone who knows even the first thing about business would know that and I'm sure they aren't complete idiots at Gemstone. But to invite NCs to just waltz in and snatch permanent gains in market share is just beyond comprehension. 

I had previously mentioned the farmers in an earlier post. Since they are barely making any profit from growing tobacco, what is to say that they don't just say F-it and grow food crops instead. The whole country is in a famine due to lack of adequate food. Farmers say the Cuban government doesn't pay them enough money for their tobacco for them to make any semblance of a good living. At what point do they just "quit"? Can they be forced to grow tobacco? You can't eat tobacco leaves to replace the lack of food on the island! 

[MrBirdman]

34 minutes ago, SCgarman said:

I had previously mentioned the farmers in an earlier post. Since they are barely making any profit from growing tobacco, what is to say that they don't just say F-it and grow food crops instead. The whole country is in a famine due to lack of adequate food. Farmers say the Cuban government doesn't pay them enough money for their tobacco for them to make any semblance of a good living. At what point do they just "quit"? Can they be forced to grow tobacco? You can't eat tobacco leaves to replace the lack of food on the island! 

It’s possible. They’ll do what all farmers do - grow what they can earn the most cash with (beyond what they can consume themselves). I know Cuba pays crap for tobacco but who knows if they pay any better for food? They’re a mess right now, even by their own standards it seems. 

[LordAnubis]

Just wondering. If Cuba wil reduce ultra premium volume. More tobacco will go to regular stuff right? So Monte 4s and JLPs with  cohiba quality tobacco in em. Seems like wins all round for us regular folk. 😂