Embargo ?

[KB24]

I am one who feels that the embargo will not be lifted any time soon. I think that Obama will ease up on the restrictions to Cuba but that a complete lift will not take place in the near future. In thinking recently about if it does get lifted and Habanos begin to pour into the States, isn't it guaranteed that the amount of fakes will drastically increase in the states? If any old B&M is permitted to sell cubans, isn't it safe to say that the lesser popular or shops that carry cigerettes, weed pipes, rolling papers etc. would just stock their cigar shelves with fakes? The average Joe would not know if he was smoking a Cohiba Lancero or a CAO LX2 Lancero. Don't you think that there would even be stores that purchased genuine boxes of let's say CoRo's and took the bands off and placed them on some CAO, RyJ Dom, or AVO Robustos and sold them for $30 a pop?

I think Habanos S.A. would have to have some sort of Vendor list or begin to open LCDH's in the major cities in the US such as NYC, Los Angeles, Chicago, etc so that they could guarantee authenticity. I just cannot envision walking into the local liquor store and purchasing a RyJ Churchill or Monte #2.

Thoughts?

I can just see walking into a cigar shop and it being lined with cuban boxes and them all being fake and people going crazy to buy them because they have not the slightest idea.

[Ginseng]

I believe Rob presented his very reasonable take on the scenario that will ensue up to and after the lifting of the Embargo. Just can't seem to find it right now. No doubt, controlling the distribution channels will be essential to establishing any sort of functioning, legitimate Habanos business in the U.S. The situation around counterfeits is a little less clear in my mind. First of all, Altadis, General Cigar, etc. are going to have to straighten out the trademark issues (i.e., NC Montecristos v C Montes) and who knows how long that will take and what things will look like.

For sure, there is much to speculate about and many scenarios to consider. Through it all, though, one message has been a constant: buy what you love now.

Wilkey

[perfectform]

I believe Rob presented his very reasonable take on the scenario that will ensue up to and after the lifting of the Embargo. Just can't seem to find it right now. No doubt, controlling the distribution channels will be essential to establishing any sort of functioning, legitimate Habanos business in the U.S. The situation around counterfeits is a little less clear in my mind. First of all, Altadis, General Cigar, etc. are going to have to straighten out the trademark issues (i.e., NC Montecristos v C Montes) and who knows how long that will take and what things will look like.

For sure, there is much to speculate about and many scenarios to consider. Through it all, though, one message has been a constant: buy what you love now.

Wilkey

Interesting you bring up the trademark issues...I once read speculation that the Edmundo Dantes brand was created for eventual renaming of the Cuban Montecristo brand after the embargo is lifted and trademark wars ensue...

[Ginseng]

Interesting you bring up the trademark issues...I once read speculation that the Edmundo Dantes brand was created for eventual renaming of the Cuban Montecristo brand after the embargo is lifted and trademark wars ensue...

That would make some sense...if the owners of the Habanos trademark believed that 1) their ability to win ownership of the trademark in U.S. courts is not great or 2) it would be less costly/damaging overall with respect to market entry to abandon that tm in the U.S. and develop a new one entirely. I don't know enough about international trademark law to know if BT could still used "Montecristo" worldwide for the products they produce (Habanos) while the U.S. owners of Montecristo could use it for their non-cuban-made cigars. I just don't know. The cost of developing a totally new brand, especially one to replace the historical and sales juggernaut that is Montecristo, I imagine, would be staggering both in terms of dollars and years.

I suppose that one possibility has them working out some sort of cross-licensing either with or without royalties.

Wilkey

[gwags]

Interesting you bring up the trademark issues...I once read speculation that the Edmundo Dantes brand was created for eventual renaming of the Cuban Montecristo brand after the embargo is lifted and trademark wars ensue...

I think the travel restriction being rescinded is a no brainer. As a newbie, the trade embargo being lifted sounded great. However, there will be many issues with CC's when it happens. Fakes, price/taxes, casual buyers will be taken advangtage of by bad vendors. It will make it easier for sure but at what cost? Knowing your vendor will still be critical as ever!

[perfectform]

That would make some sense...if the owners of the Habanos trademark believed that 1) their ability to win ownership of the trademark in U.S. courts is not great or 2) it would be less costly/damaging overall with respect to market entry to abandon that tm in the U.S. and develop a new one entirely. I don't know enough about international trademark law to know if BT could still used "Montecristo" worldwide for the products they produce (Habanos) while the U.S. owners of Montecristo could use it for their non-cuban-made cigars. I just don't know. The cost of developing a totally new brand, especially one to replace the historical and sales juggernaut that is Montecristo, I imagine, would be staggering both in terms of dollars and years.

I suppose that one possibility has them working out some sort of cross-licensing either with or without royalties.

Wilkey

Staggering indeed, good term for that. It would literally be the end of an era if that took place. It's fun to speculate but I think we have a long way to go yet.

[joeypots]

One Swiss vendor told me hat if the embargo is lifted he thought that demand for Havana cigars in the States could put such a strain on the business that quality would suffer for years. Embargo years cigars would then become prized by aficionados and high prices could be had in the secondary market. Of course, this bit of information came from a guy who wanted to sell me cigars.

[Habanos2000]

Don't worry about the embargo being lifted any time soon. There's too much political pressure from the Cuban American community to let that happen without some form of compensation coming their way for the land and businesses they lost when Castro took over. Right or wrong, that's the reality of it.

[Colt45]

I believe Rob presented his very reasonable take on the scenario that will ensue up to and after the lifting of the Embargo.

Yes, if I recall correctly the general gist was that there is tobacco in reserve, additional fields that can be planted, and that

distributors worldwide have already been warned that they will lose part of their alottments to the U.S. market.

Oh, and prices will rise.....

[Ginseng]

Yes, if I recall correctly the general gist was that there is tobacco in reserve, additional fields that can be planted, and that

distributors worldwide have already been warned that they will lose part of their alottments to the U.S. market.

Oh, and prices will rise.....

How ironic! Just thinking about how much of their present allotment already goes to the U.S. If they lost, say 20%, then current American customers would find it that much harder to obtain product from their existing vendors. And I'd hazard to guess that the pricing through authorized U.S. channels would not be nearly as favorable on this redirected product as it is through the existing distributorships today. Prices cannot help but to go up I'd think.

Wilkey

[Colt45]

How ironic! Just thinking about how much of their present allotment already goes to the U.S. If they lost, say 20%, then current American customers would find it that much harder to obtain product from their existing vendors.

Very good point. In the end, I think this is one of those questions that no amount of speculation will satisfy -

we'll only know the answer when it actually happens.

[SethG]

Some things are clear, some things a little more murky.

Cuban's in America: They're no longer a workable voting block, see 2008 elections. And in any case they have fractured massively with many (if not most) supporting lifting the embargo with minor concessions. that's my understanding, someone from Miami can correct me.

Brand's: As I understand it, Altadis owns the Montecristo name and trademark and through Altadis USA controls it in the USA. Altadis owns 50% of Habanos SA, meaning there is no conflict, the trademarks are already fine and established.

Fakes: I don't anticipate any outside of NYC, the US is very good at enforcing trademark disuptes. Fakes sold in bars are untaxed, that's a minor problem. Sold on open streets during a a tax-revenue crisis? Not going to happen.

Distribution: Habanos currently has one major distributor per country, as I understand it but could be wrong. All of the cigar dealers acquire from the distributor, I imagine one would be assigned to the US immediately.

LCDH: Faster than you can say "Hard rock Havana" there will be an LCDH in LA and NYC. The question is, who owns and operates them? I've actually thought about doing it myself with some friends and it's something that I'll probably bring up at the Habanos festival in February. I think if you have an LCDH to sponsor you and a cigar shop here to extend the license, then the guy with the right friends and right numbers will get the first LCDH license, after all it's not an *EXCLUSIVE* license.

Embargo: i think it will end, possibly in the next 12 months. The law it stands on is very murky, small easings in the law are most likely impossible. Meaning yea, or nay. I think what will happen is that a general pressure will rise, watch for the media to start doing exploratory "What's the point" reporting and "Look at the lovely Cuban people, oh how they suffer." If public reaction is positive, and let's face it people don't give a damn about the embargo, then I expect an excuse to be found.

I would watch for the media, if they start pushing it then keep an eye on the next hurricane season. A major one blows through cuba and that will be the excuse to drop the embargo to open trade with the people that need us the most and allow americans to donate directly to people in need.

[SethG]

Also, I would imagine the issue of fakes in the US could easily be solved with technology. Weave an RFID chip into a band at the back where the label is joined, produce the label to be nearly uncutable and then join them on the cigar with vegetable glue at the RFID point. The US distributor would manufacture the bands and then go to Cuba with them and apply them to US bound sticks.

In the US the RFID's would be scanned at every sub-destination point and then put into an available web database. The RFID's are impossible to produce because they require large-scale manufacturing techniques for which there is already plenty of legitimate revenue, and we would encode the serial number into the RFID but first encrypt and sign it with the private encryption key of the distributor. Meaning the code is readable but not signable.

The RFID bands get scanned into each distribution point including when the truck reaches the city of destination and possibly the store, the website then allows you to punch in your serial number and it'll pop up the tracking information to the city you are in. What does this mean in practicality? That fakes, if they managed to reband sticks, could only be resold in the city they originally ended up in (without arousing suspicion) and in reality would be linked to the box they came in.

A lot of this stuff is trivial, the total cost of such a system? Probably 25 cents a stick (10 or less per band, rest in infrastructure), the reason the cubans can't do this is the technology embargo. And maybe they just don't care. But guess what, the US distributor will.

[stargazer14]

FYI - Here is the earlier post from last month, I asked a similar question regarding what will happen to cigar sales in the us:

http://www.friendsofhabanos.com/forum/inde...showtopic=95797

"Um, yes, could I have a bottle of rubbing alcohol, 3 ribbed Trojans, and that Cohiba Book too, thanks."

[stargazer14]

One Swiss vendor told me hat if the embargo is lifted he thought that demand for Havana cigars in the States could put such a strain on the business that quality would suffer for years. Embargo years cigars would then become prized by aficionados and high prices could be had in the secondary market. Of course, this bit of information came from a guy who wanted to sell me cigars.

Collectors can break their stock into 3 catagories now:

Pre -embargo, Embargo, and post embargo.

Start stocking up now!

[CoventryCat86]

I agree with Rob that it won't be lifted anytime soon. That being said, I don't think at all about what will happen if the Act if lifted. I also don't bother wondering what I'd do if I were to go to the moon since that ain't happening either.

[SethG]

I agree with Rob that it won't be lifted anytime soon. That being said, I don't think at all about what will happen if the Act if lifted. I also don't bother wondering what I'd do if I were to go to the moon since that ain't happening either.

That's because the only thing you should be focusing on is getting that damn Cape Breton Festival of Speed back into action. Think globally, act locally.

Then I'll show up and bring lots of sticks to reward the effort.

[Ken Gargett]

I agree with Rob that it won't be lifted anytime soon. That being said, I don't think at all about what will happen if the Act if lifted. I also don't bother wondering what I'd do if I were to go to the moon since that ain't happening either.

i agree that it is very hard to see the embargo being lifted any time soon. perhaps a few token cosmetic adjustments but nothing substantial. only chagne to that would be if the politicians suddenly decided it would get them votes. don't expect it for the good of either the cuban or american people.

i think that the usa wants cuba to make concessions, whether by way of fair elections, or whatever. when raul makes a visit to chavez his first priority on taking power, that was just one big 'shove it it up your posterior' to the states. i suspect that many in the old guard in cuba would be terrified of the embargo being lifted. they'd be swept away in the changes. which makes it all the more stupid that the states keeps it in place.

[Padrino]

only chagne to that would be if the politicians suddenly decided it would get them votes. don't expect it for the good of either the cuban or american people.

Well if they do end the embargo or try to do a "Chavez" on Castro's brother the very idea of those vulgar McDonalds golden arches in old Havana would make my skin crawl. But such is the price to be paid for "democracy" (whatever that supposedly is these days).

[gostgost]

I agree with Rob that it won't be lifted anytime soon. That being said, I don't think at all about what will happen if the Act if lifted. I also don't bother wondering what I'd do if I were to go to the moon since that ain't happening either.

I can see many things restriction being lowered but a complete lift would require act of Congress not just the President of the US.

[Ken Gargett]

Well if they do end the embargo or try to do a "Chavez" on Castro's brother the very idea of those vulgar McDonalds golden arches in old Havana would make my skin crawl. But such is the price to be paid for "democracy" (whatever that supposedly is these days).

agreed. let us hope for a balance but i'm not holding my breath.

[SethG]

Well if they do end the embargo or try to do a "Chavez" on Castro's brother the very idea of those vulgar McDonalds golden arches in old Havana would make my skin crawl. But such is the price to be paid for "democracy" (whatever that supposedly is these days).

I understand the sentiment, and please don't take this as criticism, but understand that some Cuban's don't even get a full meal every day. They have to pay a half of a week spay sometimes to get just a litre of milk. I imagine that most cuban citizens would feel very different about some magical place where for the price of pocket change they can come with their children and eat beef, potatoes, hell even Apple Pie if they want, mixed in with milk shakes, so much all-you-can-drink-refill sodas that they fall over.....

Again, no offense intended, but McDonald's is often very american in that it speaks of cheap consumerism, but it's also an american expression of "Eat, get fat, cheap." A way of life that is really unfathomable in places where people can't even choose to eat their fill. I wish upon everyone that they should have enough in their lives to dislike McDonald's.

There's a great blog on their daily life, written in spanish and again in english.

http://www.desdecuba.com/generaciony/

http://www.desdecuba.com/generationy/

[Ken Gargett]

I understand the sentiment, and please don't take this as criticism, but understand that some Cuban's don't even get a full meal every day. They have to pay a half of a week spay sometimes to get just a litre of milk. I imagine that most cuban citizens would feel very different about some magical place where for the price of pocket change they can come with their children and eat beef, potatoes, hell even Apple Pie if they want, mixed in with milk shakes, so much all-you-can-drink-refill sodas that they fall over.....

Again, no offense intended, but McDonald's is often very american in that it speaks of cheap consumerism, but it's also an american expression of "Eat, get fat, cheap." A way of life that is really unfathomable in places where people can't even choose to eat their fill. I wish upon everyone that they should have enough in their lives to dislike McDonald's.

There's a great blog on their daily life, written in spanish and again in english.

http://www.desdecuba.com/generaciony/

http://www.desdecuba.com/generationy/

i suspect you'll find that should the golden arches and their ilk establish themselvs in cuba, they will be priced for tourists, not locals. i think that there might be some major inequalities to rectify before they start scoffing big macs.

[Padrino]

I understand the sentiment, and please don't take this as criticism, but understand that some Cuban's don't even get a full meal every day. They have to pay a half of a week spay sometimes to get just a litre of milk. I imagine that most cuban citizens would feel very different about some magical place where for the price of pocket change they can come with their children and eat beef, potatoes, hell even Apple Pie if they want, mixed in with milk shakes, so much all-you-can-drink-refill sodas that they fall over.....

No offense taken and understand your point of view. In the country i'm presently in, up until 15 years ago the majority of the population were under extremely oppressive minority rule. When freedom eventually came along with the right of every single individual regardless of colour/creed to vote and move around freely, hope was at an all time high.

Big business came into the country (along with the Golden Arches kind of stereotype) and to cut a long story short the only ones to profit from this new found economic and social freedom were the "connected" businessmen and the partnerships they found in the new government. Unemployment numbers are higher, crime is through the roof, the poor are poorer, and a small minority of "businessmen" hold the monopoly for just about everything. The inequalities are still there.

It is in our human nature to destroy ourselves through violence, greed and any other innovative way we can come up with. The Cuban people have been oppressed for so long by the very individuals that were there to supposedly set them free, it's like some sick joke.

Who can honestly say what the future holds but I just hope common sense prevails, although that said it seems common sense is not that common anymore.

[Ken Gargett]

No offense taken and understand your point of view. In the country i'm presently in, up until 15 years ago the majority of the population were under extremely oppressive minority rule. When freedom eventually came along with the right of every single individual regardless of colour/creed to vote and move around freely, hope was at an all time high.

Big business came into the country (along with the Golden Arches kind of stereotype) and to cut a long story short the only ones to profit from this new found economic and social freedom were the "connected" businessmen and the partnerships they found in the new government. Unemployment numbers are higher, crime is through the roof, the poor are poorer, and a small minority of "businessmen" hold the monopoly for just about everything. The inequalities are still there.

It is in our human nature to destroy ourselves through violence, greed and any other innovative way we can come up with. The Cuban people have been oppressed for so long by the very individuals that were there to supposedly set them free, it's like some sick joke.

Who can honestly say what the future holds but I just hope common sense prevails, although that said it seems common sense is not that common anymore.

other than a bare minimum handful who may jag a job, you can bet london to the proverbial brick that the arrival of such businesses will do bugger all for the people of cuba.