Habano News: Habanos could downsize some markets by 50% this Year

[MrFolgers]

 

[cigaraholic]

He ought to call it Habano Cigar Lighter. For me, it’s difficult to watch him light his cigar 4 times and never take a puff.

[NSXCIGAR]

Everything's going to China. Has to come from somewhere.

[Arabian]

11 minutes ago, NSXCIGAR said:

Everything's going to China. Has to come from somewhere.

Hey.. you had it for a while, let the ship sails somewhere else 😆.

[MrBirdman]

So Habanos is directing stock to the distributors they own, and therefore PCC is among those getting the short end if this is correct. Just when supply seemed to be getting a bit better. Oh well!

[Hammer Smokin']

I don't know why I clicked that video. Infuriating. Cigar posers. 

[VeguerosMAN]

I have been watching this youtuber for a while and he has been wrong more often than right. 

[JohnS]

These are some of the articles cited in the video linked in this thread...

AN EXPANSION AT THE WRONG TIME

La Casa del Habano's ninth franchise in Switzerland is opening in Montreux this summer. It is already the fourth this year. Meanwhile, the Cubans are cutting back on deliveries.

On January 20, the sixth La Casa del Habano in Switzerland opened in the Hotel Alpchalet Bellevue in duty-free Samnaun. This is a franchise company of Corporación Habanos S.A. in Cuba. Licensees must meet strict requirements. In addition to a walk-in humidor, a lounge and customer compartments are also required. Behind La Casa del Habano in Samnaun are two experienced entrepreneurs, Kevin Woolf and Maurice van Vliet. While Woolf already operates two Casa franchises in the Caribbean with his company Fumas Group, van Vliet owns - among other things - a duty-free shop in the duty-free zone of Heligoland.

A few weeks later, the seventh franchise celebrated its opening in Zug. And from April 26, the second La Casa del Habano in Ticino will welcome Cuban cigar lovers in Mendrisio. Behind the establishment are Sofia Belfasto and Alain Proietto from Cigar Must. The two already run a highly successful La Casa del Habano in Lugano.

Meanwhile, in Montreux, the second La Casa del Habano in French-speaking Switzerland, the ninth franchise overall, is in the starting blocks. It should start at the beginning of summer. Tony Hoevenaars, head of Intertabak AG, is behind the massive expansion. His calculation: The more Las Casas del Habano there are in a market, the better the country will be supplied with Havanas. At least as far as specialties like Ediciónes La Casa del Habano or Ediciónes Limitadas are concerned, that has been the case until now. Meanwhile, the strategy could prove to be a shot in the oven.

At the end of March it was announced that Habanos SA, the marketing and sales organization for Cuban cigars, would cut deliveries to countries whose distribution structures were not 100 percent in their hands. Several markets are affected by this, including Switzerland. Habanos owns 50 percent of Intertabak AG, with the Villiger and Lévy families sharing the other half.

At the beginning of April, Intertabak informed its customers in writing about the worsening prospects. According to those responsible, it is not yet clear how many fewer Havanas will actually find their way to Switzerland in 2024. “We understand what is happening and hope that the situation for Switzerland will improve in the future so that we can return to a normal situation as quickly as possible,” says Hoevenaars. It is also clear that La Casa del Habano's stores will enjoy priority when it comes to deliveries. New franchises are no longer being planned. And of course Habanos will continue to strive to provide the best possible delivery.

N.B. Translated from German to English

Source: https://www.cigar.ch/themen/aus-der-branche/eine-expansion-zur-unzeit/

[JohnS]

BREAKING Habanos SA pushes on independent distributors: fewer cigars for Switzerland, Asia and the Middle East

Par La rédaction, le 30 April 2024

Distributors not fully owned by Habanos expect deliveries to be down 30 to 50% compared to last year.

According to our sources, several Havana distributors which are not 100% owned by Habanos SA have been informed that their deliveries would be significantly reduced from this year.

The Havana-based group has decided to favor distributors which are 100% under Cuban control (like Coprova in France, Laguito 1492 in Benelux or Tabacalera in Spain) to the detriment of independent distributors (Phoenicia, Pacific Cigar) or structures in which Habanos SA partners with another group (Intertabak AG in Switzerland).

“This will mainly affect Phoenicia, Intertabak and Pacific,” confirms a well-informed source. The affected importers were informed by Habanos a few weeks ago. One of them, however, tells us that negotiations are still underway.

Our sources also tell us of tensions between Habanos SA and Villiger group with which it is associated for Fifth Avenue Trading, exclusive importer of Cuban cigars in Germany.

30 to 50% fewer deliveries

On condition of anonymity, representatives of these distributors told us that the announced drop in deliveries was around 30 to 50% compared to last year.

These revelations shed light on the mail sent in mid-April by the Swiss importer Intertabak to its customers and which we obtained: “Until recently, we had every reason to be optimistic about the improvement in the availability of Habanos in 2024, writes Tony Hoevenaars, Managing Director of Intertabak AG. However, the latest news we have received is less favorable than that communicated to us so far and, to our great regret, we must expect lower volumes than in 2023.”

Source: https://www.cigars-connect.com/en/breaking-habanos-sa-pushes-on-independent-distributors-fewer-cigars-for-switzerland-asia-and-the-middle-east/

[JohnS]

Intertabak AG struggles for Cuban cigar supply in Switzerland

April 24, 2024

Cuban cigars, a symbol of pleasure and luxury, are facing a challenge in Switzerland. Habanos SA, the Cuban government-run organization responsible for the worldwide export of these exclusive products, will significantly reduce deliveries to markets where it does not have full control over distribution. Switzerland, which is known for its fondness for these cigars, is also affected by this measure. In May 2020, it was announced that the shareholder of Habanos S.A., the tobacco group Imperial Brands, had sold its shares to a Chinese consortium for 1.225 billion euros.

Reduced deliveries despite significant participation

Habanos SA holds a 50 percent stake in Intertabak AG. The remaining shares belong to the local Villiger and Lévy families. Intertabak AG handles imports into Switzerland and the Principality of Liechtenstein. As Habanos S.A. does not hold 100% of the shares in Intertabak AG, the Swiss market will be confronted with reduced supplies of Cuban cigars as a result of Habanos S.A.'s new strategy.

Information policy and ongoing uncertainty

Intertabak customers were informed of the worsening supply bottlenecks at the beginning of April. It is currently still unclear how much deliveries from Havana will actually decrease in 2024. However, La Casa del Habano stores in Switzerland are not exempt from this tightening. This uncertainty is unsettling the trade. The reasons for this have not been explained to the specialist trade. This is understandable, as Intertabak AG certainly does not receive all the information from Habanos S.A. either.

Possible long-term consequences

Habanos SA's restrictive supply policy could lead to lasting changes on the Swiss market and worldwide, which is already facing global challenges such as stricter health regulations. The pressure on Habanos SA and its trading partners is growing.

Source: https://www.zigarren.zone/en/intertabak-ag-struggles-for-cuban-cigar-supply-in-switzerland/

[NSXCIGAR]

7 hours ago, MrBirdman said:

So Habanos is directing stock to the distributors they own, and therefore PCC is among those getting the short end if this is correct. Just when supply seemed to be getting a bit better. Oh well!

I believe HSA owns a share in every distributor. I think this is just outright shifting of product to the Chinese market at the expense of other markets by the new Chinese owners. 

I just see this as making de jure what is already de facto. They're just calibrating what is to what will be. Below supply for these markets will now officially be standard supply levels.

[Arabian]

9 hours ago, NSXCIGAR said:

I believe HSA owns a share in every distributor. I think this is just outright shifting of product to the Chinese market at the expense of other markets by the new Chinese owners. 

I just see this as making de jure what is already de facto. They're just calibrating what is to what will be. Below supply for these markets will now officially be standard supply levels.

I'm not sure about Phoenicia, Mohamed Zeidan mentioned that his company didn't even sign a contract with Cubatabaco and then Habanos in the late 70's and a handshake was enough to form this partnership. Pioneers in developing the 1st LCDH walk-in humidor at Beirut airport, luxury cigar soiree that perhaps dwarfs the ones in Cuba, covering massive regions. I hope this is nothing but a rumor, no business in their right mind does this.

[MrBirdman]

1 hour ago, NSXCIGAR said:

I believe HSA owns a share in every distributor. I think this is just outright shifting of product to the Chinese market at the expense of other markets by the new Chinese owners. 

I just see this as making de jure what is already de facto. They're just calibrating what is to what will be. Below supply for these markets will now officially be standard supply levels.

Yes I believe that’s the case, but the impression I got was that they’re shifting to distributors they own outright or have larger shares of. Again, no idea if this is actually true just the impression I got from this guys video, though if HSA is looking to maximize the cash it brings in then it would make sense - if only in the short term. 

[NSXCIGAR]

14 hours ago, MrBirdman said:

Yes I believe that’s the case, but the impression I got was that they’re shifting to distributors they own outright or have larger shares of. Again, no idea if this is actually true just the impression I got from this guys video, though if HSA is looking to maximize the cash it brings in then it would make sense - if only in the short term. 

I wasn't aware that HSA owns any greater portion of Infifon than any other distributor or whether the new owners have any interest in Infifon. 

[MrBirdman]

45 minutes ago, NSXCIGAR said:

I wasn't aware that HSA owns any greater portion of Infifon than any other distributor or whether the new owners have any interest in Infifon. 

Me neither, just seems to be what he is saying. Again, no idea whether this guy has a clue what he’s talking about. 

[Partyshrts]

I just care about how it effects the Grey Market. Thoughts?

[wjs]

I only care what this means for the host & 24:24

[NSXCIGAR]

On 5/5/2024 at 8:10 PM, Partyshrts said:

I just care about how it effects the Grey Market. Thoughts?

Gray market has been a shell since early 2022. Almost all gray market stock came from European and PCC overstock and the word overstock had disappeared from distributors' vocabularies for all except the duty free specials like RyJ tubos and Partagas Habaneros that distributors are forced to take to get the premium products. 

As I said, I think the damage to these markets has already been done. For example I doubt the Swiss market is going to be getting 50% less stock than they're getting today. I think they had been getting 50% of what they expected for over 2 years and this policy shift is simply codifying permanently the existing situation. 

[helix]

Handing the shortfall to the NC market on a silver platter. 

[El Presidente]

14 hours ago, NSXCIGAR said:

Almost all gray market stock came from European and PCC overstock 

Spain, Middle East, European minnows, Central and South America accounted for the majority. 

14 hours ago, NSXCIGAR said:

For example I doubt the Swiss market is going to be getting 50% less stock than they're getting today.

Depends how the cards are played. You will know in 6-8  weeks. There is no talk of two years ago, only current. This is a very aggressive game that is being played out. 

It is no wonder Habanos pulled out of the September Dortmund show 

[BrightonCorgi]

Will there be any Habanos buying vacation destinations beyond Cuba at this point? How's Andorra looking? Beirut Duty Free shows next to nothing in stock.

[NSXCIGAR]

2 hours ago, El Presidente said:

There is no talk of two years ago, only current.

If these markets get 50% less stock than they have today then close up the shops. They surely realize they can't sell cigars unless people are in business to sell them. 

What percentage would you say PCC has been at since early 22? 

[El Presidente]

2 hours ago, NSXCIGAR said:

If these markets get 50% less stock than they have today then close up the shops. They surely realize they can't sell cigars unless people are in business to sell them. 

What percentage would you say PCC has been at since early 22? 

Since early 22?, zero or damn close to zero.

[SCgarman]

16 hours ago, NSXCIGAR said:

Gray market has been a shell since early 2022. Almost all gray market stock came from European and PCC overstock and the word overstock had disappeared from distributors' vocabularies for all except the duty free specials like RyJ tubos and Partagas Habaneros that distributors are forced to take to get the premium products. 

As I said, I think the damage to these markets has already been done. For example I doubt the Swiss market is going to be getting 50% less stock than they're getting today. I think they had been getting 50% of what they expected for over 2 years and this policy shift is simply codifying permanently the existing situation. 

Wasn't the Swiss market one of the largest? Almost all of the grey market vendors had their stock in Swiss warehouses. Switzerland was even called the Cuban cigar capital of the world. So the Chinese market gets the bulk of stock and all the other markets get the shaft? Talk about putting all your eggs in one basket. What do these LCdLH's sell? FWIW they will look like Rolex watch AD's. Lotsa glitzy retail space with no product to sell. What a winning business model! 

[NSXCIGAR]

1 hour ago, El Presidente said:

Since early 22?, zero or damn close to zero.

Well, that's a bit of an exaggeration. But it makes my point. How could stock be reduced a further 50% from near zero?