Los Angeles – The sometimes boring torrent of statistics coming from the U.S. Customs Service concerning imports of premium cigars helps to show where the American market is headed and the impact of the continuing harassment of smokers.
For August, the numbers show a slightly weaker market than during each of the past two years, but not at any alarming rate:
=> Overall imports of premium cigars totaled 24.88 million, down 5.2% from the 2009 figure of 26.25 million and down 11.1% from 2008’s 28.04 million total. For the first eight months of the year, total premium-cigar imports into the U.S. totaled 158.52 million, down 16.4% from the SCHIP-impacted 2009 total, but more significantly also down 7.7% from the 2008 total of 171.02 million.
=> The Dominican Republic led the import totals as usual, with 10.24 million premium cigars exported to the U.S. in August, down about 10% from 2009’s August figure. For the first two-thirds of year, Dominican premium imports to the U.S. stand at 68.02 million, way down from the 93.41 million from 2009 (SCHIP-impacted), but very close to the 2008 figure of 69.32 million. That’s good.
=> Nicaragua is now the no. 2 exporter of premium cigars to the U.S., sending 7.75 million in August, slightly down from the 8.30 million in 2009, but ahead of the 2008 total of 7.38 million. For the first eight months, Nicaraguan premium imports totaled 53.99 million, well ahead of the 48.34 million in 2009 and 44.85 million in 2008. Yet another record year, the seventh straight, seems assured for Nicaragua.
=> In Honduras, premium-cigar exports to the U.S. totaled 6.61 million in August, ahead of 2009’s figure of 6.34 million, but short of the 2008 total of 8.29 million. For the first eight months, Honduran premium exports were 35.37 million, way down from 2009 (45.93 million) and 2008 (51.13).
=> Small amounts of cigars came into the U.S. from the Bahamas (Graycliff), Mexico (mostly Te-Amo and related brands), the Phillippines and Costa Rica. Still, the three leading nations combined for 98.9% of all premium cigars imports into the U.S. in August.
Based on these figures, projected 2010 imports of premium cigars will reach about 240 million, the lowest figure since 1995. However, if fourth-quarter reports of shipments are stronger – as they have been in recent years – the total could approach 260 million, perhaps a bit better than expected.
The strong performance of machine-made cigars continues unabated, however. Imports of machine-made cigars both large and small totaled 231.60 million in August, up 15.5% over the 2009 figure of 200.54 million. For the year through August, machine-made imports are up a staggering 25.1% over 2009, at 1.53 billion against 1.22 billion. That’s amazing – almost 10 times the premium volume, not including U.S. production from market leaders Swisher International and John Middleton – and illustrates why Swedish Match contributed its General Cigar premium division to the joint venture with Scandinavian Tobacco and kept the machine-made division.
Executives of the major cigar companies are now knee-deep in holiday promotions and getting retailers stocked for the end-of-year buying season. But once these programs are fully in motion, more than a few of them will be considering not only how to attract cigarette smokers to cigars in 2011, but how to convert a growing number of machine-made smokers to their premium lines.
>> An already busy “cigar festival season” just got busier with the announcement of the first Humo Jaguar Festival in Honduras, to be held from 13-18 February 2011.
The event is sponsored by the Honduran Association of Tobacco Growers and Cigar Makers (APROTABACOH) and the Honduran investment and promotion ministry FIDE, with Altadis U.S.A. already signed on as a major sponsor of the event.
The program is offered in two parts, similar to the Dominican ProCigar Festival: a first stage will begin in San Pedro Sula and focus on the ancient Mayan city of Copan and the Altadis U.S.A. factory at Santa Rosa de Copan from February 13-15, then move to the national capital at Tegucigalpa, where a tobacco trade fair and trips to cigar factories in Danli and tobacco fields in the Jamastran Valley are on the agenda from the 15th to the 17th.
It’s the first Honduran cigar festival and will be the third cigar mega-event in February, after the fourth ProCigar Festival in the Dominican Republic (February 6-11) and the 13th Festival del Habano in Havana, scheduled for February 21-25. Yes, an enterprising enthusiast could take in all three!
According to the Humo Jaguar Festival announcement, the cost for attendees is $1,250 U.S. per person, not including airfare to Honduras, but including accommodations, meals, tours and plenty of cigars.
With this new program, all of the world’s major cigar-producing nations will have a public-invited festival, with the Nicaraguan cigar-makers association holding their first event last December. It’s a good move for Honduras, which has seen its production levels fall in the past couple of years as some makers have shifted their manufacturing emphasis to Nicaragua. Cigars are important in Honduras, as the country’s fourth-biggest export earner ($88 million U.S. last year) and some 20,000 people involved in cigar production.
>> “MPs have revealed radical plans today that aim to cut the smoking rate in half over the next 10 years and make New Zealand a smokefree nation within 15 years.”
That’s the TV New Zealand summary of a Parliamentary committee report released on November 3 that puts forward a series of initiatives to try and make the island “smokefree” by 2025. According to the story, “These include banning the display of tobacco in shops, putting cigarettes and ‘roll your owns’ in plain packaging and extending non-smoking areas to cars.”
Other steps to control the import of tobacco would be undertaken, including the reduction of tobacco imports by a specific amount annually, imposition of annual price increases above the rate of inflation, restricting the number of places where tobacco can be sold, increasing the maximum fine for sales to minors to $10,000 (NZD) and the reduction of duty-free allowances for New Zealanders bringing tobacco into the country from abroad.
A story in the New Zealand Herald noted that “‘smoke-free’ is widely understood to mean a prevalence of 3 per cent or less. Currently about 20 per cent of adults are smokers in New Zealand – but the Maori rate is far higher, at more than 40 per cent.”
Only Finland’s health minister has publicly stated that the goal is to eradicate tobacco completely from an entire country, in their case with a target date of 2040.
While the Parliamentary committee report puts pressure on the New Zealand government to enact some or all of these recommendations, and will likely result in legislation to ban tobacco displays and require plain packaging (at least on cigarettes), the British American Tobacco New Zealand corporate and regulatory affairs chief Susan Jones made a telling point, that the drive to be “smoke-free” overlooks the tiny detail that people who desire to smoke will always find a way to satisfy their interest.
“The only thing we can say with certainty,” she told Stuff.co.nz, “is that, like alcohol prohibition, a ban on tobacco will fuel an already thriving illegal market and create greater profit opportunities for gangs of organised criminals.”
Although the proposals did not call for prohibition per se, Jones said it was prohibition in fact, in all but name. Even the Herald that the report went too far:
“Sensibly, it conceded that most people would not support prohibition as a way of reaching this goal. Even so, its prescription is too radical, and not much of it is ever likely to be enacted.
“The attempt to curb the supply of tobacco is an area that even the most ardent of anti-smoking campaigners have been wary of treading. There are compelling reasons for this.
“While much of the reaction from retailers and the industry to the committee’s report has been self-serving, it is fair to assume that sharply restricting the supply of tobacco would create a black market. Demand would have to be filled illegally. That, in turn, could invite the participation of organised crime.”
Why should Americans care about what’s being talked about in New Zealand? Because the anti-tobacco lobby, egged on by activists at the World Health Organization, is poking and prodding in country after country, to see how far it can go in passing anti-tobacco regulations.
Judging by the November 2 election results, there is little for American smokers to cheer about as smoking bans and ban extensions were passed by wide margins, including a 65%-35% statewide vote to expand South Dakota’s ban to bars and taverns.
At the same time, smokers simply pursuing their interests have caused the national smoking ban in Greece to be confirmed as a failure and on Wednesday, Dutch authorities agreed to modify a total smoking ban in owner-operated cafes of 735 sq. ft. or less, which have no employees. The Netherlands’ ban on smoking in these small pubs caused a public uprising and affects some 2,000 establishments in the small country; the new coalition government will also cancel some 280 existing fines on cafe owners as part of the new legislation.
A report in Britain’s Daily Telegraph noted that “Edith Schippers, the Dutch health minister, promised that bitterly-resented smoking checks in pubs by food and consumer safety inspectors would end.
“The new law will allow consumer choice. A sign will inform customers whether or not they are allowed to smoke on the premises.”
That’s the way it should be.

Comments are closed.