An Interview with Oscar Boruchin
Owner of Licenciados and 8-9-8 Collection cigars.
Marvin R. Shanken
From the Print Edition:
Wayne Gretzky, Mar/Apr 97
(continued from page 4)
CA: You haven't been able to build up inventories?
Boruchin: Not on the major brands.
CA: Have you ever been able to keep large inventories for an extended period?
Boruchin: Not really. We always turned over stock, even though we keep a large inventory because of the nature of our business. But we kept reordering practically every week. The merchandise used to be available. What is not available anymore is deals. Everybody used to wheel and deal at that time to compete. And merchandise could be bought cheaper. It's been one of our main concerns because we were always consumer-oriented. But we are a consumer company and we were always trying to give the consumer the best deal available. It's been tougher now. We are not able to offer the consumer the same business that we did before. Merchandise is so short. It's impossible to get the deals that we used to get before.
CA: Let's change the subject. You are Cuban-American, living in Miami and in the cigar business. Doesn't that put you at the center of a hurricane?
Boruchin: Definitely. When you live in south Florida and you have a million Cubans, the subject of Cuba is unavoidable. It's subsiding a little now. The conservatism of the Cubans of 10, 15 years ago is not that much anymore. For me, a Cuban cigar is the best cigar in the world. I don't care who gets mad. But I don't sell them, and I fight anyone who does because today, Cuban cigars are my biggest competitor. I'm located in an area where most of my customers are affluent people. They all have access to Cuban cigars. Sometimes they are counterfeit, because the popularity of the Cuban cigar has brought counterfeits into the picture. But whether they are real or counterfeits, I'm losing a tremendous amount of revenue because these people would be smoking the cigars I sell. Still, I am not that crazy to say or that ignorant to say that it is not the best cigar in the world.
CA: Have you noticed any change in attitude in the old guard about what the community's relationship should be with Cuba?
Boruchin: Because of the children, who have been born post-1960 and raised here, the thinking today is much more realistic. I'm not saying that the Cubans here like Castro. He's been in power for over 30 years and there's still no freedom in Cuba. Fidel knows that. He's been told by everybody. So the thinking about the government of Cuba is probably the same. But the feeling, people to people, is different. The people who live there don't have a choice to elect the government. But they're Cubans. The Cubans who live in Cuba and who live in Miami are the same. It's just a geographical situation. My feeling is that there won't be a revolution in Cuba. Everybody knows that. I don't care how conservative a Cuban is here in Miami, he knows Castro isn't going to come down by force. So the thing is to come to a political solution. Maybe it will be created by the Pope coming to Cuba. One thing we know is that people want to live better. If the embargo didn't exist and the relationship between Cuba and the United States were more normal, I think Cubans would have it easier creating a more democratic society. The isolation makes it harder.
CA: When I speak to people in the cigar trade, they all seem to hope that they can return home to Cuba someday. Do you feel there's been enough interest on the part of Cuban-Americans to help their countrymen, or is the focus on making the embargo stronger really hurting the people left in Cuba?
Boruchin: It hasn't worked. At one time they felt that it would work. Some people still feel that way. But not the younger people. You can see it in the last elections. For a Democrat to obtain more than 5 percent of the Cuban vote in Miami used to be unheard of. However, Clinton got 30 or 35 percent of that vote. I think a lot of people have changed their minds.
CA: But many Cuban-Americans still have relatives back in Cuba. They know that these people are deprived of basic necessities, which means the basic welfare of the people keeps declining. To me, it seems they have been so preoccupied with getting Castro out, that they've forgotten the people.
Boruchin: It's true, to a point. But, individually, you would be dumbfounded to find how many millions of dollars have been sent to immediate relatives. It's been food, medicine and even money. Even though it's technically prohibited this year, there is a tremendous amount of goods flowing through Canada, Mexico, the Bahamas, the Dominican Republic. It's a tremendous business and it's a tremendous amount of money. It's just not a policy.
CA: When do you think the embargo will be lifted?
Boruchin: I thought that if Castro didn't make that mistake of bringing those planes down [in February 1996], Clinton would have lifted the embargo before the elections. I think he had more to gain in votes than to lose. Many of those votes in Florida, he wasn't going to get anyway. But he is under tremendous pressure by the industry in this country, by the business community, that see Italians, Spaniards, Canadians and Englishmen who are doing a tremendous amount of business with Cuba. We are so close to the island and we can do business with Cuba.
CA: Is it a year away, two years away, five years away?
Boruchin: I think before Clinton leaves, he will lift the embargo.
CA: If the embargo is lifted...
Boruchin: I'll be in Cuba on the first plane.
CA: How will that affect the cigar market in America?
Boruchin: It would be tremendous for the cigar market. At one time, the only thing that we thought was going to help the cigar industry was the lifting of the embargo and the Cuban cigars coming into the market. Now, we have this tremendous boom, and we still have the day ahead when Cuban cigars will come into the United States. I think it would help. I think that the news media, the papers, the advertising, the charisma that is going to come in the market, together with the cigars, is going to be tremendous. Don't forget. These Cuban cigars will be at a different price level. Not everybody can afford to smoke these cigars. But a lot of people are going to try them in the beginning, and the cigars will find their niche. They'll find their niche with certain consumers. It still is not going to hurt the industry. If anything it is going to help.
CA: In your judgment, do you think the boom in cigar sales is a fad? And if so, why? And if not, why not?
Boruchin: I don't think it's a fad. I don't spend as much time on the floor taking care of customers like I used to. But the little time I spend in the store, I see these young people, 25 to 30, coming in. I see it in my family. We have a large family. I have maybe six cousins that had children. The children are all young professionals. I don't think there's one of them that doesn't own an Elie Bleu humidor. Whether they smoke two cigars a week or three cigars a week, they like to smoke cigars. If you look at a guy who is 23, 25 and is smoking and is crazy about it, even if we lose a percentage of them, you have somebody there that has 50, 60 years of smoking ahead of them. I won't see the end of this in my lifetime. Of course, everything in life reaches a ceiling. This won't be an exception. But the cigar business is going to be a tremendous business for a long time to come. I only see one danger. That's government restrictions. Before, nobody cared, but as we grow, as the industry grows, our enemies are going to grow. So, we are going to have to face in the near future a barrage of tremendous bad publicity.
CA: Hasn't that already started?
CA: There's so much disinformation about cigars; using cigarette studies to compare smoking habits of cigar smokers is one popular example. How should we fight it?
Boruchin: There's one thing they can't fight. I smoke about 10 or 12 cigars a week. I could go a month without smoking, without any problem. Cigars are not addictive. Nobody can say: "I can't live without cigars." You can be three days without smoking. You can pick up a cigar three days from now and smoke. So, the addiction that they criticize for cigarettes doesn't exist with cigars. And nobody inhales cigars; if they do it's a very small percentage. The danger of getting sick from cigar smoking is very small. They are going to have a tough time convincing the intelligent consumer of today who smokes in moderation.
CA: Do you feel that the proliferation of all the new brands on the market, some of which are not very well made or quality cigars, presents a potential problem for the industry?
Boruchin: Yes, even though I think this phase will pass. For example, look at the explosion in new tobacco stores. There're not enough cigars to go around for them. A lot of the cigars are just maybe being spread too thin. And some of those new cigars are coming in at extravagant prices. But if you look at the national brands--H. Upmann, Don Diego, Macanudo, Partagas, Bauza, Licenciados, Astral, the regular brands--they are still selling for below $5. Now you get a new cigar maker that bought tobacco last week, stole three cigar rollers and makes a cigar trying to sell it for $8 and $10. They are just ripping off the public. That's going to disappear.
CA: How would you describe, or how would you rate, the quality of these new brands?
Boruchin: Some of them are great. Some of them are garbage. Some of them are garbage in, garbage out, because they don't get the right tobacco, they don't get the right cigar makers, but they still come in to make a killing. This is not the people like us. Many people in the cigar business have been in it for 50 years. But these others just come in to get rich quick. Either they are going to try to go into the stock market and make a killing in the stock market or they are going to try to sell bad product. There is a scarcity of good product in the stores, which allows these newcomers to come in. These retailers need merchandise to sell. Eventually people will realize they are paying a tremendous amount of money for cigars that aren't worth it.
CA: You mentioned the problem with counterfeit Cubans. Is that a new phenomenon?
Boruchin: That never happened five years ago. This is happening since the Cuban cigars have become very popular, together with the cigar industry. Everybody sees it as an opportunity to make money.
CA: In terms of the counterfeit cigars in Miami, are they made in Cuba or are they knock-offs from other countries?
Boruchin: Some come from Cuba. They've been bought on the street there. But the majority are made in the Dominican Republic and Honduras.
CA: And the consumer doesn't know?
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