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An Interview with Alejandro Martinez Cuenca

Cigar Aficionado sits down with the owner of Nicaragua's oldest cigar brand, Joya de Nicaragua.

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A: I think there is no possibility that we're going to go back to the past. Everything that is in front of us—regardless of who is sitting in the presidency of Nicaragua—should be forward. Nicaraguan tobacco, regardless of the political situation in this country, will continue to be the best tobacco in the market, the best quality. I am still confident that Nicaragua will continue to be a good place to make cigars and grow tobacco as we have been in the last part of the 1990s and the 2000s.
Q: How important is the cigar and tobacco business to Nicaragua?
A: There are 23 formal businesses dealing with tobacco and cigars in this country. There are 14 owners. In total, we are benefiting around 80,000 individuals directly and indirectly in Nicaragua. In the northern part of Nicaragua, including Jalapa, Ocotal, Condega, Estel', you see booming activity. The major cause of that is tobacco: production of leaves, companies that manufacture boxes, companies making the tools for cigars, cellophane—simple companies. At the end of the day, you're talking about 80,000 Nicaraguans depending on the business. Sugar doesn't contribute as much. The only industry that can compete is coffee. Aside from coffee, tobacco is the highest labor-intensive activity that is carried out in this country.
Q: With Daniel Ortega being made president again, many people are concerned about the future, given the man's past.
A: I think people are taking the new situation in terms of Ortega relatively quietly, not too much concern. People understand very well that the vote that Ortega has taken is very fragile. There's the minimum required number of votes. People get concerned because they don't know what route he is going to take. What I have said is there aren't too many routes—continue, that's the only route, because anything else would be putting the country in a very difficult situation. The country cannot afford it.
The point is, here we are, and the new president is being sworn in, and everybody is saying, I'm going to wait and see. I don't see people moving out of the country as they did in the 1970s and 1980s for one basic reason: I think the experience of Nicaraguans outside Nicaragua was so harsh and so difficult—even though some of them were successful—that people are convinced that if they leave this place, they are going to lose their niche and others will take it.
Q: That said, though, do you think some people are thinking of contingency plans? Many cigarmakers making cigars here also have cigar factories across the border in Honduras.
A: I think anyone who is serious in business needs to have a contingency plan. I think it would be terribly irresponsible, not only in terms of yourself, but in terms of your customers, not to have a backup plan in case things go worse than you think. At the end of the day, we are 14 individuals making decisions on what to do in regards to cigars in this country. And I have talked to all of them. In the beginning they were concerned. And I have told them, it's never going to happen.
Q: You don't think nationalization will happen in Nicaragua again?
A: No. And let me tell you, I never thought Ortega would win. That's why I proposed an alternative candidacy.
Q: You yourself.
A: Yes. Once he won, it's important we all have some backup alternatives, but it's important to take the opportunities the country has today, which is demonstrating tobacco is improving tremendously, not only in terms of volume of tobacco being exported, volume of cigars being exported, but also people are more concerned today with quality than they were before. So leaving this niche would be suicidal for anyone. You have a lot of producers from the Dominican Republic buying tobacco from Nicaragua, you have many Hondurans buying tobacco from Nicaragua. Why leave that to someone else?
Q: Should investors be worried about the close relationship that's developing between Ortega and Venezuelan president Hugo Chavez?
A: The talk of Ortega on his partnership with Venezuela should be viewed more of rhetorical position than anything else, even if the many promises Chavez made for cooperating with Nicaragua were to become real. Do not forget theÊpolitical leverage Ortega has is very limited, and therefore, political realism should prevail over and above the concerns that have now flourished.
Q: You were instrumental in reconvening the group of Nicaraguan cigarmakers and tobacco growers, which convened in December. Can you talk about that?
A: When I called for this organization to finally be put on its feet, I told them there is the possibility that Fidel [Castro] is going to pass away. Even if he doesn't pass, the reality is, now you have a Democratic majority in the [U.S.] House and Senate. I think sooner or later Cuba is going to open. What I said to that group is we should not [pull together] because of fears of Ortega. We should do it to prepare ourselves better, to continue to put the name of Nicaraguan tobacco on the minds of international consumers in the United States and everywhere else, so when Cuba opens we will not be hurt as an industry, and we will maintain the niche markets. So regardless of what happens to Cuba, we will continue to sell our products and continue to grow. Some say Cuba is never going to compete with us. But they now make 300 million cigars for the market, and you don't feel it that bad. But when they have the American market open, most likely most of the product is going to go there. The important thing is we continue to hold our niches in the American market, and whatever is left in the rest of the world, we can take opportunities in those markets.
Q: But you compete with Cuban cigars now: people in the United States get Cuban cigars now, not legally, but they get them.
A: Yes, it's true, but it's not the same as when you have, say, 50 million sticks around than when you have 200 million sticks.
Q: At that meeting, wasn't the prime area of concern for members the election of Ortega?
A: Most of the group was careful not to express too much anxiety. I don't think Ortega is going to break with the international organizations. It would be suicidal.
Q: Didn't Ortega say he was breaking from CAFTA [the Central American Free Trade Agreement] at his inauguration?
A: Ortega has never said since his inauguration he would remove Nicaragua from CAFTA, even though he signed ALBA [a cooperation agreement between Venezuela, Cuba and other countries promoting redistribution of wealth]. According to press reports, in the recent meeting Ortega held with the secretary of commerce of the U.S. in Ecuador, Ortega reaffirmed his commitment to hold to CAFTA in spite of the cooperation agreement with Venezuela. By now, Ortega should be clear in his mind that there is no return in terms of CAFTA, because such action would weaken not only Nicaragua, but would undermine any possibility of reaffirming a constructive and good working relation with the U.S. and his presidency, and I believe Ortega does not want that to happen.
Q: You know Ortega, probably better than anyone else in the tobacco industry. What kind of a man is he?
A: I met him for the first time in 1977. And then I worked with him in '78 in Costa Rica. I know the young Daniel, the middle Daniel and the older Daniel.
Q: Are they different?
A: The Daniel that I met in '77 and the Daniel in 2007 is a completely different Daniel. In '77 he was nothing; now he is a very eloquent, very intelligent, very able politician. Nobody can doubt that. He was able to split the vote of the right. He was able to maintain the party of which I am a member, and to act politically in searching for solutions to avoid having the party split. We worked together very closely in the 1980s, and we had our disagreements. When he lost in 1990, everybody thought Ortega was over. And nevertheless, he maintained the party. And even though he was in the opposition with no power, he was able to maintain that level of political acuity. The Ortega I am referring to, the Ortega of the 1990s, he was a negotiating Ortega. In the 1970s, he was a guerrilla. So he was always negotiating, and that made him open to the opportunity to continue building. Even though he lost three times, he continued to be the candidate of the party.
Obviously, he did things with which I completely disagree. He went against the rules of the party when he eliminated the possibility of a primary process in the last election, and that's why I opposed Ortega in that regard.
Q: So it was his doing that changed the election laws?
A: Yes. Negotiating with [Arnoldo] Alemán, who was then president, they changed the constitution, and they decided to move the level that [a candidate] needed to win from 45 to 35 percent, as long as the one that was behind you was five points behind.
Q: That's quite a difference. Was that when you decided to oppose him?
A: In 2001, I ran in the primary against Ortega, I respected the results when they were not favoring my candidacy, and I even worked for his candidacy. In '06 I told him, if you don't respect the bylaws of the party, I cannot support your candidacy. The party establishes that in order to establish the candidate of a political party, you go through a primary process. You don't do it by hand, which is what happened.
Q: So there was no vote to make him the candidate of the Sandinista party?
A: He was selected by his friends, who decided to violate the bylaws of the party. That's my criticism of Ortega. Once he won, I cannot oppose the fact that everybody else played by the rules, and the rules gave him the majority of the vote, regardless of how small or how big.
Q: Did you leave the Sandinista party?
A: No. I will continue fighting.
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