Interviews have been done with top cigar shops in key cities in Spain, France, Switzerland, Germany, Belgium, Great Britain and others around the world, and most reported that between 20 and 50 percent of their Cuban cigar sales went to Americans. The cigars are bought in a number of ways including visiting the shop, telephoning or faxing orders, or using the Internet. There's a thriving bootlegging business for Cuban cigars as well through Mexico and Canada.
The topic of Cuban cigar sales to America came up earlier this year over lunch when I asked a friend from Habanos which market he thought still had the biggest growth potential in this gloomy economy. I was sure he would answer something like China, Russia, Saudi Arabia or Brazil.
But he answered with a big smile: "The United States." And he didn't mean when the embargo is dropped.
I almost fell out of my chair as we were smoking a Montecristo Maravilla, which was part of the Colección Habanos series in 2005. The cigar was phenomenal, by the way. It showed wonderful aromas of cedar, nuts and cappuccino that followed through to a fresh and rich palate that increased in intensity with each puff. It was SO Montecristo with the cedar and creamy character. It was a great smoke. 95 points, unblind.
In between puffs, my friend gave an example of how Americans can affect the sales of a Cuban cigar market when things go wrong. He said that when the United States started the war in Iraq, and France didn't support us, duty-free sales in France dropped from 4 million Cuban cigars to 2 million in one year simply because less Americans traveled to France. "It was a big decrease for us," he said.
It makes me wonder what will happen to the global market for Cuban cigars when the trade embargo is finally dropped. Inevitably, sales in all those cigar shops around the world from Mexico City to Montreal to London to Milan to Dubai to Hong Kong to Sydney will drop. Americans will be able to buy their Habanos at home, so why would they bother buying them anywhere else?
"We think that the first year we can sell up to 100 million cigars in the United States," he said. "And then it will peak out at about 50 million cigars."
This certainly doesn't make most non-Cuban cigar manufacturers happy either. According to the Bloomberg article, General Cigar has already "hired Miller & Chevalier, a Washington law ﬁrm specializing in trade issues, to study how else it might slow the ﬂow of Cuban imports if the embargo goes."
However, to slow the importation of Cuban cigars to the United States when the trade embargo is finally dropped is going to be like holding the dikes during Hurricane Katrina in New Orleans. America's taste for Cuban cigars is already well established and it's insatiable. In fact, the United States already seems to be the biggest market in the world for Cuban cigars. It's only going to get bigger when Cuban cigars are legally available in cigar shops across the country.
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