Supply Update.

[El Presidente]

Bringing you up to speed 

In summary. 

• Supply levels globally should improve from mid to late July.  Volume of stock will be roughly 50% of 2019 levels.  In terms of breadth, 40% of the portfolio will continue to be unavailable at any one time. 
• Large format cigars will continue to be thin on the ground. 
• 2019 stock levels globally may not be reached until 2025/26 and that is assuming no huccups. 
• There are no scheduled international pricing reviews. All distributors are now on the same buy price regardless of scale. 
• July 30 should see the last of the  countries/regions  changed over to the new pricing regime. 
• Our pricing has been reviewed and will be finalised by early next week. Some wins and some losses. 

[HarveyBoulevard]

Did they like your poll results?

[El Presidente]

11 minutes ago, HarveyBoulevard said:

Did they like your poll results?

Thrilled 

They would like to remind all that they (as distributors) are in the same boat 

 

[Niko8]

Thanks for the update, Rob!

[sageman]

I’ve bought the dip in the market twice now and still losing! I’ll try my hand again at timing more buys! 🥸

[yossie]

1 hour ago, sageman said:

I’ve bought the dip in the market twice now and still losing! I’ll try my hand again at timing more buys!

LOL!

There're too many factors that We have to consider. Americans may not care but I also have to think of currency rate. Stock market would be easier!

[Hoepssa]

 

All distributors are now on the same buy price regardless of scale -- Habanos 100% owned by Communists.  

[El Presidente]

1 hour ago, Hoepssa said:

 

All distributors are now on the same buy price regardless of scale -- Habanos 100% owned by Communists.  

Flip side.

So must Rolex be

Or Mercedes/Audi/subaru/Honda etc as they roll out locked sale pricing around the world 

[RDB]

Basically sit back and relax, the sky is not falling in. Smoke your stock if you can while things get better. Look for value in the portfolio in the meantime. Prices are not going to improve.

[anacostiakat]

Good info.  Thanks.  Damn that is a long time to fully rebound.  

[Tstew75]

18 hours ago, El Presidente said:

Bringing you up to speed 

In summary. 

• Supply levels globally should improve from mid to late July.  Volume of stock will be roughly 50% of 2019 levels.  In terms of breadth, 40% of the portfolio will continue to be unavailable at any one time. 
• Large format cigars will continue to be thin on the ground. 
• 2019 stock levels globally may not be reached until 2025/26 and that is assuming no huccups. 
• There are no scheduled international pricing reviews. All distributors are now on the same buy price regardless of scale. 
• July 30 should see the last of the  countries/regions  changed over to the new pricing regime. 
• Our pricing has been reviewed and will be finalised by early next week. Some wins and some losses. 

Thank you so much for your timely updates.

You seem to be the only one in the CC community being completely transparent with info (at a time when the community needs it most). Cheers man

[SCgarman]

12 hours ago, El Presidente said:

Flip side.

So must Rolex be

Or Mercedes/Audi/subaru/Honda etc as they roll out locked sale pricing around the world 

Rolex is operated by the Hans Wilsdorf foundation. They don't answer to Communists, share holders, boards of directors or anything else. They only answer to themselves and price their timepieces as they wish. This company is perhaps one of a kind in all the world. Just a little tidbit. 

[HarveyBoulevard]

32 minutes ago, SCgarman said:

Rolex is operated by the Hans Wilsdorf foundation. They don't answer to Communists, share holders, boards of directors or anything else. They only answer to themselves and price their timepieces as they wish. This company is perhaps one of a kind in all the world. Just a little tidbit. 

My company does not answer to communists, shareholders, board of directors, or anyone else either. I guess I am just like Rolex… I only answer to myself and price my services as I wish.

[Corylax18]

13 hours ago, El Presidente said:

Flip side.

So must Rolex be

Or Mercedes/Audi/subaru/Honda etc as they roll out locked sale pricing around the world 

I must have missed the Volkswagen Groups Announcement. I just read their 2021 financial summary and I dont see it mentioned anywhere. (Linked, higher prices, sure, standardized prices, no) How in the world would Volkswagen standardize the price of an A3 manufactured and sold in China to one manufactured and sold in the USA? And more importantly why?  

So livery spec A3's are now going to start at $35k in Cuba? The same price you can get a similar spec'd car here in the states? Come on Rob. Where is that extra $110k going to disappear to? Or is a base A3 going to cost as much as an R8 here now? 

You're in a tight spot. I get it, but you seem to be coming down with a nasty case of Stockholm Syndrome. What's going on in the Cuban Cigar industry right now is not normal, its not justified by the current world conditions, its not logical. Don't let them convince you it is! Haha. 

https://www.volkswagen-newsroom.com/en/press-releases/volkswagen-group-achieves-solid-results-in-2021-and-drives-forward-its-transformation-to-new-auto-7807

 

[El Presidente]

25 minutes ago, Corylax18 said:

I must have missed the Volkswagen Groups Announcement.

 

I am surprised you are not aware of it? 

This is one snippet but there is plenty of information online as dealers globally are fighting the proposed changes.  There are plenty of major brands wanting to go down this route as there are obvious benefits. 

https://www.thetruthaboutcars.com/2022/05/mercedes-ending-dealer-sales-model-in-europe/

https://europe.autonews.com/retail/vw-explores-fixed-price-sales-model-evs-china

Doesn't Tesla run a similar model ?

Communists all of them 

[Bijan]

@El Presidente

I think the harmonized global pricing is what is unique to Habanos.

The set price per country/region is what is done by Tesla and being proposed by VW.

[El Presidente]

1 hour ago, Bijan said:

@El Presidente

I think the harmonized global pricing is what is unique to Habanos.

The set price per country/region is what is done by Tesla and being proposed by VW.

I have a problem with this. 

You are a principal dealer and has spent 30 years building your brand X dealership. 

Merc or Honda or X have a change of plans. 

"as of 2024, we will set the sales price for all our range and accessories. You as a dealer will not be in a position to discount. What we are trying to stop are small regional dealers undercutting major city dealers online and damaging the brand.  This will solve the problem. Take it or leave it."

Sound familiar now?

It is market control pure and simple where the price supplied and price sold is set. 

Here it is being challenged in the courts. 

[El Presidente]

Sound familiar 

 

"Rolex’s goal is to have the same retail prices across the world. But since it is not possible to adjust the retail prices based on today’s currency every single day, the price you will pay for a Rolex watch varies across the world.

Rolex does occasionally increase the retail prices in some markets when a local market has become too much of arbitrage and is much cheaper than most other places in the world.

With that said, it’s difficult to list specific countries where it is the cheapest to buy a Rolex watch in because, in theory, they should have the same retail prices. Furthermore, since the currencies are constantly changing, a country that may be arbitrary today may not be tomorrow."

[Bijan]

I have not had a good experience with car dealerships. Tesla doesn't have dealerships so they are not able to sell in certain states because of the dealership lobby.

Anyways that's a problem between the manufacturers and their dealer networks.

The Rolex case is closer to the Habanos case, in trying to stop arbitrage (while driving up prices to the higher markets).

[LLC]

The real reason to have a global pricing strategy is to control grey market as much as possible (difficult). Normally when a company does this they don’t take the highest priced market in the world as the benchmark. It should be based on their COG, cost to run the business and there expected profit. 
Car companies are interesting as the price between the same car in Canada vs. the US varies widely by manufacture. Actually exchange is around 1.26 as an average the last six months but varies widely on a seemingly constant basis. Lot of companies price their cars 20-30% more in Canada to fully or more than fully account for exchange. Others are around 10% and Porsche which I have recent first hand experience with was only 7% higher in Canada than the US price. They price to the market and average globally to arrive at the desired target. 

[winelover]

Sadly it is like buying fine wine, it never gets cheaper. 

 

[SCgarman]

3 hours ago, LLC said:

The real reason to have a global pricing strategy is to control grey market as much as possible (difficult). Normally when a company does this they don’t take the highest priced market in the world as the benchmark. It should be based on their COG, cost to run the business and there expected profit. 
Car companies are interesting as the price between the same car in Canada vs. the US varies widely by manufacture. Actually exchange is around 1.26 as an average the last six months but varies widely on a seemingly constant basis. Lot of companies price their cars 20-30% more in Canada to fully or more than fully account for exchange. Others are around 10% and Porsche which I have recent first hand experience with was only 7% higher in Canada than the US price. They price to the market and average globally to arrive at the desired target. 

Aren't American made vehicles such as full size pickups significantly more in Canada primarily due to Canadian government taxes? That is what I was told by a citizen when we were visiting the country.

[GoodStix]

True.  Our tax burden is a significant drain on quality of life.  Generally speaking, earnings are better and taxation less in many — not all — US states.  Over my lifetime, many of my friends have moved to the States for this very reason.  Smart bastards 😉

[Corylax18]

15 hours ago, El Presidente said:

I am surprised you are not aware of it? 

This is one snippet but there is plenty of information online as dealers globally are fighting the proposed changes.  There are plenty of major brands wanting to go down this route as there are obvious benefits. 

https://www.thetruthaboutcars.com/2022/05/mercedes-ending-dealer-sales-model-in-europe/

https://europe.autonews.com/retail/vw-explores-fixed-price-sales-model-evs-china

Doesn't Tesla run a similar model ?

Communists all of them 

AAAHHHH. People have been talking about removing slimy car dealers from the car buying process for Decades. That's all this is, and I doubt it goes much of anywhere. I would be more than happy if the entire car dealership system world wide was razed, scam artists and leaches. Google Carvana

BUT, these articles very specifically talk about set pricing in ONE market. (China) Not world wide, homogenized pricing. Two Very, Very different things. The other article mentions a 10-20% reduction in # of European dealerships, again, no where near world wide, homogenized pricing. What HSA is doing and what is described in these two articles are Massively different plans, with massively different goals and affects on the market place. Direct me to the line if I missed it, but I saw no mention of world wide Mercedes price increases to match their new non dealer pricing in Europe or that All VW EVs world wide will be priced at China $$ now. These two articles really don't have much/any context in this discussion.

Besides all that, I'm surprised you would be stumping for a system that would essentially remove you from the equation. If HSA adopted the model indicated in the articles you posted their would be no more distribution network. HSA would open its Own B&M's and its Own Website to become the SOLE provider of cigars, in the world, in each country, whatever. I cant believe that's what you actually want? That actually sounds like a worse plan that what they've got now, but they're both bad. 

[Chibearsv]

17 hours ago, El Presidente said:

I have a problem with this. 

You are a principal dealer and has spent 30 years building your brand X dealership. 

Merc or Honda or X have a change of plans. 

"as of 2024, we will set the sales price for all our range and accessories. You as a dealer will not be in a position to discount. What we are trying to stop are small regional dealers undercutting major city dealers online and damaging the brand.  This will solve the problem. Take it or leave it."

New car pricing isn't a fair comparison to a one time use and completely disposable purchase like cigars.  As a percentage of total profit, car dealerships make very little money if any on the sales of new cars.  Pricing doesn't really matter as long as the marketplace is ok with the pricing and keeps the inventory moving.  Dealers make their hay in servicing, finance, body shop, and in used car sales where the manufacturers have far less if any control over the dealer's pricing decisions.