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Shifting Tectonics

Shifting Tectonics

THE world cigar market continues to fascinate; now moving and changing as fast as it has done in generations.

 

The great tectonic plates of Cuban cigar making and those from the rest of the major cigarmaking nations are shifting – and we can see new landmasses being formed right in front of our very eyes.

 

Just this week, Habanos surprised the world with the announcement that it – via its 49 per cent interest in each of the international markets in which it distributes – was going to insist on a broadly similar retail price for Habanos across all worldwide retail, wherever it might be sold.

 

Leaving distributors and retailers scratching their heads about how all this will play out, Habanos SA, the state-controlled company responsible for the worldwide distribution and marketing of Cuban cigars, is trying to claw back some power by levelling up the playing field.

 

While the exact details of this remain unclear, the premise is to redress the imbalance in pricing which has led to some countries, where taxation is favourable, becoming little more than fulfilment centres for shipping cigars elsewhere in the world; in particular to the Far East, where demand from wealthy collectors has continued to soar in recent years.

 

Most major retailers have reported a tidal wave of emails, phone calls and even visits in person from affluent Far Eastern buyers; all of them desperate to get their hands on large vitolas and willing, it seems, to pay any price to have them. It has become an inside joke to tease fellow retailers by asking if they have any Cohiba Behikes for sale.

 

But what does all this mean to the ‘normal’ cigar smoker? Those of us who are not necessarily interested in big business, the ins and outs of Cuban politics or the directional flow of world wealth at this current moment of time? Those of us who simply love cigars in all their glorious forms and enjoy the catalogue of styles and flavours which, up until recently, we have been free to sample?

 

Uncertainty is the only definite. We simply don’t know how all this will play out in the longer term, but we can safely assume that the Cuban cigar supply issue that has so crippled international sales in recent times won’t be resolved overnight. The days of London stores with groaning shelves of Habanos won’t be back anytime soon.

 

Having said that, Sautter has been selectively putting aside boxes for years and will continue to serve you as always, although newer lines and sizes are understandably difficult to lay hands on. It is perhaps a good time to be a lover of smaller Cuban cigars, for instance – these remain in relatively good supply.

 

And, of course, the New World cigar market – those made in Honduras, Nicaragua, Dominican Republic and other countries around the equatorial belt which seem to have optimum conditions to grow cigar tobacco – is watching unfolding developments with a gleaming eye.

 

Despite Habanos trying to reclaim some of its mojos, its latest move will ironically play right into the hands of the aforementioned worldwide cigar firms. Cuban cigars are now not only hard to find in any quantity – they will soon be much more expensive in most markets. ‘Average’ smokers – those who like the occasional cigar and who have a limited budget with which to enjoy them – will inevitably continue to gravitate to the new global superpower.

 

The New World industry is not without its problems, of course – manufacturers are reporting huge back orders they are working frantically to fulfil and issues like the availability of boxes and the vast internal market of the USA gobbling up most of the production will continue to cause ongoing disruption across other countries.

 

But, unlike Cuba, where the ultimate leaders of the country’s resources are often high-ranking military officers, New World, privately-owned companies are able to react swiftly and reactively where need to be. They can also command substantial funds for investment in more tobacco fields; larger, more modern factories and more cigar rollers, which Cuba’s overstretched Communist economy simply cannot match.

 

We recommend you remain in close contact with Sautter, through these pages, and our online, YouTube and Instagram discussions to remain informed. And we will continue, as we have always done, to serve and appreciate our customers who simply love a good smoke.

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