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Dominican Dominance

Not so long ago, the Dominican Republic was a small player in the world cigar market. Now it leads the way.

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"I didn't want them to have worked with anybody else. They learned everything from us. They didn't have any bad habits," Fuente says. He began this policy in 1997, recruiting young, well-educated adults from middle-class families in Santiago. "Twenty years ago the Dominican Republic had a tobacco culture, but not a cigar culture. I think that we have helped build the cigar culture here that we have today."
The culture, in Fuente's own words, has been quality driven. Fuente doesn't judge his cigar rollers based on output. Many of his best rollers make 100 cigars or fewer a day. In addition, most use a cigar-bunching system called en tubado, whereby four or five leaves of filler are rolled into tiny tubes. It is an old system that originated in Cuba decades ago but is rarely used today as it is not time effective. "I think it is the best system, so I want my best rollers to use it," he says confidently.
Not all is good in the Dominican Republic. Scores of its cigar companies failed in the wake of the cigar boom, leaving behind inventories of cigars and tobacco. Bulk discounters bought the cigars from desperate owners (or the banks that repossessed their inventory of those who couldn't pay) and sold them on the cheap. Manuel Quesada, owner of Manufactura de Tabacos S.A. or Matasa, recalls turning down wholesalers who had asked him to supply tobacco at prices so low he would have to sacrifice quality and consistency. [Click here to read the interview with Quesada.]
Today, most of the lowest quality cigars are gone, but several cigar Dominican companies are supplying the discounters with handmade cigars for 25 to 30 cents apiece. Cigars can be made at those prices by skimping on production details and using unwanted tobacco, but they can't be made well, even with labor costs are at an all-time low due to the Dominican Republic's recent currency crisis. (As this story was being written, it took about 45 Dominican pesos to buy one U.S. dollar—a year earlier, it took only 20. Cigar companies have raised salaries, but workers are having difficulty buying items such as gasoline and even some foods. A national strike in protest of the president's handling of the crisis essentially shut down the country for two days in January, and more strikes were expected before elections in May.)
Once there were more than 100 cigar factories here, but today little more than a dozen are still in business. Tabacalera de Garcia, General Cigar Dominicana and Fuente are the giants, each making tens of millions of cigars annually. There are several midsize companies, such as Cigars Davidoff and OK Cigars, where Davidoffs and Avos, respectively, are made, as well as El Credito, Matasa and Tabacalera La Flor, where La Flor Dominicanas are produced. Philip Wynne has some of his Felipe Gregorio cigars made here, Cuevas y Toraño makes La Perla Habanas and other smokes, and the U.S. Cigar Sales factory makes several contract brands as well as Don Tomás Dominican.
The business has been boiled down to a select few, many of which were around before the boom and survived by not changing their patient ways of making cigars. The result is that the quality of Dominican cigars is superb, and consumers seek them out.
Picky consumers. "Forget about good," says Gomez, reflecting at the end of a day on his La Canela farm. "You have to come out with outstanding stuff. Very good is not enough anymore." He pauses, taking another puff from one of his cigars. "But it's very easy to work that way. You can keep your focus on where it should be."
James Suckling contributed to this report.
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