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Cuban Cigar Sales Decline

Gregory Mottola
Posted: February 25, 2009

Habanos S.A., Cuba's cigar export organization, announced that global sales of Cuban cigars decreased 3 percent, down to $390 million, for 2008.

Habanos vice president Manuel Garcia discussed the sales numbers in length on Monday during a press conference at the Habanos Festival in Cuba. The festival attracts some of the world's top vendors, collectors and enthusiasts of Cuban cigars, including Cigar Aficionado's European editor, James Suckling, who reported in a recent blog that sales dropped "due to the economic crisis and the rise of anti-smoking [restrictions]. And most of the cigar merchants, whether from London, Hamburg or Hong Kong, were bemoaning the difficulty in selling fine cigars during the event."

Also attending the festival was Christoph Wolters, proprietor of the Casa del Habano retail shop in Hamburg, Germany, who relayed some of the Habanos total net sales figures of the last three years in order to show some perspective. Although 2008 sales ($390 million) were not as strong as those in 2007 ($402 million), they were still a stronger than 2006 ($374 million).

"The drop of about 8 percent in [units] and some 3 percent in total sales has various reasons," Wolters said. "One example I'd like to mention is the drop in international travel and duty-free sales, which account for 25 percent of the total Habanos sales."

In Windsor, Ontario, a Casa del Habano store is feeling the crunch.

"We've been a Casa del Habano since 1995, and this January was the slowest month we've had in the history of the shop," said store manager Jay Henderson. "Many of our customers are recession-resistant, but even they are being cautious with their spending right now."

Henderson said that February has picked up a bit, showing stronger sales than January, which is traditionally a slow month in cigar retail.

Habanos has 144 Casa del Habanos stores around the world, none of which are in the United States, which remains the world's largest consumer of cigars.

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