Vendor Supply Chains & Inherent Risks

[BossHogg]

This thread is exactly why my humi is 💯 percent Foh stock only. Thanks Foh Team for being there for all of us 👍 You guys are the best!

[Arabian]

They can always re-brand themselves into something new and start all over again, many businesses do that. it's surprising some people still convinced this seller is legit even after their statement and think this is some sort of witch-hunt.

[NSXCIGAR]

17 hours ago, therealrsr said:

@Ford2112 Montefortuna is now sending emails assuring lost clients that they will double-triple-check all Cohiba orders and take pictures...

They wouldn't need to double & triple check if they were acquiring stock from distributors. I see they haven't learned their lesson. The counterfeiters by now are well on their way to correcting the UV seal and serial deficiencies.

The bottom line is hard to find stock cannot be trusted from any non-distributor sources. That includes all Cohiba, Trinidad and cigars like SW, Monte Especial and Lusi. 

11 hours ago, El Presidente said:

They were certainly not Cohiba Robusto

I guess this rules out any possibility these were stolen legitimate product. Seems like this is a full Chinese operation start to finish tobacco and all. I expect the quality of the seals and boxes will soon be perfect. Gray market Cohiba and Trini and many others are officially toast. 

[PuroDiario]

The Cohiba shortage and such is on its way to not being a thing (either bc they are banding Epis, Monte, and whichever) as Cohibas or bc people are finally spending less. In December in Marbella, in one of the top 10 estancos in Spain there were plenty of boxes of SigloVI, Robusto, Esplendidos, etc. as well as Legados, and more. 
 

while I was there a couple of non-Spanish residents came in to buy boxes and the owner told them he would not sell them more than 10 cigars (their nationality is known to buy in bulk and take them home to resell).

[Arabian]

13 hours ago, NSXCIGAR said:

I guess this rules out any possibility these were stolen legitimate product. Seems like this is a full Chinese operation start to finish tobacco and all. I expect the quality of the seals and boxes will soon be perfect. Gray market Cohiba and Trini and many others are officially toast. 

I wonder if their is a lawsuit incoming and some kind of EU consumer protection jumping in. this is no different or maybe worse than buying a counterfeit LV bag in Geneva.

[Hammer Smokin']

7 hours ago, PuroDiario said:

The Cohiba shortage and such is on its way to not being a thing (either bc they are banding Epis, Monte, and whichever) as Cohibas or bc people are finally spending less. In December in Marbella, in one of the top 10 estancos in Spain there were plenty of boxes of SigloVI, Robusto, Esplendidos, etc. as well as Legados, and more. 
 

while I was there a couple of non-Spanish residents came in to buy boxes and the owner told them he would not sell them more than 10 cigars (their nationality is known to buy in bulk and take them home to resell).

they must have been most confused. 99% of the world would gladly take their money and let them clean them out of supply. 

[NSXCIGAR]

15 hours ago, Arabian said:

I wonder if their is a lawsuit incoming and some kind of EU consumer protection jumping in. this is no different or maybe worse than buying a counterfeit LV bag in Geneva.

I don't know how they can police it. And who are they going to sue? And once these counterfeits are improved to perfection how can they prove they're fake? Taste doesn't cut it. Does Cuban tobacco look different than Chinese tobacco under a GCMS? 

The plain fact is that going forward sought-after cigars can only be purchased at the most trusted of trusted vendors that source exclusively from distributors. 

18 hours ago, PuroDiario said:

while I was there a couple of non-Spanish residents came in to buy boxes and the owner told them he would not sell them more than 10 cigars (their nationality is known to buy in bulk and take them home to resell).

I'm not sure I understand this. First, there is no real flipping of Cohiba going on any more. The Chinese are buying it for personal use. Anywhere and everywhere. I personally know for a fact Siglo VI is being sold to China by certain LCDHs for $3,000 by the case. Whatever the LCDH gets it's going to China. There are standing orders 1000 boxes deep. I suppose some bigwigs will buy it for $4-5,000 but it's the bigwigs that are ordering it and sending buying parties out for it. 

If these Spanish shops are limiting sales to anyone then clearly there's still some kind of shortage. Sitting on product doesn't pay the bills. Not to mention the average Spanish buyer isn't dropping $2,000 on CoRo. If they can move Cohiba at market prices (which the Chinese are happily paying) why do they care who buys it? They shouldn't need to hold back more than a few boxes to keep their few local buyers happy in Spain.

I'm just not sure this is the whole story here.

[Arabian]

1 hour ago, NSXCIGAR said:

 

I'm not sure I understand this. First, there is no real flipping of Cohiba going on any more. The Chinese are buying it for personal use. Anywhere and everywhere. I personally know for a fact Siglo VI is being sold to China by certain LCDHs for $3,000 by the case. Whatever the LCDH gets it's going to China. There are standing orders 1000 boxes deep. I suppose some bigwigs will buy it for $4-5,000 but it's the bigwigs that are ordering it and sending buying parties out for it. 

If these Spanish shops are limiting sales to anyone then clearly there's still some kind of shortage. Sitting on product doesn't pay the bills. Not to mention the average Spanish buyer isn't dropping $2,000 on CoRo. If they can move Cohiba at market prices (which the Chinese are happily paying) why do they care who buys it? They shouldn't need to hold back more than a few boxes to keep their few local buyers happy in Spain.

I'm just not sure this is the whole story here.

The product will move eventually, I remember Eddie from Davidov London saying it's unsustainable and refused to sell all his stock of La Gloria Cubana Britanicas Extra to a Chinese lady with a large backpack (he agreed to sell 5 boxes max) she replied with all or nothing, she went to another known shop and purchased 100 Boxes that she requested initially. I have no idea how could anybody transport this amount of boxes?!. I think Dubai airport started limiting a box per ticket. 

[BrightonCorgi]

2 hours ago, Arabian said:

The product will move eventually, I remember Eddie from Davidov London saying it's unsustainable and refused to sell all his stock of La Gloria Cubana Britanicas Extra to a Chinese lady with a large backpack (he agreed to sell 5 boxes max) she replied with all or nothing, she went to another known shop and purchased 100 Boxes that she requested initially. I have no idea how could anybody transport this amount of boxes?!. I think Dubai airport started limiting a box per ticket. 

There has to be balance.  You cannot just sell it all to one person or the shopping experience for everyone else suffers and the business suffers in the end.

I heard a story about a Russian billionaire who wanted to buy all of the Madeira wine stocks on the island.  The Madeira producers refused even though this would be the biggest windfall on the island's history. 

Sometimes there's more to the business than just a quick buck.

[Hammer Smokin']

sometimes, but clearly not often enough.

[NSXCIGAR]

8 hours ago, BrightonCorgi said:

There has to be balance.  You cannot just sell it all to one person or the shopping experience for everyone else suffers and the business suffers in the end.

I agree--I'm not suggesting they sell all their stock or even a large portion of it to any individual. But 10 sticks? Sounds like there's maybe another reason they don't want to sell to that particular buyer or buyers if you know what I mean.

If you're a B & M in a middle-to-low income market like Spain you don't need to keep that many boxes of high end product on hand. Maybe 10. If you can move 20 boxes at $2-3K in one shot you do it. Like I said sitting on them doesn't pay the bills. 

11 hours ago, Arabian said:

The product will move eventually, I remember Eddie from Davidov London saying it's unsustainable and refused to sell all his stock of La Gloria Cubana Britanicas Extra to a Chinese lady with a large backpack (he agreed to sell 5 boxes max) she replied with all or nothing, she went to another known shop and purchased 100 Boxes that she requested initially

Totally different product. ERs are a different animal and in a higher-income market like the UK will absolutely all move and relatively quickly. No need whatsoever to move tons of product to a single individual. A large B & M like Davidoff might only get 50 or 100 boxes of these and then they're gone forever. Cohiba, as scarce as it is, is still regular production. 

Maybe that large vendor got 200 boxes and had plenty to sell to the one person. Vendors can do what they wish and getting $50,000 in cash right then and there can't really be criticized too much. 

[El Presidente]

4 minutes ago, NSXCIGAR said:

I agree--I'm not suggesting they sell all their stock or even a large portion of it to any individual. But 10 sticks? Sounds like there's maybe another reason they don't want to sell to that particular buyer or buyers if you know what I mean.

If you're a B & M in a middle-to-low income market like Spain you don't need to keep that many boxes of high end product on hand. Maybe 10. If you can move 20 boxes at $2-3K in one shot you do it. Like I said sitting on them doesn't pay the bills. 

 

 

Chinese travel started up again in the past 10 days. 

Highly unlikely those boxes will be on Spanish shelves come end March 

[Bigkahuna]

Chinese seem like locusts. Well closer to Black Friday Walmart shoppers. When you see the clouds of them descending on a shop, run and hide lol

[wathabanos]

On 1/10/2023 at 12:19 PM, Nevrknow said:

Good luck with that. I'm a one and done. But in this case a none and done. 🤣

I'm certainly glad I was never fooled by their 'fancy' website. To me their prices always seemed high anyway...

[Bijan]

26 minutes ago, wathabanos said:

I'm certainly glad I was never fooled by their 'fancy' website. To me their prices always seemed high anyway...

Yeah anything over $150 a box they almost never had good deals. For less popular Marevas and smaller cigars they sometimes had good 2 box deals.

Edit: I always had a bad feeling about them and Cohibas though. I feel Cohiba and random grey market is a bad combination.

[NSXCIGAR]

5 hours ago, Bigkahuna said:

When you see the clouds of them descending on a shop, run and hide

When I see them descending on a shop I run towards the shop as there won't be anything left after. 

Hopefully with Chinese travel down the last 6 weeks there will be some stock in Cuba when I get there next week. 

[PuroDiario]

On 1/12/2023 at 4:44 PM, NSXCIGAR said:

I agree--I'm not suggesting they sell all their stock or even a large portion of it to any individual. But 10 sticks? Sounds like there's maybe another reason they don't want to sell to that particular buyer or buyers if you know what I mean.

If you're a B & M in a middle-to-low income market like Spain you don't need to keep that many boxes of high end product on hand. Maybe 10. If you can move 20 boxes at $2-3K in one shot you do it. Like I said sitting on them doesn't pay the bills. 

Totally different product. ERs are a different animal and in a higher-income market like the UK will absolutely all move and relatively quickly. No need whatsoever to move tons of product to a single individual. A large B & M like Davidoff might only get 50 or 100 boxes of these and then they're gone forever. Cohiba, as scarce as it is, is still regular production. 

Maybe that large vendor got 200 boxes and had plenty to sell to the one person. Vendors can do what they wish and getting $50,000 in cash right then and there can't really be criticized too much. 

I’m sorry but your assessment of how an Estanco owner runs his shop is based on what exactly? And the assumption of how many and why and when they keep boxes is also based on what personal experience or insight? Also lastly, are you at all familiar or have googled the median house price, income level of full time or part time residents in Marbella-Puerto Banus area? 
 

just curious, “if you know what I mean”. 

[NSXCIGAR]

4 minutes ago, PuroDiario said:

I’m sorry but your assessment of how an Estanco owner runs his shop is based on what exactly? And the assumption of how many and why and when they keep boxes is also based on what personal experience or insight? Also lastly, are you at all familiar or have googled the median house price, income level of full time or part time residents in Marbella-Puerto Banus area? 
 

just curious, “if you know what I mean”. 

Your assessment of the Cohiba shortage on its way to "not being a thing" is based on what exactly?

The fact they have a surplus of stock is all I need to know. I wonder how many boxes they would sell to me. 

[ATGroom]

On 1/12/2023 at 9:31 PM, Arabian said:

The product will move eventually, I remember Eddie from Davidov London saying it's unsustainable and refused to sell all his stock of La Gloria Cubana Britanicas Extra to a Chinese lady with a large backpack (he agreed to sell 5 boxes max) she replied with all or nothing, she went to another known shop and purchased 100 Boxes that she requested initially. I have no idea how could anybody transport this amount of boxes?!. I think Dubai airport started limiting a box per ticket. 

Assuming he doesn't tell it different ways on different occasions, I think the details are slightly confused - he mentions somebody asking for 250 boxes of the RE, but the story with the Chinese lady with the backpack is that she wanted 100 boxes of Cohiba Talisman. Not that there wouldn't be a market for LGC BE in China, but the Talisman is a bit more of a stereotypical Chinese flipper cigar. 

If you operate in a volume market with plenty of supply, and the more you sell the more money you make, then absolutely it makes sense to sell 100 boxes to anybody who shows up with a backpack and a black card.

Unfortunately, Eddie operates in a market where he can easily sell every box he can get his hands on, so for him it makes sense to portion them out to as wide a pool of customers as possible to keep people loyal for the days when volume hopefully returns.

[PuroDiario]

3 hours ago, NSXCIGAR said:

Your assessment of the Cohiba shortage on its way to "not being a thing" is based on what exactly?

The fact they have a surplus of stock is all I need to know. I wonder how many boxes they would sell to me. 

After a few other threads getting into similar type of debates with you or reading you do so, I am going to refrain from getting into this one in full with you. Now, before calling it off on my end I will clarify my assessment is based in having grown up in Spain, having relatives and friends that own or owned Estancos, visiting Spain 3x+ a year since I left and buying cigars for myself and a group of 10-15 friends in the US for the last 10 years. Additionally, I travel often to London, Geneva and the like for work where I have built good relationships because I also happen to buy cigars in these places or facilitate coworkers and friends here do. I can tell you, faithfully, that a Estanco like the no1 in La Milla de Oro (the one I referenced) or Jimeno in BCN or some of the other top ones by received allocation of top marcas in the country even before COVID would not have a number of boxes of vitola like Esplendidos and siglo VI for example for long. In this market even less so. I can also assure you that they have a clientele willing to buy their cigars, rather affluent and regular CC smokers, and they prefer that clientele to the guy that comes from Asia/Mars/wherever for the first time to buy 50 boxes. Also, if you know what I mean, you would know Spanish government has limited cash purchases in any retail business (including Estancos) to €1,000 which knowing you would know already of course, clearly defeats the potential range of benefits to a Estanco owner of selling 50 boxes to a rando coming through the doors. They have learned the game now too, after not small suffering lately.
 

So a rational person with a willingness to understand would interpret from my message, I would hope, that:

a) there is more supply coming of premium marcas relative to value ones, etc. now than before if you adjust for how quickly top priced boxes move vs others at current prices (or the old ones for what is worth),

b) that it potentially means they are rolling more % of total leaf available into these premium ones than the others given their capacity to push volume out and the margin these can generate (which I  discussed with you in other thread if I remember correctly?) unless you believe that now a vast majority of the lead qualifies higher than recent history and/or

c) they need to keep their local clientele happy bc at the end of the day those are the guys keeping lights on coming for their packs of Marlboros, their pipe tobacco, and the occasional big night Christmas cigar and the weekly lotto ticket (which the other guys won’t). 

Now, if you know what I mean again, given that you know enough and no need to know more just google or call a estanco and see how many esplendidos boxes you can get. 

🙏🏻