Wow. Supply constraint surprise… hitting home


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Visiting family in Greece and just visited the only casa del habano.  Talk about slim pickings.  Some cohiba panetelas for 15euro a piece, 1, yes only one, Partagas P2; and a few partagas Mille fluers and Romeo and Juliette petit Coronas at about 7 euro a piece.  And basically nothing else.  The walk in humidor now is practically full of non Cubans in huge quantities.  Thankfull for this site making the selection it has available to us.

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58 minutes ago, BrightonCorgi said:

I wonder if in some locales if LCDH franchise owners have legal recourse?  Habanos is basically putting them out of business on purpose.

Just to be super cynical and plop a tinfoil hat on top of my head: if I'm this person and I'm basically going out of business due to lack of supply and being choked by my supplier(potentially intentionally), and I'm not overly worried about legal recourse because I'm violating a franchise agreement with a company in a country with limited international power, and I'm say in a country that doesn't give too much of a care about gray markets, and I'm a LCDH so who is going to question me... I can get supply.  I could have my shelves suddenly flush with product. Just a thought.

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1 minute ago, JustDave said:

Just to be super cynical and plop a tinfoil hat on top of my head: if I'm this person and I'm basically going out of business due to lack of supply and being choked by my supplier(potentially intentionally), and I'm not overly worried about legal recourse because I'm violating a franchise agreement with a company in a country with limited international power, and I'm say in a country that doesn't give too much of a care about gray markets, and I'm a LCDH so who is going to question me... I can get supply.  I could have my shelves suddenly flush with product. Just a thought.

Gray markets are pretty thin too and subsequently pricing is sky high. From a risk / reward scenario its better to go NC like many LCDH have done. 

As many have said before cuba is giving the NC cigar industry the ultimate opportunity to take market share. 

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The reception of non Cubans at least in Greece has been mixed from what I have told.  I am sure the prices contribute as well.  Most are double the price if not more than you can find in the US.  And I can understand it.  At some point all I smoked was Cubans.  When I finally expanded my range it took me a long time to get used to some blends, especially Nicaragua.  My initial experience deviated so much from what I was used to, that I didn’t touch another Nicaraguan puro for some time.

I will be trying some of the other cigar shops in Athens to see if things are better.  In meantime I guess I will have to field everyone’s questions on what I am smoking.  Non Cubans have a flair for labels and I am surprised how many so far have noticed it enough to start a conversation about it.

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1 hour ago, JustDave said:

Just to be super cynical and plop a tinfoil hat on top of my head: if I'm this person and I'm basically going out of business due to lack of supply and being choked by my supplier(potentially intentionally), and I'm not overly worried about legal recourse because I'm violating a franchise agreement with a company in a country with limited international power, and I'm say in a country that doesn't give too much of a care about gray markets, and I'm a LCDH so who is going to question me... I can get supply.  I could have my shelves suddenly flush with product. Just a thought.

By the end of this year, LDCH's will make more money selling NC's than Habanos. 

Let's say supply is almost normal, but at the new pricing.  Could LCDH's say something similar to the affect of "Your product is now out of line price wise to make a viable business under franchise guidelines."

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2 hours ago, benfica_77 said:

Gray markets are pretty thin too and subsequently pricing is sky high. From a risk / reward scenario its better to go NC like many LCDH have done. 

As many have said before cuba is giving the NC cigar industry the ultimate opportunity to take market share. 

Absolutely! How long can these LCDH shops stay afloat without any stock to sell? (Habanos) not NC's? I would think if stock levels don't improve by the end of this year, you will see many close their doors. Let's face it, customers want to buy Cuban marcas at a LCDH, not NC's

FWIW they are no doubt selling NC's out of necessity. 

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If I can move away from cigars briefly, at Dubai Airport, the Rolex counter is staffed with a team of 2, but they don't have any watches whatsoever to sell, so I asked them what they do all day, and they couldn't really say anything.  

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2 hours ago, winelover said:

If I can move away from cigars briefly, at Dubai Airport, the Rolex counter is staffed with a team of 2, but they don't have any watches whatsoever to sell, so I asked them what they do all day, and they couldn't really say anything.  

Rolex same situation. Nothing in display cases in AD's world wide. The few watches received are kept in the safe and saved exclusively for VIP's. 

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47 minutes ago, SCgarman said:

Rolex same situation. Nothing in display cases in AD's world wide. The few watches received are kept in the safe and saved exclusively for VIP's. 

And many nice alternatives becoming available. Look at the moonswatch

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2 hours ago, SCgarman said:

Rolex same situation. Nothing in display cases in AD's world wide. The few watches received are kept in the safe and saved exclusively for VIP's. 

I walked by an AD over the weekend in California and their exterior case display was completely full of Rolex watches.  

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49 minutes ago, bates40 said:

I walked by an AD over the weekend in California and their exterior case display was completely full of Rolex watches.  

Go back and ask how many are for sale. They are likely "display only" pieces so customers can have the opportunity to try something on. They aren't for sale

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6 hours ago, SCgarman said:

Absolutely! How long can these LCDH shops stay afloat without any stock to sell? (Habanos) not NC's? I would think if stock levels don't improve by the end of this year, you will see many close their doors. Let's face it, customers want to buy Cuban marcas at a LCDH, not NC's

FWIW they are no doubt selling NC's out of necessity. 

An LCDH under the licensing agreement cannot sell NC.  Throw that rule out the door :rolleyes:

You do what you have to do to keep the doors open and the shelves relatively filled. 

There is little chance Cuban stock levels will improve significantly in the next 12 months. On the ground (Havana), the situation is worse now than 6 months ago. 

LCDH owners fall into a few categories. Few are pure enthusiasts who loved Cuban cigars. Unfortunately they will be the ones to fall.  

 

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Do you think FoH might start knocking out a few select NC's to accompany the Nudies?

There are definitely some very enticing products or there that have me interested but it's hard to navigate exactly where to buy from, be great if you were able to offer them alongside whatever dribs and drabs Habanos decides to slip out of the factory.

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13 hours ago, benfica_77 said:

Gray markets are pretty thin too and subsequently pricing is sky high.

Or gray markets are thin because prices are sky high. All these prices are coming from HSA. Distributors are probably being very cautious taking on extra product. No extra product, no gray market supply. I still think whatever supply is in the gray market had been hoarded early this year. 

It's being reported there is Siglo VI all over the place in Cuba not being sold (as nothing is being sold due to the computer system). Would it have been kept in Cuba if distributors were ordering it? I don't think so. 

The situation isn't going to change until stock starts piling up in Cuba and with production still below 50% it's going to take a while. All the while NCs increasing market share...

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On 7/26/2022 at 2:49 PM, SCgarman said:

Go back and ask how many are for sale. They are likely "display only" pieces so customers can have the opportunity to try something on. They aren't for sale

Will do this weekend, albeit without the wife as she has been trying to negotiate for one. 

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7 hours ago, Arabian said:

take her to Cartier... she might change her mind 😉 those tank watches are beautiful. 

I had a Pasha which I was going to give to her, but unfortunately lost it in a Champagne fueled bender.

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