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An Interview with Ernesto Perez-Carrillo

Owner, El Credito Cigar Co., makers of La Gloria Cubana, La Hoja Selecta, El Rico Habano and Dos Gonzales cigars.

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CA: Are you saying that every city now has at least one retailer that carries La Gloria Cubana?
Carrillo: No, there are a lot of cities, especially in the Midwest and on the West Coast, that don't have them. There are a lot of places that still don't carry La Gloria Cubana.
CA: How does my reader, who wants your cigar, get your cigar?
Carrillo: That's a good question and frankly, I know we have to expand and spread the cigars to different cities. But I want to give these people who have been waiting for me all this time, some reward.
CA: If a consumer calls your office on the phone, will you send them the list of stores around the country that carry your cigars?
Carrillo: If they call, what we'll do is tell them they can get it at such and such a store. The problem that we had is when the consumer goes to the store, he finds that the retailer is out. When a retailer gets a batch of La Gloria Cubana, they sell out within two to three days. It's a real problem for the retailer and myself because you usually end up with an upset customer.
CA: As a curiosity, when you ship to a retailer, how many boxes are in an order?
Carrillo: We average, depending on the size, from 40 to 50 boxes. But it can range from 30 boxes to about 120.
CA: And how many times a year might they get that?
Carrillo: About four times a year.
CA: So even though the retailer is in St. Louis or Memphis, he's going to get his shipments?
Carrillo: Yeah, it's a steady thing. We rotate. It's something they're going to get whether they call or not.
CA: People found two things attractive about La Gloria Cubanas: it is a well-made, rich-tasting cigar and it was reasonably priced. Today, costs have gone up. The growers want more, you've built a new factory, you're doing a lot more. Have you adjusted your prices, for instance on a Wavell?
Carrillo: Three years ago, I think it was $1.95. If I'm not mistaken, now it's about $2.85.
CA: $2.85. Are you going to continue to increase prices?
Carrillo: I don't know, I try to keep the prices as low as possible. What I try to do is cut costs on my end. Of course, if it's a question of my costs going up tremendously, that's the only time I'll raise cigar prices. I have this philosophy that I make a good cigar, a quality cigar, at a price that most people can afford.
CA: What happens if hotels or restaurants, which are getting more and more into offering cigars, want to sell your cigar? Do you sell to hotels and restaurants?
Carrillo: We haven't. We sell mostly to retailers and to wholesalers.
CA: I've heard stories where a retailer, who is not one of your 178, will go into a store, buy five boxes at--I'm making up the number, but let's say, $80 for the box. Takes it to his store, marks it up to $150 or whatever, and sells it. So it's like a double markup because customers want your cigar.
Carrillo: That's one of the biggest problems I have. I mean, I have had a lot of problems during my years making cigars. But I find this to be one of the biggest problems, where you have people charging excessive amounts, especially when I am trying to sell the cigar as low as I can at a decent price. And we see that people are charging 12, 15, 20, 22 dollars for, let's say, a torpedo. It makes me sick. I don't think it's fair for the consumer, and I don't think consumers should pay this price unless it's priced that way originally.
CA: Is there any way to characterize the retailers who do get your cigars? Are they the old-line, top retailers?
Carrillo: Yes, places like Mike's in Miami, Holt's in Philadelphia, Arnold's in New York, Jack Schwartz in Chicago. They were the ones that started with us, and they're loyal to us and we're loyal to them.
CA: Your number two brand after La Gloria is El Rico Habano. Is that less expensive?
Carrillo: Yes.
CA: How much less? Ten, 20 percent?
Carrillo: About 10 percent.
CA: Are you going to increase production of that brand?
Carrillo: We're going to be increasing the production, because that cigar is selling very well. That's an old Nicaraguan blend of tobacco, except for the wrapper, which is from Ecuador. It's full of body. I think that once people start smoking a cigar--let's say they're starting with a mild cigar--they want to move to something a little stronger, like El Rico, which would be a full-bodied cigar. And that's starting to sell very well. We haven't exposed it to the public so much because we've been tied up with La Gloria.
CA: What other brands do you make?
Carrillo: We make La Hoja Selecta, which is a mild cigar. Then a couple of months ago we started making Dos Gonzales, which is another brand that was very popular. It was one of the first brands made in the Dominican Republic.
CA: And all of these are distributed wherever you sell La Gloria? You don't have any exclusivity with anyone in terms of these brands?
Carrillo: No. We'll sell to anyone who prices our cigars at our suggested retail prices.
CA: Are those two new brands pretty much the same kinds of blends, the same kind of tobacco?
Carrillo: No. La Hoja Selecta is a blend of Dominican and Nicaraguan. It's a milder tobacco that we use. Dos Gonzales is an all-Dominican cigar.
CA: Including the wrapper?
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