Cuban cigar sales rise, defying flat luxury goods market

Cuban cigar sales rise, defying flat luxury goods market
on February 26, 2015.

Sales of Cuba's legendary cigars rose 5 percent last year to $445
million, defying stagnation in the global luxury goods market,
manufacturer Habanos said on Monday at the opening of the Caribbean
island's annual cigar festival.

Habanos, which makes brands including Cohiba, Monte Cristo and Romeo y
Julieta, said it expects moderate sales growth this year as it continues
to tap the Middle East, Asia and other new markets.

"We are quite happy we were able to grow during a year that was in truth
quite challenging," Vice President of Development Javier TerrΘs told
Reuters after holding a news conference hazy with smoke as journalists
puffed on complimentary cigars.

Cuba's monopoly cigar company was kicking off the festival that attracts
wealthy tobacco aficionados and retailers from around the world for five
days of extravagant parties and tours of plantations and factories.

Habanos dominates the global market for hand-rolled, premium cigars
except in the United States due to Washington's half-century trade
embargo against Cuba. The United States is the world's biggest cigar market.

American enthusiasts have had slightly better access to Cuban cigars
since former President Barack Obama two years ago unveiled a Cuba policy
aiming to normalize relations.

Last October, the Obama administration removed limits on the amount of
cigars American travelers could bring home.

TerrΘs said this made little difference to overall sales but it would
help brand recognition in the United States.

Wholesale shipments there would require the U.S. Congress to lift the
embargo, a move that looks uncertain under President Donald Trump, who
has threatened to reverse the detente.

Still, better U.S.-Cuban relations have helped stoke a boom in tourism,
which in turn has lifted cigar sales in Cuba, according to Habanos. The
number of visitors to the island rose 13 percent last year.

"Our sales in Cuba are directly related to tourism, and in effect, sales
in Cuba have grown," TerrΘs said.

Habanos said its traditional European markets had remained stable last
year, while there was growth in emerging markets like the Middle East
and Pacific Asia.

Meanwhile, female smokers remain a largely untapped market for Habanos,
TerrΘs said. The company is working on it but has learned that producing
smaller, milder versions of its classic cigars is not the answer.

"Actually, women want to smoke big cigars and enjoy them like a man," he
said, adding it was important to draw in women with specific promotional
events.

Source: Cuban cigar sales rise, defying flat luxury goods market -
http://www.cnbc.com/2017/02/27/cuban-cigar-sales-rise-defying-flat-luxury-goods-market.html