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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 22)

CA: And private label simply means that there's a chain of drug stores or department stores that buys the entire lot and they own the name or you own the name?

DiMeola: We put many smoke shops in the private-label business. We maintain a stock of labels. We bring in unbranded bundles. We maintain a stock of them. We slap their label on it and ship it to them.

CA: I mean, other than a retail store that is also in the catalogue business, does an individual store have enough volume to justify being in the private-label bundle business?

DiMeola: No. We bring in generic stock which is maintained in our humidors in Richmond, Virginia, which is our distribution point, and we'll stock labels for an individual retailer. He'll call up and say he wants 500 cigars or 1,000 cigars over three or four different shapes. We'll take his label out of stock, affix it to that generic bundle and ship it to him. That becomes his private label.

CA: How much lower in price is a bundle of handmade cigars? Let's take H. Upmann, for instance. It sells for about $90 for a box of 25 cigars. What would the same cigar as a second cost in a store?

DiMeola: Half.

CA: Half? So there's a 50 percent discount. Is it to the consumer's benefit to try and ferret out which brand it was that went into the bundle? Or is there no way he's going to find out?

DiMeola: He's not going to find out, because these are no longer seconds. It's a different cigar now. Now we produce bundles.

CA: Cigars specifically for bundles?

DiMeola: That's right--which we now want to move.

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