The worldwide distribution of premium tobacco is in Chinese hands, which monopolizes the market even at the origin and empties the cellars of tobacconists. Demand far exceeds supply and vitolas like Cohiba or Trinidad have tripled prices
The cellar of Eduardo Navarro Basabe, in the 168 store in Barcelona, is subject to the iron dictatorship of temperature and humidity. There they mature the cigars, the end product of the Creole plant that other hands previously collected in Pinar del Río or Viñales, the tobacco epicenter of the Caribbean. Sanctuaries of aromas like yours are not experiencing their best moment, as in Spain and in the rest of Europe. Two years ago, in the midst of a pandemic, the distribution of premium vegueros -handmade- changed hands and what was once a universe linked to luxury has become, pure and simple, an inaccessible redoubt for ordinary people. An example. Those who liked to buy a good meal and a reserve at a Cohiba have gone from paying €22 for a robust -124 millimeter exceptional tobacco, with a ring size of 50 and a weight of 12 grams, from €60 to €60. found in the tobacconist, because these vegueros, it is the reality, disappear from the scene.
“The worldwide distribution of Havana cigars has been a matter for the Chinese for some time now and the price is set by Hong Kong,” said Maribel González, president of the Association of Tobacco Entrepreneurs and Merchants (ECOT), directly pointing to the sale. by Imperial Brand of the premium division previously owned by Spain’s Altadis to a group of investors, “the only ones who could overcome the Cuban veto”. The island’s communist government has few allies and even fewer who have money, the expert sums up. China is the most important and also the only one that could afford what it took to acquire 50% of Habanos SA
The problem is that the Asian giant, where ever-increasing fortunes are emerging, has far greater demand than what his government allows him to enter – it’s a protectionist market – which has had an unexpected effect: thousands of Chinese – or people in wages of the new capitalists – buying cigars or other premium resources around the world. “The result is much greater demand than supply,” says Eduardo Navarro, who is increasingly used to dealing with ‘personal shoppers’ combing tobacconists across Europe and monopolizing the market while supplies last. This eagerness has been tapped into by companies such as the Dominican Vega Fina, which despite not working with cigars, enjoys prestige and has already opened a factory in China, La Gran Muralla, to get around the restrictions on foreign products.
“The Havana vitolario has 27 brands and the price increase is not the same for all references,” says Jerónimo Conejo Blázquez, from Badajoz, whose Cava Real has just been voted the best in Spain by La Casa del Tabaco. «For example, you can buy a Partagás Series D nº5 for 12 euros. The problem is you place orders with the distributor and you never know what will come in the bag: a Hoyo de Monterrey here, Romeo y Julieta there… I just ordered ten boxes of Montecristo Open Eagle and there are only two arrived”. «There is a lot of speculation -they warn them from the Catalan shop-. A ‘lookout’ from Trinidad, together with Cohiba the top brand that used to cost 15 euros, now comes out for no less than 50 euros; and the box I I used to get for 500-600 euros, now costs me 1,650. What has changed? Nothing except the price,” he berates. “Some strange things happen, like receiving boxes with a stamp date of 2021 as if they are from now, when they told me at the time that there was no gender.”
A change in strategy that Navarro Basabe attributes to the entry of the new investment group. “There is a production of 90 million premium cigars and they want to make the money they spent profitable as soon as possible. Because they know they’ve sold everything, they double and triple the price, and the rest of us can only accept it».
However, the entry of an emerging economy like China is not the only factor contributing to shaping the current scenario. Cuban production is shrinking, as evidenced by the fact that it has increased from 32,000 tons of leaf tobacco to 22,000 in just five years. Of Tabacalera, they state that “this is not a factory where you just have to push a button to make more nails. Las Vegas de Habanos gives what they give and the influx of new customers has changed the market».
Several factors have influenced this situation. The first is the extreme need of a country where the severity of the blockade is exacerbated by supply difficulties due to the pandemic. “In Cuba, people are hungry, that’s the reality, Maribel González says, and there are farmers who use their land to grow food instead of tobacco.”
This scenario has several derivatives. Its plantations lack ‘ligero’, a leaf of great strength, slow burning, giving it a stronger flavor and without which it cannot be aged (aged). There’s also not enough wrap, the leaf that wraps the cigar, “and you can’t finish the product without it.” The industry is starting to suffer from a different kind of shortage. “There are no boxes or rings -the vitolas-, no tubes or references to market the product”, Maribel González sums up.
Spanish tobacconists also appreciate drying problems and lack of fermentation. “It’s a problem that comes from demand. If I only have one oven in the kitchen and they ask me for fish all the time, I end up taking it out. Well, here it is the same: they speed up the fermentation and as a result the tobacco arrives too raw. You have to mature in the cellars so that the cigar reaches its ideal point». So things are starting to look shadows over the quality controls, “which are much stricter in places like the Dominican Republic or Nicaragua where, maybe because they don’t have such a good product, cooking is better,” explains Navarro Basabe.
The current drift has shaken the very foundations of the cigar. “There is not enough labor or tobacco, freight rates are rising and as a result the demand is much greater than they can handle,” summarizes the ECOT president. “The merchandise comes out with a dropper and at astronomical prices that few except the Chinese can afford. Consequently, long-standing brands that were synonymous with luxury have become a priceless item.
According to official sources, tons of tobacco leaf were collected in the Cuban fertile plains during the last harvest, compared to the 32,000 tons recorded just 5 years ago.
million cigars Cuba produces every year. In 2011, they accounted for 72% of the premium market, handmade cigars. Now Nicaragua gets 240 million and the Dominican Republic 190.
euros costs a robust Cohiba in him estanco, the triple that is a luxury item in 2019. The increase is even more pronounced for brands such as Trinidad, which has gone from 15 euros to 50 euros.
The result was not long in coming. The rising cost of the most prestigious Cuban vitolas and the decline in quality have caused a shift in the market. “For years, the cigar is not what it used to be,” says González. It doesn’t have the strength or aroma of yesteryear; it also doesn’t take that long and that’s because they put less tobacco in it so it shoots better and the result is that it burns faster».
Faced with this situation, the tobacconists diversified their cellars for quite some time and gave access to origins that played the role of second best, but which have given the current situation the place they deserve. “Why wasn’t more premium from the Dominican Republic, Nicaragua and Honduras sold? In the past, the usual expression was ‘For 3 euros more I buy a cigar’. But that’s over. If the Cohiba costs 66 and the tobacconist offers me another one for 15 or 17 that satisfies me, sooner or later people try another origin,” says Conejo Blázquez.
This is what is happening and what explains why the premium world, far from sinking, is diversifying. «As with cigarettes, we have all seen a clear decline -concludes Navarro Basabe-. With cigars, perhaps because of scarcity, my turnover increased by 45%. But it is that in pure premium (multiple origins) that increase was 67%. And that’s no coincidence.”
There was a time when Altadis, born from the merger of Tabacalera and the French Seita, had a large number of factories in Spain. Today there is only one left, in Solares (180 direct jobs), aimed at making mechanized cigars, and whose production is destined for Germany, Spain, France, Greece, Portugal or the United Kingdom.
They also make cigarettes in Tenerife with local partners, ‘partners’, as the Canary Islands work as a third country for tax purposes and the price of the tariffs makes another formula unfeasible (the same happens with Philip Morris for example). Extremadura is home to one of the largest tobacco centers in the EU. Its production is taken over by the listed company CETARSA (from Sepi, although Altadis has a 20% stake).
Cigarettes are the most heavily taxed product on the market, more than hydrocarbons or alcohol (duties and VAT represent 80% of the price of a pack). However, the pressure they are putting on Altadis has more to do with the climate of growing prohibition, now even proposing to ban consumption in open spaces such as terraces, or the bill proposing to limit the sale of vapers to tobacconists .
Source: La Verdad
I’m Wayne Wickman, a professional journalist and author for Today Times Live. My specialty is covering global news and current events, offering readers a unique perspective on the world’s most pressing issues. I’m passionate about storytelling and helping people stay informed on the goings-on of our planet.
