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Richard L. DiMeola

Executive Vice President, Chief Operating Officer, Consolidated Cigar Corporation
From the Print Edition:
Arnold Schwarzenegger, Summer 96

(continued from page 18)

CA: Do you see anything new on the horizon that will affect the taste or the quality of any of your brands in the next three or five years?

DiMeola: Nothing new in the way of new tobaccos. We're always experimenting with blends and things. We're trying to keep our fingers on the pulse of the market to see what the consumer wants. We try to produce blends that we think will appeal to masses of consumers. For example, the European trade has been conditioned for years by the heavier Cuban-type cigar. So in order to accommodate them, we have produced blends with more kick. That doesn't necessarily mean that the European consumer, in general, is married to it. My personal belief is that this tactic on the part of European trade distributors and retailers has limited the market. We find that some mild Dominican cigars indeed have an acceptance by some people and do not affect Havana sales at all. So Dominican cigars are becoming more and more popular. There are some markets--one market, anyway--in Europe where Dominican cigars outsell Cuban: That's Germany. But Germany is not a typical Cuban market.

CA: Given the dramatic increase in your production in recent years and given what appears to be increasing demand for cigars in the foreseeable future, do you see the availability of high-quality tobacco to continue to grow at significant levels? And do you see companies being able to hire, train and develop the necessary skilled people to produce a high-quality cigar?

DiMeola: The reports are that the farmers are growing more acreage. The labor problem is one that takes time. No one in the premium cigar industry has been able to keep up with the rate of increase in demand, and I see that continuing. I don't think that we can train the workers fast enough.

CA: With specific regards to Mexico, is that pretty much a self-contained unit of operation?

DiMeola: Our operation in Mexico is entirely vertically integrated. We use only Mexican tobacco there and it is all grown by the same person.

CA: But you don't own any assets?

DiMeola: We don't own any assets in Mexico. We own the trademark, Te-Amo, for the United States, and we have a contractual arrangement with people in Mexico.

CA: Someone owns the entire operation, and you have an agreement to purchase all of their production?

DiMeola: That's correct. Well, we don't purchase all of their production. They have some business in Mexico and they're doing some little business in Europe.

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