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Habanos Today

Three top executives of Cuba's cigar company discuss the status of their primary asset: Cuba's global brands
Gordon Mott
From the Print Edition:
Matthew McConaughey, March/April 2011

(continued from page 3)

He says it will take several years to work through the inventory of boxes with the older seals, but eventually, every box of current-production Cuban cigars in the market will carry that new seal with the codes and the security measures.

"Gray market sales and counterfeits are extremely important to us because they damage the image of Cuban cigars," Jiménez Sánchez-Cañete says, "so we are doing everything possible to stop them." He admits that it is impossible to estimate just how many fake Cuban cigars are made, or how many cigars enter the market through gray market channels. But he adds, Habanos is constantly checking the marketplace and if they now find boxes with codes that are inappropriate for that market, they may terminate the agreement with the distributor where the box came from.

While Habanos refused to release the exact export figures for Cuban cigars, Fernández de Navarrete says worldwide sales would increase in value for 2010, after declining about eight percent in 2009. He says the Cuban cigar is experiencing the same phenomenon as many other cigar brands—people are smoking less but smoking better.

He attributes that trend, in part, to the no-smoking regulations that are being passed in every major market for Cuban cigars and to the economic conditions in their major markets. And, he says the slowdown in Cuban cigar sales during the global recession is starting to pick up, even though they expect the recovery period to continue for awhile, especially in places like Spain.

Western Europe remains the biggest market for Cuban cigars, accounting for about 55 percent of all export sales, followed by Asia-Pacific at 15 percent, Latin America and the Middle East at 10 percent each and the rest of the world—Africa, Eastern Europe and Russia—taking up the last 10 percent.

They decline to speculate about how many Cuban cigars enter the United States, but they agree with estimates that put the number at somewhere between five to 10 million cigars a year.

In terms of volume, the biggest selling brands remain Montecristo, Romeo y Julieta, Cohiba and Partagás, and in terms of revenue, the ranking is Cohiba, Montecristo, Romeo y Julieta and Partagás.

The single best-selling vitola, or size, is the Montecristo No. 4, a corona sized cigar, while the best-selling robusto is the Partagás Serie D No. 4.


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