Richard L. DiMeola
Executive Vice President, Chief Operating Officer, Consolidated Cigar Corporation
From the Print Edition:
Arnold Schwarzenegger, Summer 96
(continued from page 9)
DiMeola: I think I mentioned earlier that we bought controlling interest of CIT, and we got into partnership with Pepe Garcia, who was the original manufacturer of Montecristos with his partners, the Menendezes, in Cuba. Pepe was in litigation in the U.S. to get the rights to his trademark, and in the mid-'70s, the U.S. government decided he was, indeed, the rightful owner of H. Upmann, Montecristo, and Por Larrañaga, which were the ones that Menendez and Garcia had.
CA: So Garcia became the rightful owner around the world?
DiMeola: The U.S. government adjudicated that he was the rightful owner of his trademarks in the United States. The same thing happened to the Cifuentes brands with other companies, and so CCB--Cuban Cigar Brands--was formed as a partnership between Consolidated Cigar and Pepe Garcia, where Consolidated had a controlling interest. And the purpose of CCB was simply to hold those trademarks. Then, we started to market H. Upmann in the United States in 1975.
CA: If Garcia owned the brands, how did you end up getting the controlling interest? Was it that there was a bigger deal through a separate division that was set up, and he was allowed to keep a significant equity even though you bought the brands?
DiMeola: That's correct. And so we started to produce H. Upmann for the United States in 1975, and those sales paid royalties to CCB in which Pepe shared, and his heirs still do today. There was also a separate situation with those brands on a worldwide basis. At the same time as the litigation in the States, there was litigation in other countries as well--France and Spain in particular. The Cifuentes brands--Partagas, Ramon Allones and La Gloria Cubana--were involved in a legal dispute in Spain as well. Their case was heard first, and we had a parallel case going of Montecristo and H. Upmann. Now, Montecristo accounted for 75 percent of the premium cigar business in Spain. So when the Cifuentes people got their win, we started talking and they said, "Look, we have a win here, and you have a brand that accounts for 75 percent of the market. You have the power. It's going to take you maybe years for your case to go through the Spanish courts. Why don't we form a partnership, and see what we can do?" And that's what was done. We, over a period of time, negotiated with Tabacalera.
CA: Who else was involved?
DiMeola: The Leopoldo Cifuentes family.
CA: So it wasn't Ramon Cifuentes?
DiMeola: No, Leopoldo is a nephew of Ramon Cifuentes and he held the world rights to the trademarks outside the United States. Whatever those world rights are. So the partnership was formed and a sale was negotiated of the trademarks to Tabacalera, the Spanish monopoly, and once the Supreme Court in Spain agreed with the lower court's decision, the world rights to those trademarks were transferred to Tabacalera, except, of course, for the United States and the Dominican Republic.
CA: And that partnership was shared 50-50?
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