Cuban cigar sales drop amid global crisis

Cuban cigar sales drop amid global crisis
By Jeff Franks, ReutersFebruary 23, 2009

Cuban Jose Manuel Soto, better known as 'el Gran Taita,' prepares to
smoke a cigar in Old Havana last December. Sales of Cuban cigars,
considered the finest in the world, dropped three per cent to $390
million in 2008 as the world financial crisis and the spread of
anti-smoking laws cut demand, officials said Monday.

Cuban Jose Manuel Soto, better known as 'el Gran Taita,' prepares to
smoke a cigar in Old Havana last December. Sales of Cuban cigars,
considered the finest in the world, dropped three per cent to $390
million in 2008 as the world financial crisis and the spread of
anti-smoking laws cut demand, officials said Monday.

HAVANA - Sales of Cuban cigars, considered the finest in the world,
dropped three per cent to $390 million in 2008 as the world financial
crisis and the spread of anti-smoking laws cut demand, officials said
Monday.

The falling sales reflected a decline in the market for luxury products
in general as global economic worries mounted, said Manuel Garcia,
vice-president of Habanos S.A., the worldwide distributor of Cuban cigars.

Speaking at a press conference kicking off Cuba's annual cigar festival,
he said 2009 was likely to be a "very complicated" year, but Habanos
expected to maintain sales at around the 2008 level.

Three hurricanes raked Cuba last year, including powerful Gustav which
cut through the heart of the island's prime tobacco growing state of
Pinar del Rio, but Garcia said they had done minimal damage to tobacco
supplies.

"Luckily, there was no effect on the harvest and there continues to be
sufficient raw material to meet demand," he said. Thousands of tobacco
curing barns were damaged by the storms, but most were rebuilt in time
for the curing season, Garcia said.

Garcia said laws prohibiting smoking in public places had gone into
effect in various countries last year, including some that are big
customers for Cuban cigars.

Also, the number of worldwide airline passengers had fallen by a
reported 11 per cent, he said, which slowed the "duty free" market where
Habanos sold about a quarter of its cigars.

He said the top global markets for Cuban cigars, which include
well-known brands such as Montecristo, Cohiba, Partagas and Romeo y
Julieta were, in descending order, Spain, France, Germany, Cuba and
Switzerland.

Due to the 47-year-old U.S. trade embargo against Cuba, the
communist-led island's cigars cannot be sold legally in the United
States, the world's largest cigar consumer.

New U.S. President Barack Obama has promised to ease, but not eliminate
the embargo.

If it were lifted, "it is probable that an opening of that market would
signify a great possibility and great potential for our products,"
Garcia said.

Cuban cigars are so popular that Habanos, a joint venture between Cuba
and British tobacco giant Imperial Tobacco Group PLC, has about 70 per
cent of sales in its current markets, said vice president of development
Javier Terres.

He said an estimated 230 million to 250 million cigars will be smoked in
the United States this year.

Cuban cigar sales drop amid global crisis (23 June 2009)
http://www.edmontonjournal.com/Health/Cuban+cigar+sales+drop+amid+global+crisis/1320807/story.html