Kazakhstan’s Ministry of National Economy wants to introduce excise taxes on high-end cigars and other luxury items, reports The Times of Central Asia.
The goals of the new taxes are “to equalize the socioeconomic situation of different segments of the population, to increase the nation’s revenue and to regulate consumption of certain goods,” according to the ministry.
In its proposals, the ministry acknowledged that potential reductions in consumption of the impacted luxury goods, along with the cost of administrating the new taxes, might offset any additional income generated.
The new amendments are also forecast to harmonize excise on general tobacco. Current legislation already provides for a gradual increase in excise taxes on cigarettes, which are due to reach $30.6 1,000 cigarettes this year.
The ministry’s document is publicly available for discussion until March 27, with the new tax code expected to be adopted in October of this year.
Chinese liquor company Luzhou Laojiao and Cuban cigar company Habanos SA have signed a strategic agreement to jointly expand their markets.
During the 24th Habano Festival in Havana, Cuba, Zhang Biao, general manager of Luzhou Laojiao, highlighted the similarities between Luzhou Laojiao’s liquor and Cuban cigars, noting that the cooperation will strengthen the commercial ties between China and Cuba.
The agreement includes a joint product through co-branding, with the Chinese company handling the marketing. José María López, vice president of development at Habanos, said that this partnership is based on shared values such as craftsmanship, quality and leadership, highlighting the “perfect match” between Chinese liquors and Cuban cigars.
Habanos executives reported that China is one of the most dynamic markets for Cuban cigar sales. The country contributed heavily to a 31 percent increase in Cuban cigar sales in 2023, reaching a total of $721 million.
The signing of the Memorandum of Understanding aims to explore new avenues of cooperation for both companies. Luzhou Laojiao, one of China’s oldest liquors, has been produced in the National Treasure Cellars since 1573, with distillation technology dating back 700 years.
The collaboration will focus specifically on Luzhou Laojiao’s “Guojiao 1573” brand and Habanos Corporation’s Cohiba Atmosphere brand. In addition, seven Guojiao 1573 brand liqueurs were auctioned along with during the festival’s humidor auction, with the funds raised going to public health initiatives in Cuba.
“This strategic agreement strengthens commercial ties between China and Cuba in the liquor and cigar industries,” according to a press release.
Scandinavian Tobacco Group (STG) delivered net sales of DKK8.7 billion ($1.27 billion) in 2023, down slightly from the previous year.
For the fourth quarter of 2023, net sales were DKK2.3 billion. Organic growth of 5 percent for net sales was driven by the group’s “growth enablers,” which in the fourth quarter accounted for close to 10 percent of group net sales, as well as an improved performance in the machine-rolled cigar business in Europe.
The growth enablers comprise three opportunities that currently represent a small proportion of the group’s overall business but that have significant potential to contribute to greater net sales and earnings, according to STG. They are continued retail expansion in the U.S., international growth in handmade cigars and development of next-generation products, such as nicotine pouches and hemp products in key markets.
For the full year 2024, net sales are expected to be in the range of DKK8.8 billion to DKK9.1 billion.
“Despite a challenging consumer environment STG delivered solid results for 2023 due to the commitment and performance of our employees across the globe,” said STG CEO Niels Frederiksen in a statement.
“We continued to execute well on our strategy with two acquisitions, and I am particularly happy to see the progress in our growth enablers, where we saw healthy growth in international handmade cigars, retail expansion and next generation products. As we move into 2024, we are increasing our investments in the growth enablers and we expect 2024 to be a year of growth for STG.”
At the annual general meeting on April 4, 2024, the board of directors will propose an increase in the ordinary dividend of 2 percent to DKK8.40 per share, complementing the up to DKK850 million share buy-back program, which was started in Nov. 2023.
Ana Isel Mederos Cano (Photos Special to Tobacco Reporter)
Activities during the 2024 Habanos Festival usually only vary slightly. However, this year, attendees were allowed to roll a cigar alongside professional rollers at one of five factories. It marked the first time the festival hosted its master rolling class in the same buildings where Habanos cigars are produced.
Daymi Difurniao Rodríguez, communications and marketing specialist for Habanos, said that the venue change was to allow more attendees to learn firsthand about the “Totally by Hand” production process of a Habano.
“I wanted the press to make their own Habano so they could understand the details and intricacies involved in creating the Habanos, the world’s finest cigars,” she said.
The torcedor (cigar roller) who taught the El Laguito class was Ana Isel Mederos Cano, main quality specialist at El Laguito. She is also a nominee for the Habano Woman of the Year award in the production category for the XXIV Habano Festival currently taking place in Havana.
She has been at El Laguito for 25 years, 11 of them as a roller and the past 14 in her current position.
“I love that I have been given this opportunity to teach the art of cigar rolling to the representatives of media from around the world,” she told Tobacco Reporter.
The venue change was a welcome addition, according to several festival attendees. A seasoned festival media participant, Nicholas Syris of LH Cigars and several cigar podcasts, who also rolled at El Laguito, said the personal attention from the professional rollers helped festival goers learn the challenging art of rolling cigars better than in a large conference room setting.
“It was really good. It was a nice addition to the festival,” he said. “I would say many more people rolled a smokable cigar than previous editions of the festival.”
Visitors had the opportunity to visit La Corona, Partagás, H. Upmann and Carlos Baliño. El Laguito was for media only.
La Corona has about 750 employees, 300 of which are dedicated rollers. The rollers produce brands such as Hoyo de Monterrey, Montecristo, Cuaba, Diplomaticos and San Cristobal de la Habana.
At the H. Upmann Factory, H. Upmann, Montecristo, and Romeo y Julieta, and sometimes several sizes of Cohiba are produced. Partagas is one of Havana’s iconic factories and Carlos Baliño is the former El Rey del Mundo factory.
Tobacco Reporter was only permitted to attend El Laguito, the legendary home where many of Habanos’ premier marcas are produced.
Festival roller trainees were given a wooden board to roll, a “chaveta” tobacco leaf cutting blade, some vegetable glue, and an apron. Several factory rollers made rounds around the room helping festival attendees roll their cigars.
“I love this new idea,” said Brooks Whittington with Halfwheel, a major industry cigar information website. “While the rolling competition has always been a favorite part of the festival for me, getting to roll the cigars at the actual factory we were visiting took the experience to the next level.”
Many other attendees said they hope the tradition continues. The 2024 Habanos Festival is being held in Havana from Feb. 26 – March 1.
Corporacion Habanos generated revenues of $721 million in 2023, up 31 percent compared to the previous year.
“The achievements of Habanos S.A. during 2023 are the result of the recognition of the unique origin of our tobacco, the strength and prestige of our brands, and, of course, the passion shared by all those involved in this fascinating world of Habanos,” Habanos’ co-presidents, Maritza Carrillo Gonzalez and Luis Sanchez-Harguindey, were quoted as saying in a press note.
“Thus, we celebrate 30 years of Corporacion Habanos, S.A., offering unparalleled moments and experiences to all lovers of premium tobacco in every corner of the world.”
With 27 brands and a presence in more than 130 countries, Habanos attributed its performance to “excellence, tradition and innovation.”
The company’s products are available on five continents. During 2023, the markets that contributed most to Habanos’ sales volume were Spain, France, China, Germany and Switzerland. By region, Europe remains the leading market for Habanos, accounting for 56 percent of total sales value, followed by Asia (21 percent), the Americas (13 percent) and Africa and the Middle East (10 percent).
In 2023, the company launched 31 new products, including Cohiba Siglo de Oro, Cohiba Ideales, Romeo y Julieta Cupidos, Hoyo de Monterrey Monterreyes No. 4 and Bolivar New Gold Medal.
During the Habano Festival this week, the company will be unveiling several additional products.
Havana is decked out to welcome experts and premium tobacco enthusiasts at the 24th Habano Festival, to be held from Feb. 26-March 1, 2024. This year, the festival not only honors the rich heritage and tradition of Cuban tobacco with special celebrations for the anniversaries of renowned brands such as Quai D’Orsay and Trinidad, but will also look back on 30 years of success for Corporacion Habanos.
The Festival will kick off with the opening of the trade fair, a key meeting point for industry professionals, manufacturers of premium products and artisans, which this year welcomes 85 companies from 11 countries. That same night, the Club Habana will be the venue for the welcome evening, to commemorate the 30th anniversary of Corporacion Habano.
The Quai D’Orsay brand will be the star of the mid-week Evening at the Cubanacán Protocol Lounge in El Laguito. During the event, attendees will participate in a tribute to the brand’s 50th anniversary and discover this special vitola, in its world premiere presentation.
The Gala Evening will take place in Hall C of the Pabexpo Fairgrounds. This will mark the beginning of the “Trinidad Year,” during which its 55th anniversary will be celebrated, and some of the most important launches for the brand will be enjoyed. On this last night, as on previous occasions, awards will be presented to the winners of the final of the Habanos World Challenge contest as well as to the winners of the long-awaited Habanos Awards, a worldwide recognition to those who in 2023 supported Habanos the most in terms of communication, business, and production. The final highlight will be the traditional Humidor Auction, which this year will feature novelties for attendees, and whose proceeds will go, as usual, to support the Cuban Public Health System.
The traditional visits to plantations will take place in the zone of Vuelta Abajo, in the Pinar del Río, recognized worldwide as the best land to grow tobacco. In addition, attendees will have the opportunity to visit the Habanos factories of La Corona, Partagás, H. Upmann and Carlos Baliño, where they will be able to learn first-hand about the “Totally Handmade” Habano-making process and take part in a Habano-rolling master class in which they will be able to make their own Habano.
The international seminar will feature presentations such as “Two Cities United by Habanos,” focusing on the Quai D’Orsay brand, and the panel “Trinidad: Past, Present and Future” which will delve into one of Habanos’ most prestigious brands. Besides, exclusive pairings will be offered, such as Taittinger champagne with Habanos Trinidad, Quai D’Orsay and San Cristóbal de Havana. Or the very popular Habanos Moments with the best rums and the finest wines. The seminar will close with the final of the Habanos World Challenge contest, where aficionados will be able to put their Habano knowledge and skills to the test to prove they are the most knowledgeable as far as the universe of Habanos is concerned.
David Ozgo is moving on from his position as president of the Cigar Association of America (CAA).
In a statement, the CAA acknowledged Ozgo’s committed service to the association.
“In his time at CAA he modernized the association’s public relations and social media capability,” the organization wrote on its website. “His op-eds and interviews have been valuable in communicating industry positions. Additionally, his hard work brought in several new members. We wish David all the luck on his next venture.”
CAA’s board of directors will be embarking on a search for new executive leadership.
The U.S. Food and Drug Administration on Jan. 31 appealed an August 2023 court ruling vacating the agency’s decision to regulate premium cigars, reports Halfwheel.
The court ruling stemmed from a lawsuit filed by the Cigar Association of America, the Cigar Rights of America and the Premium Cigar Association (PCA).
In 2022, Judge Amit Mehta issued an opinion examining the rulemaking record and detailing the FDA’s failure to address evidence in the record showing that premium cigars have different usage patterns, with different resulting health effects, than other cigars. Mehta later ruled that the FDA’s mishandling of significant questions that the FDA itself asked in its proposed rule merited vacating it, as the FDA never made a nonarbitrary decision to regulate premium cigars.
In its appeal, the FDA urges the court to elevate deference to the agency’s “scientific judgment” over its duty of explanation under the Administrative Procedure Act. The FDA also argues that Mehta should have sent the flawed rule back to the agency to fix it while allowing the FDA to continue regulating premium cigar retailers and manufacturers under the arbitrary rule in the meantime.
In a statement, the PCA said it would be responding to the FDA’s arguments and defending Mehta’s opinion in a forthcoming filing with the D.C. Circuit Court. A hearing before three judges of the appellate court is likely to follow.
Luciano Cigars and Peter James Co. have announced the launch of Peter James Cigar Co., a new joint venture that will include cigars and accessories released in the near future.
According to Luciano Meirelles, the new entity is a joint venture equally owned by Peter James Co. and Meirelles and his business partner, Tiago Splitter. The new company will hold the Peter James trademark in the U.S. as well as other trademarks for future products, according to Halfwheel.
The two are working on a new cigar that will be launched in March, though details about its specifics have not been announced. However, the cigars will be produced at the Luciano Tabacos S.A. factory in Estelí, Nicaragua, and Luciano Cigars will distribute them.
“This partnership is an extraordinary moment—a fusion of expertise and passion,” said Meirelles in a press release. “My love for the Peter James brand goes beyond their craft and luxury products.
“There is an intentionality in everything they do: even the smallest details reveal beauty where most people won’t see it. That act of generosity carries beauty and passion into our world. We couldn’t be more excited for what’s to come.”
Quality Importers Trading Co. (QI) has rejoined the Cigar Association of America (CAA) after over a decade absence.
CAA President David Ozgo stated, “Quality Importers Trading Co. is one of the world’s leading suppliers of the highest quality cigar accessories and accoutrement to the cigar trade. It is an honor and a privilege to be able [to] represent them as we advance sound public policies for the cigar sector in Washington, D.C., and the states.”
Founded 24 years ago by Mike Giordano and based in Weston, Florida, USA, Quality Importers Trading Co. is a B2B product innovator, importer, distributor and representative to a network of manufacturers across the world, specializing in the areas of wooden ware, plastic injection molding, metal stamping and product packaging. QI’s core distribution businesses reside in cigar storage and packaging, home organization and warehouse packaging supplies.
“Quality Importers products are used by premium cigar smokers worldwide, and it is important to us to continue to actively support the premium cigar industry,” said QI President and Chief Operating Officer Alex Goldman said. “I have worked with the CAA on and off since 1998 and have always valued the professionalism and level of support the organization provides. I am proud that QI has joined CAA as a supporting member and look forward to deepening our ties with the association and its member companies.”
CAA is the leading national trade association representing manufacturers, distributors, importers, suppliers and all channels of retailers in the cigar industry and traces its roots back to the 1890s.
