An Interview with Edgar M. Cullman Sr.
Chairman of the Culbro Corporation
(continued from page 3)
C.A.: Tell us about how you acquired the American rights to Cohiba, which today is widely regarded as the No. 1 brand produced in Cuba?
Cullman: We didn't buy it. We just registered the brand name in February 1981 and began marketing it in a limited way.
C.A.: You have been sitting on it. Why have you not promoted it, taken advantage of its universal appeal and great demand?
Cullman: We have been sitting on it; we can't do all the brands at one time. We make a few Cohibas now.
C.A.: I understand they are available, but you are not really out in the market in force. Can you speak about the plans you have for Cohiba?
Cullman: They are available at special places: Dunhill and a few other places. We have no big plans at the moment. We are looking over what we should do. We are very conscious of the fact that should Cuba open, we want to have a position with Cohiba. What that would be we are not sure today. We will probably do a little more with Cohiba next year. But we haven't formulated all our plans on Cohiba.
There is a proliferation of new brands in the United States, whichI think is a great thing for the premium cigar business. Cigar Aficionado has done a lot to promote those brands and give them an opportunity.
C.A.: What you're saying to me is that in 1995 there will probably be something coming forward on Cohiba?
Cullman: I think there will be.
C.A.: Macanudo is your No. 1 brand, Partagas is your No. 2 brand. When we speak to manufacturers today they speak to us in terms of back orders. Can you tell us how many cigars are back ordered at this moment for Macanudo and Partagas?
Cullman: I think it is about a million cigars on back order total.
C.A.: Coming back to Connecticut for a moment: there has been a tremendous cutback in wrapper-tobacco acreage to 1,000 or 1,100 acres, of which there are really two operators in this market: yourselves (Cullman Bros.) and the Windsor Shade Co-op. With the tremendous recent growth of premium cigars, many of which use Connecticut wrappers, is it likely that the amount of acreage for planting is going to increase?
Cullman: I think it will increase a small amount, but not a great amount. What might prompt it to increase more is if Connecticut shade achieves a stronger position in Europe. At the moment, the only cigars that are wrapped in a natural wrapper are premium cigars and a few of our cigars like Garcia y Vega.
C.A.: I hear that there is not enough "A"- quality Connecticut wrapper to meet the growing demand in the premium cigar market and that there is also a serious problem with Cameroon wrappers, which is the wrapper of Partagas. Is there a serious problem getting large-leaf Cameroon wrapper? And what is being done about it? And what are you going to do if you can't get the wrapper?
Cullman: Yes, there is a problem in Cameroon in Africa. That's been a problem for us for quite some time. We expect that we will get more tobacco because there has been a little bit better organization in Cameroon. And while there is no certainty, we believe that Cameroon in the coming years will provide enough wrappers for us. We only want the very best, and they want to be sure to sell it to us because we pay the highest price by far for our wrappers for Partagas; no one else pays the same price. Nowhere near!
C.A.: Do you buy these at auction or under long-term contracts?
Cullman: We used to buy at auction but now the auction process has stopped. Now we buy under negotiation. There are certain people who are growing tobacco there that are supplying the money to the Cameroons.
C.A.: Is there a shortage in all Cameroon wrappers of quality or is it particularly large-leaf Cameroon?
Cullman: Particularly large-leaf and the type of tobacco that we like.
C.A.: Is that the reason Partagas No. 10 is in short supply?
Cullman: Yes, and some of the other new Partagas Limited Reserves.
C.A.: Right now you don't see any solution to the problem?
Cullman: We haven't seen one yet. We are looking for it.
C.A.: If the production of Cameroon doesn't increase, would you then look at other sources, other countries for Partagas wrappers?
Cullman: Well, we always have to look at other sources, but like anything else, people like a certain taste and this wrapper has a certain special taste that people like. We are going to try to protect that. We are encouraging the people who are supplying the money to grow tobacco in the Cameroons to grow more for us. I think they will. Right now there is a problem.
C.A.: Let's talk about a subject that is somewhat controversial but something that every cigar lover asks about or thinks about and that's the whole issue of Cuban cigars and the Cuban trade embargo. I don't want to put words in your mouth. But on one hand, I have heard you say that under the right set of circumstances, the tobacco grower in Cuba makes the best cigars on earth. On the other hand, you are very adamant on the position that Americans should not buy or smoke Cuban cigars because it is against the law--and therefore it is un-American. Will you tell us why you feel that way, both from a cigar lover's point of view as well as from a moral point of view?
Cullman: I think that it is something that I have thought a lot about and you have heard me express my thinking about that quite often. I think that the taste of a Cuban cigar is a very rare taste, a beautiful taste, and people who like that taste will do anything to get a Cuban cigar. And they do almost anything to get a Cuban cigar, such as bring them in illegally and smoke them illegally. And don't forget that that's against the law. There is a new law that says you can't bring in any cigars from Cuba and people who do bring them in do so at their own peril.
Having said that, what do I think about Cuba? I think if we ever could find a way to deal with Cuba, it would be a great boon for the cigar business. But I'm not a politician. It would add a lot of excitement to the whole industry if we could get some of our domestically made cigars--the less-than-premium cigars--produced with some Cuban tobacco in them. People haven't smoked anything with Cuban tobacco and would like to try it. And if they try it, some of them may like it.
We used to blend our White Owls and our Robert Burns with all Cuban filler. So that was a domestic cigar with all Cuban filler. There could very well be a revival of the cigar business when people want to taste Cuban tobacco. Now how that's going to be worked out, when and if we recognize Cuba, I don't know. I think [the end of the embargo] is going to come, but I don't know when because I was told in '74 that it was around the corner and now I'm told it's around the corner. I hope during my lifetime I'll see us recognize Cuba.
I think to the American taste, for the most part, Cuban cigars are too strong. People are going to have a tough time smoking all Cuban tobacco.
C.A.: Do you have a best-case scenario for when the embargo ends?
Cullman: Yes, I do. The best-case scenario will be: the embargo ends and the American government says that until we can buy enough tobacco to satisfy the American demand by the U.S.-owned manufacturers to make whatever cigars they want with Cuban tobacco, it will hold up allowing Cuban cigars in. That was the understanding we had with the State Department way back in the 1970s when we thought we were going to have some rapprochement with Cuba.
C.A.: Does that mean that you, the manufacturer, will have the first option to buy Cuban tobacco in bulk to ship to your factories in the Dominican Republic and Jamaica to blend with whatever tobaccos you choose? Or make clear Havanas? And I assume you mean with Havana wrappers?
Cullman: Yes. And the various brands could have some Havana wrapper.
C.A.: In other words you might end up having separate versions of Partagas: a Dominican version and a Cuban version?
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