by Even the occasional smokers of cigars, that is to say those who smoke one or two a year, will have understood that the market is booming: significant shortages of mainly Cuban cigars and price increases which in two years are close to 200%.
The most distinctive of Cuban cigars, Cohiba Robustos, one of the most popular and sought after cigars on the market, has become hard to find. And where it is available, it currently costs around 70 euros each from 25 euros over the period 2019-2020. Famous Cuban brands such as Cohiba, Romeo y Julieta and Montecristo, all owned by Cuban tobacco company Habanos SA, 50% of which was sold to Chinese interests in February for $1.2 billion, have seen the price of their cigars double, even triple. Some of the larger cigars like the Churchill now cost upwards of $120 each. But even at these prices, there are major shortcomings. Thus, the classic box of 25 Cohiba Robustos cigars on the market today costs 1,768.75 euros, which is more expensive than most Apple iPhone models.
A look at the most reputable Greek websites selling cigars online immediately leads to the “out of stock” label. In fact, the vast majority of Cuban cigars are now a hidden treasure in the market. As Nikos Miamis explains when talking to “Kathimerini”., Cuban cigar specialist Habanos, which has a physical store in downtown Athens but also one of the largest online, these price increases and shortages have resulted in higher prices and cigars from other countries d origins such as Saint Dominic and Nicaragua, while bringing to the Greek market for the first time cigars from third countries such as Honduras. Some of them are really really good, but they’re not Cuban. And Cuba was and remains the undisputed king of these fine tobacco products.
In recent weeks, however, he sees an attempt to normalize the regular market supply. In the meantime, militiamen here and there on the Greek border are bringing to the Greek market, as in other countries, monkey cigars, of inferior quality, i.e. tobacco – which, according to experts, sometimes even includes banana leaves – wrapped and packaged with fake labels.
Countertrade and monkey cigars on the market, despite efforts to standardize supply.
Despite the fact that the use of tobacco products and in particular cigarettes is decreasing in the world and therefore also in Greece, it is considerably reduced while increasingly large shares are conquered by alternative products such as heated tobacco and vaping, the demand for cigars as well as cigarillos is at the highest level of the last decade. According to sources from the management of Phenicia Fereos Hellas SA, the official importer of Habanos cigars in Greece, the only authorized wholesaler, in 2021 sales of classic cigars reached 2 million sticks, a level which is also the highest since the beginning of the Greek debt. crisis 15 years ago. Among them are cigars that the Cuban company has made especially for the Greek market under the name “Omiros”.
“I estimate that the current demand for Cuban cigars amounts to two and a half million pieces, quantities which, however, will take some time before we can make them available to the Greek public given the great shortages observed. around the world,” said a senior Phenicia Fereos Hellas executive. However, as he assures us, the worst is behind us. In 2021, Phenicia Fereos achieved a historic record not only in volume but also in sales value and profitability. And in 2022, the demand was even higher. In Greece but also abroad.
Havana-based Corporacion Habanos SA, which markets 27 major Cuban PDO brands, all made by hand, announced in late February that it recorded sales of $545 million in 2022, up from 2021. despite production difficulties related to a reduced harvest due to typhoons, inability to source packaging materials in time, label and international supply chain delays.
The Chinese, hurricanes and Havana politics drive prices up
The significant shortages and rising prices of Cuban cigars are due to the perfect storm that has hit this market: international demand is growing as emerging economies like China with hundreds of millions of people see their incomes improve and thus socially develop into the middle class, they seek expensive pleasures like those of authentic Cuban cigars. But demand is also strong in mature markets like Europe despite the decline of traditional cigarettes, as more people choose to selectively smoke a few fine cigars a week over anything else. At the same time, supply collapsed with the pandemic.
Chinese interests Allied Cigar Corp acquired 50% of Habanos SA by paying a price of over $1.2 billion.
Cuba used its own vaccine, not as effective as it turned out, so around 50% of workers in the manual production of cigar wrappers were out of work for almost two years. But that was not enough. Particularly bad weather conditions with hurricanes that have destroyed a large part of tobacco production have prevailed over the past three years.
However, even when the tobacco was collected and workers were ready to pack it, the wooden boxes it is packed in as well as the paper tags that wrap each stick were unavailable due to known issues caused in the international supply chain by the pandemic. It should be noted that the majority of boxes and labels are produced outside of Cuba, as experts explain. However, in addition to the imbalance between supply and demand, the Cuban public company Corporacion Habanos, SA itself has adopted and implemented for some years two policies which lead to increases: in principle, for some years now, the cigar prices increasing 3% to 5% per year horizontally.
Secondly, it decided to try to equalize worldwide the prices of its best cigars, that is, those which it included in the so-called Luxury Line series which are the best lines of the brands Cohiba, Romeo y Julieta and Montecristo. This policy is attributed to increases that reached even before production problems arose in some countries by more than 100% depending on the burdensome tax regime for cigars in each region.
But concern among traders and smokers, particularly in Europe and the United States, that the situation could get even worse, intensified earlier this year when it emerged that Chinese company Allied Cigar Corp , based in Hong Kong, had acquired 50% of Habanos SA by paying a price. which exceeded $1.2 billion. This development has been interpreted as evidence that China will now absorb a much larger share of Cuban production, perpetuating the scarcity of its coveted brands in the West.
The markets that generated the highest sales for Habanos in 2022 were Spain, France, Germany, China and Switzerland. By region, Europe remains the main market for Habanos, with 53.7% of sales value, followed by the Asia-Pacific region (19.3%), the Americas (15.3%) and the Africa and the Middle East (11.7%).
And as if all that weren’t enough, in early April, an article in Granma, Cuba’s state newspaper, revealed that Pinar del Rio, the region in western Cuba where most of the tobacco from high quality, is facing perhaps its worst harvest. still tobacco in history. The lingering effects of Hurricane Jan, which destroyed most tobacco growers in Pinar del Rio in late September, are largely to blame.
