Vendor Supply Chains & Inherent Risks

[NSXCIGAR]

9 hours ago, Bijan said:

Presumably they're a grey market vendor mainly because Tabacalera is not supposed to sell/redistribute abroad or online. So it would be hard to have them confirm. And then no way for them to confirm they are MF's sole supplier.

But they could confirm if they are even a client at all. Supposedly MF is based in Spain. You can't know who else MF gets their product from but do they even get anything from their distributor? 

[Bijan]

29 minutes ago, NSXCIGAR said:

But they could confirm if they are even a client at all. Supposedly MF is based in Spain. You can't know who else MF gets their product from but do they even get anything from their distributor? 

They also ship out of Spain, but i think they're technically a Swiss vendor (I could be wrong). In any case they have no physical retail shop fronts (at least not in Spain, again I could be wrong) so there is no allowed use case for them to be buying from Tabacalera.

[NSXCIGAR]

3 minutes ago, Bijan said:

They also ship out of Spain, but i think they're technically a Swiss vendor (I could be wrong). In any case they have no physical retail shop fronts (at least not in Spain, again I could be wrong) so there is no allowed use case for them to be buying from Tabacalera.

So is being a B & M required for distributor relationship? If so then it should have been clear MF's claim about being 100% distributor supplied (according to @Fugu--I have not scoured their site to find that claim) was always inaccurate. They shouldn't be getting any product from either Tabacalera or Intertabak. 

[Bijan]

4 minutes ago, NSXCIGAR said:

So is being a B & M required for distributor relationship?

In Spain which is a market that to my undetstanding doesn't allow selling abroad (or possibly even online), I think it would be... So Tabacalera is out.

Intertabak is the importer for Switzerland I think, so that claim is less questionable.

[Fugu]

10 hours ago, NSXCIGAR said:

If so then it should have been clear MF's claim about being 100% distributor supplied (according to @Fugu--I have not scoured their site to find that claim) was always inaccurate.

Correct, I haven’t found it either. My information was based on a promo (a “review” actually) done by a site called bespokeunit.com after a google search for Montefortuna (article dated 22.03.22, so pretty recent). This does rather sound like an interview or editorial advertising. So I took it they got the information directly from MF. But true, you cannot find such a claim being made explicitly on MF’s website (at least I haven’t).

Here’s the relevant bit, were it is particularly about their trustworthiness, and the article for more “interesting” info, as for their affiliation, warehousing etc.:

“By working only with official Habanos distributors, Montefortuna guarantee the authenticity of every cigar in their stock.”

https://bespokeunit.com/cigars/where/montefortuna/

[Lunettesman]

They claim to be swiss based. But how come swiss people never could order? Another big red flag for me. 

[Bijan]

46 minutes ago, Lunettesman said:

They claim to be swiss based. But how come swiss people never could order? Another big red flag for me. 

The internet Swiss vendors ship out of bonded warehouses (like FOH). To sell domestically they have to add on taxes. FOH does do so, but not all vendors want to deal with that.

Also there may be different licensing or permit requirements for selling domestically.

At least one Canadian vendor sells overseas but not to Canadians.

[Lamboinee]

6 hours ago, Fugu said:

But true, you cannot find such a claim being made explicitly on MF’s website (at least I haven’t).

What could be done even if they made a material misrepresentation? I always figured the average consumer would have little practical recourse against such a company beyond disputing the charge with a credit card company. I'm not sure what remedy is available for an international transactions like this. Hypothetically (for other yanks) I'm curious if a US citizen could even sue a company in US courts for providing fake Cubans that would otherwise be violating the embargo if they had been real.... This problem of how to sue for breach of contract related to the purchase of CCs is as vexing to me as trying to figure out whether the embargo or just regular supply chain issues have a larger impact on the US supply of Cubans. 

[Cairo]

1 hour ago, Lamboinee said:

What could be done even if they made a material misrepresentation? I always figured the average consumer would have little practical recourse against such a company beyond disputing the charge with a credit card company. I'm not sure what remedy is available for an international transactions like this.

Agreed that this is an issue for the individual consumer.

It was always understood that "trusted vendors" relied on their reputation on-line.  Once the reputation is tarnished they are done.   That is the ultimate "remedy".

[BrightonCorgi]

If Beirut Duty Free is basically empty of cigars, I don't see how anyone else has decent stock.

How's Portmann's or Jimmy's for current stock?

[Hoepssa]

Beware anything from islands side of Spain, especially one reputable vendor now owns a store in Spain but partially owoned by Chinese.

[Fugu]

3 hours ago, Lamboinee said:

I'm curious if a US citizen could even sue a company in US courts for providing fake Cubans that would otherwise be violating the embargo if they had been real....

Legally irrelevant whether embargo or not, whether or not the buyer being US citizen. It’s a breach of contract (perhaps even more than just that...) between two private parties. And they do explicitly ship to the US. It’s their obligation to not ship a falsified product. Place of jurisdiction will probably be Switzerland anyway.

But there’s likely not more to be expected from the buyer’s end than a rescission of contract and a full refund of costs (“Wandelung” in Swiss jurisdiction).

Although I am not totally ignorant with regard to such legal issues due to the job, this is just my layperson’s take on it. I guess the lawyers here on the forum may come up with a more authoritative statement. In particular addressing the US perspective.

Generally, it’s best to get such things sorted and settled outside court anyway. And I suppose this will likely also lie in the very own interest of that particular merchant. MF should do good in getting this settled quickly.

[vladdraq]

Wondering how so many people bought from MF and not one realized they are fakes after smoking one. Why? Are they so good? Or people don't know how a Cohiba should taste? I don't get it. 

[BrightonCorgi]

Just now, vladdraq said:

Wondering how so many people bought from MF and not one realized they are fakes after smoking one. Why? Are they so good? Or people don't know how a Cohiba should taste? I don't get it. 

A lot of people don't want to admit they got beat.  Very self unflattering.  Helps perpetuate many frauds.

[El Presidente]

4 minutes ago, Fugu said:

Legally irrelevant whether embargo or not, whether or not the buyer being US citizen. It’s a breach of contract (perhaps even more than just that...) between two private parties. And they do explicitly ship to the US. It’s their obligation to not ship a falsified product. Place of jurisdiction will probably be Switzerland anyway.

Singapore had a quite famous case in respect to a vendor selling fakes.

Habanos/PCC took them to court over a two year period. The cost was astronomical. 

In the end there was a few months jail time but they were back in business before long. 

The proof required was not that the cigars were fake. The proof required was that the vendor knew that the cigars were fake.

Now that is a lot harder to prove. 

I believe in the end there was close to half a million spent on the case for very little outcome. 

[vladdraq]

3 minutes ago, BrightonCorgi said:

A lot of people don't want to admit they got beat.  Very self unflattering.  Helps perpetuate many frauds.

not sure about that...MF claims they back up their sales. So, if i buy a fake box I absolutely send it back.

[Cairo]

5 minutes ago, vladdraq said:

Wondering how so many people bought from MF and not one realized they are fakes after smoking one. Why? Are they so good? Or people don't know how a Cohiba should taste? I don't get it. 

Actually there were complaints in the Reddit forum earlier this year--but actual "proof" did not come until recently.   These were very good fakes (in terms of packaging) so hard to "prove".

[Fugu]

2 minutes ago, El Presidente said:

Singapore had a quite famous case in respect to a vendor selling fakes.

Habanos/PCC took them to court over a two year period. The cost was astronomical. 

In the end there was a few months jail time but they were back in business before long. 

The proof required was not that the cigars were fake. The proof required was that the vendor knew that the cigars were fake.

Now that is a lot harder to prove. 

I believe in the end there was close to half a million spent on the case for very little outcome. 

But that’s obviously about the TM breach with respect to Habanos (they might be facing this also...). The other issue is the contract breach between seller and buyer, and from my understanding this should be a different case, legally.

[El Presidente]

2 minutes ago, Fugu said:

But that’s obviously about the TM breach with respect to Habanos (they might be facing this also...). The other issue is the contract breach between seller and buyer, and from my understanding this should be a different case, legally.

No doubt. The lawyers here can chime in but you would expect a "make good" provision to be required on the part of the seller. 

 

[foursite12]

Clearly, there are several distinct veins of legal interest, depending on who you are and where you fit in the set of facts.The consumer aims for a monetary remedy that gets them their money back--perhaps plus punitive damages for outrageous behavior in some jurisdictions dependng on applicable law and consumer protections. The intellectual property owners might want to pursue claims for infringement by the offending parties. They might seek monetary damages, as well as orders prohibiting further distribution, etc. There are likely other theories that could be brought by the legitimate product owners and distributors but again, as Rob indicated, knowledge and intent may be key elements and they are hard to prove. Finally, law enforcement, tax and trade authorities will have their own axes to grind. Those cases would be criminal or regulatory in nature with quite different impacts and remedies from the civil claims of private parties, who cannot put people into jail or fine them. Jurisdiction and what location's laws will apply are huge questions in this situation.

[Lamboinee]

11 hours ago, Fugu said:

Legally irrelevant whether embargo or not, whether or not the buyer being US citizen.

Bob Loblaw Esq. says - Technically it (i.e. the embargo) is probably not irrelevant. In the US, contract law generally dictates that a contract entered into for the purposes of thwarting the law is void ab initio. The reasoning is based on public policy considerations or some such sophistry. So a us consumer could not enter a valid contract to usurp the embargo laws.

The only exception I know of to that rule is the doctrine of "Grand-Poo-Bah Smokus Also" which says that everything will be fine if the judge also smokes CCs and you brought him some.

[NSXCIGAR]

3 hours ago, vladdraq said:

Wondering how so many people bought from MF and not one realized they are fakes after smoking one. Why? Are they so good? Or people don't know how a Cohiba should taste? I don't get it. 

I think this issue was isolated to Cohiba and specifically CoRo in this case. Basically, a tainted batch if you will. MF were trusted for a reason, i.e. I'm sure the Siglo I was fine. We're talking about $1200 CoRo so I'm not sure how many people bought that but we're probably talking double digits. A quarter of them probably couldn't tell a real from a fake anyway, another quarter probably put the boxes away. So you're looking at maybe a few dozen people who realized something was wrong. 

[Ford2112]

8 hours ago, Lamboinee said:

Bob Loblaw Esq. says

Maximum Bob?

[Cigar Surgeon]

30 minutes ago, NSXCIGAR said:

I think this issue was isolated to Cohiba and specifically CoRo in this case. Basically, a tainted batch if you will. MF were trusted for a reason, i.e. I'm sure the Siglo I was fine. We're talking about $1200 CoRo so I'm not sure how many people bought that but we're probably talking double digits. A quarter of them probably couldn't tell a real from a fake anyway, another quarter probably put the boxes away. So you're looking at maybe a few dozen people who realized something was wrong. 

There are other confirmed fakes beyond CoRo in the thread and at least one BHK54. So it's difficult to say how far widespread it actually is.

[Fugu]

3 hours ago, Lamboinee said:

Bob Loblaw Esq. says - Technically it (i.e. the embargo) is probably not irrelevant. In the US, contract law generally dictates that a contract entered into for the purposes of thwarting the law is void ab initio.

Indeed, that may be tricky if brought to court in the US. But Kitty Le’Droit Avocat noted, if brought to court in Switzerland, which is the likely place of jurisdiction of the fraudulent/breaching entity (and the likely port of lading) this aspect should develop no relevance.

It wouldn’t harm to carefully check their Terms & Conditions, in particular with regard to US-consignments.