China Becomes No. 1 Market For Cuban Cigars
Cuba has a new No. 1 market for its cigars. “For the first time in our history, China has become our No. 1 market in the world,” said Leopoldo Cintra González, the commercial vice president for Habanos, at a virtual press conference from Havana this morning.
China rose from the No. 2 position in 2019, and overtook Spain, Cuba’s previous No. 1 and one of the longstanding, traditional markets for major Cuban cigar sales. Sales to China—which include not only mainland China, but also Hong Kong and Macau—have been extremely robust over the past six years, growing by more than 50 percent during that period. Last year alone, sales to China were up by five percent, said Habanos.
Cuban officials made note of celebratory cigars created specifically for the Chinese market, geared around Chinese New Year, such as the Hoyo de Monterrey Primaveras Year of the Ox. They hinted that there would be a new one for the next new year.
The press conference, part of the all-virtual Habanos World Days event that kicked off today, discussed the financial results for Habanos S.A. The good news from China was offset by the expected bad news about 2020 in general. Habanos reported a four percent drop in revenues, to $507 million. The drop was due, of course, to the coronavirus pandemic.
“2020 has been a challenging year, not just for our business for humanity,” said González. Cuba itself is one of the nations hardest hit by the virus, and the disease has caused the country to largely shut down its borders to tourism. Tourist dollars are a huge source of revenue for Cuba, and cigars are no different. Cuba herself is a major market for Cuban cigars, traditionally a top five market, one that Habanos considers an “export” market given that the purchases are almost entirely made by tourists who take the cigars back home.
The impact on Habanos’ sales in its home country was considerable. Discounting Cuba, Habanos said the company’s losses would have been halved, to only two percent.
While China ranks No. 1, as a region Europe is still the biggest for Cuban cigars. In 2020, 60 percent of Habanos sales came from Europe.