JRCigars blog

Entries Tagged as cigar industry

Happy Birthday

September 17, 2014 · By · No Comments

While last year marked the 10th anniversaries of both Tatuaje and My Father cigars, this does seem to be the year of birthdays.  Manuel Quesada and his family marked 40 years in business earlier this year with the release of their 40th anniversary line. The 40th anniversary cigars used a nice dark San Andres wrapper over Dominican binder and a combination of Dominican and Nicaraguan fillers.  These were limited cigars with a box press, but the good thing is the same cigars, albeit in different shapes, will be available on an ongoing basis.

La Flor Dominicana is celebrating its 20th anniversary. Ernesto Perez Carrillo is marking 5 years, which doesn’t sound like much but when you consider this is Ernie’s second (or third) time around.  He began with El Credito and his father back in 1977 working out of the little Miami factory.  While the Carrillos made El Credito, they also started making an old Cuban brand, La Gloria Cubana.  The success of La Gloria helped the company grow, to the point that in 1999, Perez-Carrillo sold it to Swedish Match.  Swedish Match eventually bought General Cigar and merged the El Credito factory into its Dominican operations.  Ernie stayed with General until 2008 when he retired.  But by the next year, Ernie opened EP Carrillo cigars in the Dominican Republic.  His Tabacalera La Alianza is now marking its 5th birthday.  Perez-Carrillo makes the E-Stunner, the popular Inch line of cigars including this year’s special Inch Short Run and the New Wave Connecticut.

The company with the biggest birthday this year though is Padron, which is marking its 50th year.  Starting in 1964 Jose Orlando Padron started selling his first cigars.  The first cigars the company made were medium fill but soon Padron was making cigars in Nicaragua.  The company’s backbone is the Padron series.  The 3000 is their biggest seller and during the cigar boom, Padron did not hike prices and kept stores with product, earning a lot of respect from tobacconists.  Even today, the Padron Londres retails for under $4.  The Padron’s ventured into the high end premium market with what was called the Anniversario (today called the 1964 anniversary series).  Going a bit up the scale, Padron brought out the 1926 series to mark the 75th birthday of Jose Orlando Padron.  5 years later, the 1926 80 years came out to mark his 80th birthday.  The Padrons also have the Family Reserve Series which was rated 94 in 2013.  This year the family is putting out the 50th anniversary cigar as part of the Family Reserve Series in a 5” x 54 size.  Cost is $25.  There is another cigar the company is making but in very limited quantities.  It comes in a special 50th anniversary humidor which we showed you from the show.  The cost for the humidor and cigars is $5,000.

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No CommentsTags: cigar industry · new cigars

General Grows Again

September 15, 2014 · By · No Comments

Last Thursday, General Cigars announced its latest acquisition —Toraño Family Cigars.  In a way this is a logical extension for the company.  Scandinavian Tobacco Group in 2007 first bought CAO from the Ozgener family.  The cigars were made in the Toraño factories in Esteli.  The next year, STG purchased Toraño’s factories in both Nicaragua and Honduras. But the Toraño brands were not part of that deal except that STG helped with the distribution of the cigars.  In 2010, STG merged with Swedish Match in a joint venture that rolled everything into the General Cigar umbrella.  At that time, Toraño took back distribution of the family brands.  Toraño has a rich history, dating back to 1916. 

“There is a long-standing and proud history of partnership between General Cigar and Toraño, dating back to my family’s exodus from Cuba. There is no other company that I would rather have continue my family’s legacy, and I look forward to seeing the Toraño brands prosper under General Cigar’s expertise,” said Toraño president Charlie Toraño.

When Charlie’s grandfather was in Cuba, he sold tobacco to the Cullman family when it owned General Cigar, then when he fled Cuba in 1960, it was Ramon Cifuentes and General Cigar who gave him his first U.S. job growing Connecticut tobacco which he had been doing in Cuba before his exodus.

Says Dan Carr, president of General Cigar,

 “The acquisition of the Toraño brands represents an opportunity for us to strategically expand our portfolio. Our companies have been intertwined for over 50 years and I look forward to working with Charlie Toraño on plans to celebrate the upcoming centennial and to carry forward the vision, passion and innovation that is synonymous with the Toraño name while also leveraging our resources to bring even greater excitement and reach to our trade partners and consumers.”

Both General and Toraño say the blends of the current lines will remain the same.  My guess is this is a win for both companies in that General gets another line that can be sold overseas (remember the trademarks for Cohiba, La Gloria Cubana, Punch and Partagas are for the U.S. market only, Cuba has them elsewhere)  and Toraño gets wider distribution.  The deal was kept fairly secret…even Jack Toraño, Charlie’s cousin who worked for the company, said on Facebook he had no clue.  The fast changeover also begs the question of what happens to Sam Leccia’s lines.  Toraño had been his distributor for his Luchadore, Leccia White and Leccia Black cigars.  Sam says he is working to set up a new distributor. 

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No CommentsTags: cigar industry · General Cigar

No Exceptions

September 02, 2014 · By · No Comments

Who couldn’t have seen this coming?  Well probably most of the cigar industry.  In many talks with people about smoking bans and why we should always fight them, often many of the people in the business will say, I won’t be affected….I will get an exemption.  When you point out that exemptions may be only temporary things, they often scoff.

In Nebraska they aren’t scoffing anymore.  Last Friday the state Supreme Court struck down exemptions to the state smoking law as unconstitutional. Surprise.

In Friday’s ruling, Judge Kenneth Stephan, writing for the majority, said there is no substantial difference in circumstances between cigar bars and other public places or workplaces that justifies treating them differently.

An Omaha pool hall was fighting the ban trying to get the law scrapped.  Instead, now it is worse.  But the pool hall now says, at least the playing field is leveled.  Yeah everyone is gonna be in the basement.  I hope the pool hall goes out of business.

According to news reports the court decided the exemptions were contrary to the legislature’s initial intent to ban smoking from the workplace.  Nevermind that the legislature changed the law to include those exceptions.

The Supreme Court ruled that only the exemption for hotel guestrooms is constitutional, because the evidence against it doesn't overcome its presumption of constitutionality, Stephan wrote.

That's not the case for tobacco retail outlets and cigar bars, he said.

"Allowing patrons of such shops to smoke simply because it is convenient does not comport with the purpose of the Act, which is to protect the public and employees from the dangers of second-hand smoke," Stephan wrote.

While most articles concentrate on the state’s 11 cigar bars,  it also affects cigar stores.

Jason Hutchison, general manager of Jake’s in Lincoln, is already predicting a 10 percent to 15 percent loss of business. He said he hopes he won’t be forced to lay off employees.

“I don’t think the judges look at the repercussions for things like this,” he said

No they don’t.  And do not think that the anti’s feel this is a victory.

For Mark Welsch, president of Gasp Nebraska, the ruling is bittersweet.

“I'm very pleased that the Supreme Court has ruled that you can no longer smoke in cigar bars, in tobacco stores. I'm disappointed that they still allow hotels and motels to be smoky and am most concerned that they allow smoking at in-home day care's and foster home businesses,” said Welsch.

Right….not far enough.  You can never compromise with these people and be certain they will use this decision in the future in other states and cities to get rid of the exemptions.

Now let’s take this a step further.  The upcoming FDA ruling, many have said, will likely end up in court.  They are right.  The trouble is they don’t think about what could happen.  For example, if mass market cigars are covered by the FDA and premiums are not, don’t you think someone is gonna go to court?  I have been told that of course the mass market size will get an exemption after the court challenge.  They have wonderful lawyers you see.  My point is that any legal challenge can always go against you.  Witness Nebraska.  Bottom line…be afraid, be very afraid.

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No CommentsTags: cigar industry · cigar laws

See you in Court

August 20, 2014 · By · 1 Comment

One thing is pretty clear about the FDA…no matter what they rule, there will be court cases.  For one thing, Altria—the cigarette maker Philip Morris—is concerned that the FDA control may force them to change the name of one of the best selling cigar brands.  Altria owns John Middleton Co., which makes the Black and Mild brand.  Middleton dates back to 1856 and it has almost a third of the U.S. cigar market.

Under the Food and Drug Administration proposal, cigar makers would have to remove descriptions like "light," ''mild," ''medium" or "low" from their products, raising a unique question about the fate of Black & Mild.

The descriptions were banned for cigarettes under a 2009 law because many smokers wrongly thought they meant the products were less harmful than "full-flavor" cigarettes. Cigarette makers have since replaced those words with colors such as gold, silver, blue and orange on such brands, which usually feature different filters and milder-flavored blends.

The company contends that forcing it to change the name would be unconstitutional.

"Neither FDA's regulatory authority or the First Amendment allows the FDA to ban words such as mild for cigar and pipe tobacco regardless of the context," said Altria spokesman David Sutton. "Here, when the word is part of a longstanding and well-established trademark like Black & Mild, such a ban would violate basic constitutional guarantees."

But, of course, constitutionality matters to the government.  See Washington Redskins owner Daniel Snyder for confirmation. 

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1 CommentTags: cigar industry · cigar laws · FDA

FDA marches on

August 19, 2014 · By · No Comments

The FDA is going through the comments now and last week in talking with Glynn Loope about the comments submitted, he told me that on the last day the Cigar Rights of America group delivered about 40 pounds of letters.  Yup, the old fashioned pre-Internet kind on paper, not electronic.  That is a lot of letters from cigar smokers and is a good thing.  Loope says the CRA is drafting another letter for consumers to send to Congress. Yes there still is a way to stop this, via Congressional action. (This is an election year after all.)

In the meantime, Florida’s Attorney General gets a pat on the back.  Pam Bondi wrote into the FDA to say she thinks they are overdoing it.  Unfortunately she was alone.

Bondi’s letter was separate from a letter signed the same day by 29 other attorneys general that implored the FDA to make the proposed regulations even stronger, particularly in regard to electronic cigarettes

Bondi said the FDA should consider the economic impact of what it is doing.  (Remember it already has put people in San Antonio out of work when Finck’s cigar factory closed and I doubt there is much call for cigar makers in Texas anymore.)  Bondi is concerned that J.C. Newman in Tampa would have to cease its manufacturing in that city.

“This 119-year-old premium cigar company with 130 employees is truly unique in this industry and should not be regulated in the same manner as the nation’s largest cigarette companies,” Bondi wrote on Friday, the deadline for submissions on the federal plan.

Florida’s Senators also have been involved.

U.S. Sen. Bill Nelson, D-Fla., and U.S. Sen. Marco Rubio, R-Fla., have requested an exemption to the new rules for companies that don’t mass-produce cigars, such as J. C. Newman. The FDA is already considering an exemption for premium cigars that are handmade. J.C. Newman uses vintage machines.

We’ll see how this plays out.

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No CommentsTags: cigar industry · cigar laws · FDA

More on FDA

August 06, 2014 · By · 1 Comment

The FDA says it uses science for its rulings.  But does it? Nope not a whit.  Take the e-cig deeming.  You would think there is research on e-cigs to back up the agency’s proposal.  Not so much.  You see the FDA is spending $270 million of your money on research into e-cigs.  The research is underway and the regulations could happen within the year.

“Final results may not be available before 2018, researchers leading the FDA-funded projects told Reuters. That timetable, which has not been reported before, underscores how the slow pace of science is contributing to a regulatory vacuum, allowing e-cigarette makers to sell their products virtually unchallenged.”

Note the editorial comment above…emphasis mine.  So then why are they doing it?  Big Pharma.  The International Tobacco Growers Association has outlined the reasons for this and the WHO tobacco control agenda.  IGTA chief executive Antonio Abrunhosa:

"This is big war. Pharmaceutical companies always dream of replacing each cigarette with nicotine patch. They have been campaigning very heavily against tobacco for many years. They fund heavily for the campaign against tobacco," Abrunhosa alleged while talking to reporters.

"We are poor farmers, we cannot fight with big companies. They have millions of dollars. But we have millions of people on our side," he added.

While this fight goes on, the retailer trade group is still wrestling with definitions of premium cigars…how much should it weigh, what size, what price and who should be exempt.  To me this is the equivalent of re-arranging deck chairs on the Titanic.  Just leave cigars alone. All cigars.

An example is the Quesada Petit cigar introduced last month at the trade show.  It is little and weighs almost nothing, yet it is hand made out of all tobacco and it is even long filler!  The price about a buck.  Hand made and long fill make that a premium cigar to me, but others disagree. 

Then what about the premium cigars that J.C.Newman makes in Tampa? They are machine made and would not get an exemption.  That could kill the last cigar factory in “Cigar City” because the FDA would have to review all “new” products.

“The gatekeeping role includes requiring cigar manufacturers to spend thousands of hours, according to an FDA analysis, to test new products before submitting an application to sell a single new brand or size of cigar.  New packaging on an existing cigar also would require FDA approval, and the tightened manufacturing practices could prohibit J.C. Newman’s vintage equipment.”

Remember we have already lost one factory--Finck Cigar Manufacturing in San Antonio.  There are those in the cigar industry who think they can work with the FDA.  Nothing could be further from the truth.  If cigars are deemed to be under FDA control, in addition to most likely banning walk-in humidors (no self service) the agency would have to approve all new products.  How does that work out?  Not great.  Just last week, the Wall Street Journal editorialized how skin cancer is one of the most easily preventable diseases in the U.S. with melanoma killing one person per hour.

“One reason is that the Food and Drug Administration refuses to approve superior prevention technologies. The FDA last blessed a new sunscreen in 1999. Eight new chemical ingredient applications are awaiting regulatory decisions—three of them since 2002, and another three since 2005.”

As for the Tobacco office itself,  Senator Richard Burr of North Carolina cited a GAO report on the FDA’s approval process in tobacco which relies on Substantial Equivalence (SE).

“According to Burr, the GAO report concluded that since 2009, the FDA has collected more than $1.1 billion in tobacco user fees. However, as of now, the agency has only made final decisions on 17 tobacco products out of the 3,788 total SE submissions in the three years since the FDA received the first SE submission in June 2010. “

Bottom line, this is serious and more needs to be done quickly.  Get involved and make sure your friends are involved as well.  Contact your Senators and Representatives to back the bills, which would prohibit the FDA from regulating cigars.  And then get every cigar smoker to rise up and literally flood the FDA with comments this week.  After Friday, it will be too late.

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1 CommentTags: cigar industry · cigar laws · FDA

Last Call

August 05, 2014 · By · 3 Comments

Stop posting pictures of what cigar you smoked or are smoking.  Because if you don’t get busy your cigar days will soon be gone.  We are in the last hours to submit comments to the FDA on its deeming proposal that would bring cigars under its control.  To date, the FDA website shows only 66,000+ comments on the proposed rule.  Now considering not only cigars would come under the FDA, but so too would e-cigs, which don’t even contain tobacco nor emit smoke, and there are by estimates millions of e-cig users, that comment number is pathetic.  To give you an idea, when the Federal Communications Commission called for comments on the so-called net neutrality issue, there were more than a million comments.  Of those 66,000 you can bet many are from the anti side, although the Sunlight Foundation says as of July 18 slightly more than half come from our side.  But then again another 11,000 comments have come in since that report. We still have to do better.

Late last week the Campaign for Tobacco Free Kids put out a release saying 17.4 million Americans smoke cigars every day.  (I bet most don’t even know about the FDA actions.  I met a couple of retailers at the trade show who did not know!) What does that mean to the Campaign?  Regulation of course.

“This study shows that cigar smoking is a serious public health problem that must be addressed through strategies such as Food and Drug Administration regulation of all cigars and taxation of cigar products at the same rate as cigarettes.”

The other side wants absolutely no exceptions.  Remember the FDA didn’t want one either, it was the Office of Management and Budget that suggested the option for premium cigars and removed the ban on anything other than face-to-face sales, which would have shut down Internet cigar sales.  That did not make the anti’s happy.

"The part of the proposal we are deeply troubled by is the sweetheart deal for the cigar industry," Erika Sward, assistant vice president for national advocacy at the American Lung Association.

The campaign also is working hard lobbying medical groups to get on board.

"We oppose any amendment that would interfere with the current rulemaking process, prevent a science-based decision-making process, and place a broad category of cigars beyond the reach of FDA," said the May 27 letter, which was crafted by the Campaign for Tobacco-Free Kids and signed by more than 30 medical organizations. "An amendment to exclude certain types of cigars would prevent FDA from implementing even basic common-sense rules such as requiring manufacturers to report what ingredients are contained in their products."

The last day for comments on the FDA rules is this Friday August 8th.  If you haven’t done so,  go directly to the FDA site, or reach it through the Cigar Rights site.  I would suggest the FDA stay away from ALL cigars.  Be sure to tell all your friends and make certain your tobacconist knows.  And make sure they submit their comments.

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3 CommentsTags: cigar industry · cigar laws · FDA

Bye Gene

July 15, 2014 · By · No Comments

Gene Tipton has been a fixture at the trade shows.  As VP of Premium Cigars for Altadis USA, Gene is one of those great guys who everybody likes.  This year will be his last trade show.  He is retiring after a 50 year career. He started way before Altadis even existed in June of 1964 by working for Havatampa Cigar.  Eventually that company became part of Altadis.  His advice to new comers…

“If you love what you are doing, stick with it.” He admits he’s seen his share of change – some of it good, some bad – but it always works out in the end, he says. “If you work hard, people will notice.”

At 69, Gene now plans to get in a little relaxation.  He’ll spend time with his family and enjoying sport fishing and some golf.  Most likely Gene will still visit local shops in Florida where he lives to take some time with a good cigar.  We wish him well…but he certainly will be missed.

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No CommentsTags: cigar industry