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Inside Cuban Cigars—A Talk With Cubatabaco Head Francisco Padron

Cigar Aficionado meets with Cubatabaco's top official, Francisco Padron, to discuss Cuba's cigar industry.
Marvin R. Shanken
From the Print Edition:
Rush Limbaugh, Spring 94

(continued from page 2)

C.A.: So that's pretty steady. You are not looking to increase or decrease the machine made?
Padron: That depends on the orders. This is a business. If anybody asks for the cheaper machine-made cigars, we are going to deliver. Our priority, however, is handmade, not machine-made cigars.

C.A.: You are delivering in the area of 50 or 60 million cigars, and let's say 40 to 45 million are handmade. With the increasing demand for Cuban cigars, do you have any idea what the total world demand would be for handmade Cuban cigars?
Padron: Without the United States, we estimate the market to be from 90 to 100 million cigars.

C.A.: And with the United States?
Padron: 20 million more and increasing in four years.

C.A.: At the Cigar Aficionado seminar we held in New York, a panel discussed Cuba. It included Edgar Cullman, Nick Freeman, Theo Folz--top people in the cigar trade. We asked them about the embargo: how long did they think it would continue, given the current political environment and the leadership of Clinton. They seemed to have a consensus feeling that the lifting of the embargo was another five to seven years away. They added that in order to revitalize Cuba's cigar production it would take another five years. So, it would be 10 or 12 years before there is any balance of supply and demand, if the United States could buy Havana cigars. What would your response be to that?
Padron: I am not a politician. Things are moving. As Jose Martí [the legendary, 19th-century, Cuban political hero] said, "the most important thing in politics is what you don't see."

C.A.: A lot of people--cigar lovers--are disappointed that there has been no significant movement to bring things together between the two countries and that President Clinton has maintained the policy and given support to the Cuban-American Foundation of (Jorge) Mas Canosa. Do you see anything happening from the Cuban side that might lead to an end to the embargo, or is it really up to when the United States decides that it's enough already?
Padron: It is like a fight between Goliath and David. And you don't know who must make the first move.

C.A.: If the embargo ended tomorrow or two or five years from now, have you thought through how it would happen and what the scenario would be? You would have problems with certain brands as far as trademark issues, and with other brands you do not have a problem. Have you thought how you would introduce your brands to the American market?
Padron: First, there is going to be a fight. We have not been able to have the brand name in the United States because of the embargo. It was forced by you [the United States]. It was not decided by our side. Your side decided on this. So, maybe there is going to be a fight. But we are not going to fight in order to get our cigars into the United States. As we always say, a Habano [cigar] is a Habano [cigar]. With a name of Marvin or Padron or Meyer or whatever goes on the cigar, it is a Habano. So, we are going to let everybody know that we are here, and this is a Habano. We are not going to fight with somebody else because he owns the brand name of Cohiba or Montecristo in America. We have been living without that for a long time.

C.A.: So if you cannot resolve the issue, you would introduce new brand names which are Habano, and there would not be a conflict unless the government said that this issue must be resolved. You know the issue is that the families who lost the brand names say that they are entitled to have those brand names back, which is more confusing because of certain problems in the international market such as what has happened with Spain's tobacco monopoly, Tabacalera. Could you explain briefly what is the situation there as far as Montecristo, H. Upmann, Partagas and other brands?
Padron: In general, we have solved our disagreement in a way so that it will not hurt or create any problems for Tabacalera. This will help us to keep delivering Montecristo, Upmann, Partagas and others to the Spanish market.

C.A.: So you are continuing to supply Spain, but who owns the brand names now? I thought that the worldwide rights, except for a few countries such as the United States, Cuba, the Dominican Republic and others, were sold to Tabacalera by Consolidated and General Cigar?
Padron: Tabacalera owns the names. But they do not own the name in all countries. We own them in plenty of other key countries in the world.

C.A.: In what countries do you still own the brand name Montecristo,as an example, since it is your biggest brand?
Padron: We own it in the United Kingdom, Germany, Holland, Belgium, Switzerland, Canada and plenty of other countries.

C.A.: In what important countries does Tabacalera own the brand?
Padron: France and Spain are the most important. They are our two biggest markets.

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