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Richard L. DiMeola

Executive Vice President, Chief Operating Officer, Consolidated Cigar Corporation
From the Print Edition:
Arnold Schwarzenegger, Summer 96

(continued from page 3)

CA: Let me just stop you for a second there. Was Montecruz a knockoff name of Montecristo?

DiMeola: Montecristo was made by Alonzo Menendez and Pepe Garcia in Cuba, and they got out of Cuba. Pepe Garcia went to Spain. He was actually Spanish. He bought the Menendez interest out, and started a company in the Canary Islands called CIT-- Compania Insular Tabacalera. He started making Montecruz--which was a copy of Montecristo--Don Diego, Flamenco and Don Marcos in the Canary Islands. Consolidated then bought CIT in 1972, and started to take over some of that distribution. In 1982-83, Consolidated moved from the Canary Islands to the Dominican Republic at the behest of [parent company] Gulf & Western, because they owned the land in La Romana. The company was also operating a tobacco processing operation in La Romana, because at one time Consolidated had their own fields in Connecticut. They were growing 2,000 acres. Sixteen hundred acres they owned or leased, and 400 acres were grown for them.

CA: How long ago was that?

DiMeola: Until 1981 or so.

CA: Who did they sell that land to?

DiMeola: I don't know who they sold it to. When I joined the company, Theo was still trying to sell off some of the old cheesecloth, because Gulf & Western also had begun requiring that the company use sheet [fabricated] wrappers on the mass-market cigars. So when they converted to sheet, it obviated the need for all that Connecticut wrapper leaf. So La Romana was originally used for tobacco processing. Consolidated actually got into the premium cigar business when they bought the Moro Cigar Co. in 1966. That was the producer of Primo del Rey. The Junco family came out of Cuba. They were growers in Cuba until 1961, when they left the country. They used to supply Consolidated with a lot of filler tobacco, because in those days, the domestic brands made in Puerto Rico used 35 percent Cuban tobacco and 65 percent Puerto Rican tobacco.

CA: It was really grown in Puerto Rico?

DiMeola: Some tobacco was grown in Puerto Rico then. So Consolidated helped the Junco family get started in Miami and they started making Primo del Reys. That was in 1961-62. In '66 they bought the company, and they moved the production in '69 or '70 to the Dominican Republic. So those were the first cigars that they started making in the Dominican Republic--Primo del Reys. It was folded into the tobacco operation, and as a result Consolidated had a cigar operation in La Romana, and then in '82 when the labor costs went up in the Canary Islands, [Consolidated was] told by G&W to move all of those brands out of the Canary Islands and into the Dominican Republic. José Seijas, in fact, worked for the company in the Canary Islands. He and his colleagues wanted to take five years to make that move, but the company required them to do it in 18 months, and that's when they contracted with some other manufacturers in the Dominican Republic to make Montecruz. They lost a little bit of control there. The move caused the quality to decline. The business started to decline. The competition got more active, and by the time I joined them they had gone through this change with the product of the previous management; distribution problems and so forth. When I got there, I had no sales organization and poor quality to deal with. There was a slowdown.

CA: What brands have been added since you joined the company?

DiMeola: When I joined, we didn't have a single powerhouse brand. When I joined the company, we asked: Which one should we focus on? Should we try to take H. Upmann and make it a powerhouse going against competition that was firmly ensconced, just taking the gamble that it would work, or should we go with Don Diego? Or should we create something new? What we did was sort of a shotgun effect. We threw the mud against the wall to see what would stick. We started to introduce new sizes within each of the brands. We developed a new range within Montecruz. We created the Montecruz natural claro. As soon as I got over to Consolidated, I started to pitch Dunhill--to make a Dunhill cigar, because having been with the Dunhill organization that owned Lane, I knew they were interested in a Dunhill cigar. They brought one in from the Canary Islands, and I told them I would still be interested in making a Dominican Dunhill for them.

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