The new U.S. travel restrictions are adversely affecting the Cuban economy. But the cigars are getting better.
It was 9 p.m. Seven Americans sat in the eighth-floor penthouse overlooking the Plaza de San Francisco in Havana, smoking Dunhill Cabinetta Robustos and waiting for the third and final U.S. presidential debate to start. Seven-year-old Havana Club rum was flowing freely and so was the commentary on the prospects of the presidential debate and the election.
How surreal is all that?
Only two of the Americans were there legally, and I didn't want to be judgmental, but they looked like the furthest things ever from priests on a humanitarian mission to Cuba. My buddies, Captain Jack Fantastic and Don Juan Coyote (I can't use their real names because someone with the U.S. Treasury Department probably will read this), certainly weren't in Havana to go to church. They had already smoked more Cuban cigars in three days than some people may have in a lifetime. They were having the time of their lives.
Travel to Cuba for most Americans has been illegal since the early 1960s when the embargo was imposed, but it has been cut back even more following the introduction of new travel restrictions last July. Even before the new rules were imposed, I had friends who had been fined thousands of dollars by the Treasury Department for making illicit trips to Cuba. But the prospects of paying Uncle Sam for going to the island didn't seem to inhibit Captain Jack and Don Juan. They obviously were on a Cuban cigar smokers' mission.
I hear from Cubans as well as sources in Miami that the new travel restrictions have dramatically reduced American visitors to the island. According to estimates, more than 100,000 Americans (mostly Cuban Americans) used to annually travel to Havana and other parts of Cuba. It's now expected to be half that number or less. The main reason is that Cuban Americans are no longer allowed to travel once a year to the island to visit relatives. Now they can go only once every three years. In addition, the U.S. government is issuing fewer travel licenses for Americans traveling to Cuba for humanitarian, religious and cultural purposes. Trips for cigar smoking are definitely off!
I visited a handful of cigar shops during a five-day visit to the island in October and they were all moaning about the loss of business due to the change in U.S. travel restrictions to Cuba. The stricter regulations also no longer even allow legal American travelers to the island to return with $100 worth of Cuban products, which for many usually included a box of cigars. Combine this with a 30 percent increase in cigar retail prices in June, and some cigar merchants say that their business is down as much as 60 percent.
"It's an absolute disaster," said one veteran cigar merchant who is arguably one of the island's most knowledgeable tobacco men. It's better not to mention his name for obvious reasons. "It's just too expensive. People have sticker shock. Cigars that cost $180 [a box] earlier this year are now more than $230. My customers are shocked."
A shop attendant in another store, who also wished to remain anonymous, said, "What am I supposed to say to my customers when they ask me why the prices have increased 30 percent? I have to tell them the truth. There is no reason at all and the decision was wrong. Whoever made the decision is an idiot."
Here are a few examples of the prices now for cigars in Havana shops: Montecristo No. 2, $172.50; Cohiba Esplendido, $458.75, Partagas Serie D No. 4, $151.25; Punch Punch, $151.25; Romeo & Julieta Churchill, $202.50; Partagas Lusitania, $220; Montecristo No. 4, $100; Ramon Allones Gigantes, $210; and Partagas 898, $192.50. These prices are all for boxes of 25 cigars.
"It may not look like much still to some Americans, but the prices are actually 35 percent more expensive, because we had a 5 percent price increase at the beginning of 2004 besides the 30 percent one in June," said another cigar merchant in Havana. "It hurts."
I admit that the cigars in Havana are no longer dirt-cheap, but if you compare them to some markets in Europe, they still are very affordable. If you normally buy your cigars in the United Kingdom, you could easily pay for your flight to Cuba through the savings in a half dozen boxes of smokes—that is, if you didn't declare the number of cigars over the 50 with which you can enter the European Union without paying duty. However, the price difference is much less obvious in markets such as France and Spain, where taxes and retailer margins are some of the lowest in Europe. The new prices in Havana are very close to those indeed.
I ran into someone with Habanos S.A., the global distributor for Cuban cigars, at the cigar shop at the La Corona factory. He explained that the price increases were supposed to adjust prices to about 20 percent lower than Spain's. "We may have to fine-tune some prices because they may not be right, but we want to be at that level in Cuba," he said. "The prices were too low."
He said that the primary reason for the decline in sales at the beginning of the summer was the general falloff in tourism on the island and that it had nothing to do with higher prices. In fact, I spoke to a number of friends in the restaurant and hotel business in Havana and they were moaning almost as loudly as the cigar merchants about their decline in business. Some said that tourism was down as much as 50 percent, and with electricity and gasoline shortages and a string of hurricanes during the fall, they expected the situation to get worse before it got better. Furthermore, the Cuban government had not banned the use of dollars on the island when I was there, but I presume that new regulation only added to the gloom.
However, the joint head of Habanos, Fernando Domínguez Valdés-Hevia, told me that none of the current problems in Cuba have adversely affected the production of cigars. Moreover, the hurricanes had very little or no effect. I visited the key tobacco-growing regions in Pinar del Río. I could not find any damage except for a few loose roofs on tobacco-drying barns. The tobacco was not in the fields or drying barns anyway during the storms. What was in storage, or being processed in warehouses throughout the area, was untouched, Domínguez added.
Politics and bad weather aside, the Cubans should continue doing what they are to make cigars. The taste and the quality of the new cigars in the local marketplace, which primarily carry box dates from August 2004, are excellent. And they draw like a dream. I smoked about 15 different brands and shapes of current smokes and I didn't find a bad one. Captain Jack and Don Juan certainly had smiles on their faces when they had lit up. And they were treated like long-lost relatives when they arrived in Havana cigar shops.
"You're Americans!" said most of the managers of the cigar shop when Captain Jack and Don Juan arrived. "Please come in!" The shop attendants' eye sockets looked like slot machine windows full of dollar signs.
What I was really impressed with, however, was the taste of these new cigars. The Bolivars tasted like Bolivars, the Hoyos tasted like Hoyos and the Partagas tasted like Partagas... that is, rich and strong, smooth and refined, and earthy and spicy, respectively. It reminded me of going to Havana in 1995, when you could buy any box you wanted and it would be excellent quality, and the cigars showed their respective brand's style and character. Back then, the only concern was finding the color of wrapper that pleased you.
Quality isn't yet back to 1995 levels in Havana today. You still have to spend some time going through boxes to find the best cigars. I usually push on a cigar or two with my thumb to check that they are not overfilled, which often leads to tight draws. But overall, the new sticks I saw in Havana in October looked very, very good.
In addition, I smoked nearly all the new limitadas for 2004 and they were very good to excellent. I particularly liked the Cohiba Sublimes, which measures 6 1/2 inches by 54 ring gauge, and scored it a provisional 95 points. The cigar was a massive smoke with loads of coffee and tobacco character. It burned perfectly due to its large girth. The Sublimes were not officially in the market yet, but Don Juan had scored a few from friends in factories. I was also offered a number of boxes right in front of La Corona from street hustlers, but I am sure the cigars were fakes so I didn't take them up on their offer.
I was also impressed with the Romeo y Julieta Hermoso No. 2, which measures 6 1/8 by 48. It was a soft, round smoke with lots of coffee and spice character, and was rich and delicious on the palate. I gave it 94 points, but it will be better in two years or so. The Partagas Serie D No. 1 also needs some time to come together and seemed to lack a finish. Maybe it was too young? Or the blend was not perfect? But I gave the 6 5/8 by 50 cigar a score of 88 points. The final limitada for 2004 is the Hoyo de Monterrey Epicure Especial, which measures 5 1/2 by 50. I was given a prototype of the cigar and it was rich and powerful, although I have not smoked the final product.
Captain Jack and Don Juan were very keen on the Petit Robusto from Hoyo, which measures 4 1/16 by 50. They liked the idea of a thick and quick smoke. But I found the two I smoked rather hot and peppery due to the burning ash being so close to my palate. Maybe it was a question of being too young, but I could muster only 89 points for the new smoke. I smoked the same cigar a few weeks later in Tuscany and found the same problem, but it was slightly less harsh.
Of course, the Petit Robusto couldn't compare with the Dunhill Robusto that I smoked in Havana that night during the presidential debate. I have scored that aged Cuban cigar 100 points in the past and it didn't disappoint that night as we watched the debate. It was a shame that the debate was everything but perfection—even watching it in Havana.