Category: Cigars

  • Habanos Reports Record Turnover

    Habanos Reports Record Turnover

    Photo: Habanos

    Habanos reported a turnover of $568 million in 2021, up 15 percent growth over the previous year.

    “The 2021 results confirm the solid path we are on, despite the crisis caused by Covid-19. Last year we surpassed the $500 million mark for premium cigar sales worldwide, an all-time record for the category and a testament to the enormous potential of our business,” Habanos wrote in a statement attributed to its co-presidents, Inocente Núñez Blanco and Luis Sánchez-Harguindey Pardo de Vera.

    “We are very proud to lead the premium cigar category and to continue to grow despite the situations experienced over the past two years,”

    In terms of volume, Habanos, top markets were Spain, China, Germany, France and Switzerland. Europe remains Habanos’ main regional market, with 59 percent of global sales volume, followed by Asia Pacific (16 percent), America (14 percent) and Africa and the Middle East (11 percent).

    “At Habanos, we maintain our commitment to offer the best experience to our aficionados, exclusive products and novelties, all in keeping with the quality, tradition and unique origin that make our Habanos  a luxury product appreciated all over the world,” Commercial Vice President Leopoldo Cintra González and Vice-President of Development José María López Inchaurbe wrote in a press note.

    “Our aficionados have remained loyal to Habanos and their tastes and, in many cases over the past year, they have incorporated into their domestic consumption vitolas and brands that used to be part of a more social consumption.”

    According to Habanos, the Covid-19 pandemic has changed consumer habits. However, working with its distributors, the company said it was able to keep alive smokers’ passion for Habanos with a combination of product launches, virtual events and—when possible—face-to-face events.

    While strong demand, in combination with the pandemic, has delayed the supply of some of Habanos’ bestselling vitolas, the company managed to export 38 new products in 2021. Habanos says it the supply situation has gradually improved after the first quarter of 2022.

    Following the pandemic-related cancelation of the Habanos Festival in 2021 and 2022, the company presented several new products, including : Cohiba Ambar Cohiba Ideales and Cohiba Edición Limitada 2021, at is virtual Habanos World Days.

    Habanos will commemorate the 55th anniversary of its prestigious Cohiba brand on Sept. 9 in Havana.

  • FDA Accepting Comments on Menthol and Flavored Cigars

    FDA Accepting Comments on Menthol and Flavored Cigars

    Photo: koszivu

    The U.S. Food and Drug Administration is now accepting comments to its proposed rules prohibiting menthol cigarettes and characterizing flavors in cigars.

    To comment on the proposed menthol product standard, click here.

    To comment on the proposed flavored cigar product standard, click here.

    The public may provide comments on these proposed rules through July 5.

  • U.S. Premium Cigar Imports Up

    U.S. Premium Cigar Imports Up

    Photo: Media Ingenious Corp

    The United States imported 21.4 million premium cigars in 2022, up 3.8 percent from the previous year, reports Halfwheel, citing the Cigar Association of America (CAA).

    Nicaragua supplied 14.73 million premium cigars while Honduras delivered 3.21 million, both showing increases from 2021.

    Imports from the Dominican Republic, on the other hand, decreased by more than 40 percent.

    The CAA calculates its report numbers based on import numbers from the U.S. Census Bureau, U.S. Customs Services and information reported by cigar companies. Numbers are not exact due to reporting differences, according to the association. The CAA estimates how many “large cigars” were actually “premium cigars.”

  • Mixed Reactions to Menthol and Cigar Flavors Plan

    Mixed Reactions to Menthol and Cigar Flavors Plan

    Photo: Alicia

    The U.S. Food and Drug Administration’s recently announced plan to ban menthol in cigarettes and characterizing flavors in cigars has evoked mixed reactions among stakeholders.

    The Campaign for Tobacco-Free Kids welcomed the move. “By issuing proposed rules today to prohibit menthol cigarettes and all flavored cigars, the FDA is taking historic and long-overdue action to protect our nation’s kids, advance health equity and save lives, especially among Black Americans and other populations that have been targeted by the tobacco industry and suffered enormous harm from the predatory marketing of these products,” the organization wrote in a statement.

    The Foundation for a Smoke-Free World (FSW), which is backed by Philip Morris International, said the FDA’s move could become one of the most significant actions in the fight to end the smoking epidemic in the U.S.

    “Menthol cigarettes are disproportionately used by African Americans and prohibiting their sale would help address the health disparities caused by these products,” the organization wrote in a statement

    “Tobacco product use is the leading cause of preventable death in the U.S. African Americans smoke menthol cigarettes at a rate that is far higher than menthol use prevalence in other racial and ethnic groups. The FDA cites modeling studies that indicate if menthol cigarettes were no longer available, smoking rates and deaths due to smoking would decline significantly in the U.S.”

    While describing the menthol ban as an important step, the FSFW stressed that adult smokers who are addicted to menthol cigarettes and who cannot or will not quit entirely require support. “Menthol-flavored harm reduction products (e-cigarettes, nicotine replacement therapy gum, heated tobacco, and snus) provide users with access to alternatives to switching to nonmenthol combustibles or turning to the black market for menthol products,” the group wrote.

    We strongly believe that there are more effective routes to deliver tobacco harm reduction than banning menthol in cigarettes.

    Kingsley Wheaton, chief marketing officer, BAT

    British American Tobacco said it was reviewing the details of the proposed regulations and would continue to actively participate in the rulemaking process by submitting science-based comments to the FDA.

    “We strongly believe that there are more effective routes to deliver tobacco harm reduction than banning menthol in cigarettes,” said BAT Chief Marketing Officer Kingsley Wheaton in a statement. “Evidence from other markets, including Canada and the EU where similar bans have been imposed, demonstrates little impact on overall cigarette consumption.

    “The scientific evidence shows no difference in the health risks associated with menthol cigarettes compared to non-menthol cigarettes, nor does it support that menthol cigarettes adversely affect initiation, dependence or cessation. As a result, we do not believe the published science supports regulating menthol cigarettes differently from non-menthol cigarettes.”

    22nd Century Group is confident its VLN Menthol King brand will be exempted from the FDA ban.
    (Photo: 22nd Century Group)

    22nd Century Group, meanwhile, expressed support for the FDA’s proposed menthol ban, saying it expected its VLN Menthol King reduced nicotine cigarettes to be exempted from the FDA ban. On Dec. 23, 2021, the FDA authorized 22nd Century Group’s VLN Menthol King brand to be marketed with modified-risk claims.

    In its press release announcing that decision, the FDA acknowledged its menthol plans, stating, “In reaching today’s determination [authorizing the MRTP applications for VLN], the FDA considered both the current legal status of menthol cigarettes and the available science demonstrating that these particular products are ‘appropriate for the protection of public health’ and could help addicted cigarette smokers reduce their nicotine consumption and the number of cigarettes they smoke per day,” according to 22nd Century Group.

    “Removing menthol from highly addictive cigarettes is a crucial public health step by the FDA, and we welcome today’s announcement,” said John Pritchard, vice president of regulatory science for 22nd Century, in a statement.

    “At the same time, we recognize, as the FDA has, that many adults who continue to smoke highly addictive cigarettes after the implementation of a final FDA rule will need access to suitably regulated alternative products. Our VLN products, including our recently authorized MRTP VLN Menthol King is an example of such a product, and we have already and will continue to represent our views to FDA on the importance of MRTP products in achieving FDA’s public health mission.”

    Stressing that the FDA’s April 28 announcement relates only to proposed product standards, Swisher, which is best known for its Swisher Sweets cigars, said it would continue business as usual. “The FDA announcement (…) is only a proposed rule and must go through a lengthy comment an approval process before it can be enacted,” the company wrote in a press note.

    Insisting there was little scientific evidence to support a ban on characterizing flavors in cigars, Swisher said it plans to vehemently oppose the measure with meaningful scientific and economic data.

  • U.S.: Record Premium Cigars Imports

    U.S.: Record Premium Cigars Imports

    Photo: laboko

    The United States imported a record-setting 456.3 million premium cigars in 2021, according to the Cigar Association of America (CAA).

    The CAA estimates that 364.4 million premium cigars were imported in 2020, showing a 25.2 percent increase in 2021.

    December, however, showed a 23.7 percent drop in imports, marking the only month that did not exceed 2020 figures. The fourth quarter as a whole represented a 6.8 percent decrease compared to 2020.

    According to Halfwheel, the CAA calculates its numbers based on the import numbers provided by the U.S. Census Bureau, U.S. Customs Services and information from cigar companies. The trade group’s numbers are not exact because of reporting differences; it estimates how many “large cigars” were actually “premium cigars.” There are some machine-made cigars that meet the U.S. definition of a “large cigar,” though those cigars would not be considered premium cigars by most people.

  • SM Pauses Separation of Cigar Business

    SM Pauses Separation of Cigar Business

    Photo: Swedish Match

    Swedish Match has suspended the separation of its cigar business until further notice.

    On Sept. 14, 2021, Swedish Match announced its intention to spin off its cigar business to shareholders and subsequently list it on a U.S. national securities exchange. The separation was initially expected to be completed in the second half of 2022, at the earliest.

    The decision to suspend the separation was driven by regulatory uncertainties, according to Swedish Match.

    “While supply chain related challenges have contributed to the financial development of the U.S. cigar business falling short of Swedish Match’s expectations in recent quarters, today’s decision to suspend the spin-off preparations was prompted by regulatory uncertainties facing the cigar business,” the company wrote in a statement.

    The U.S. Food and Drug Administration recently denied substantial equivalence (SE) designations for applications corresponding to about 3 percent of Swedish Match’s 2021 cigar volume. According to Swedish Match, it cannot be ruled out that additional SE applications for the cigar assortment will be denied in the first instance as FDA continues to work through remaining applications.

    Swedish Match said it plans to appeal the non-SE designations by the FDA by requesting a supervisory review. The company remains confident that it will be given the opportunity to provide the FDA with sufficient data in order to demonstrate that the cigars in question are substantially equivalent to their predicate products insofar that the changes that have taken place do not raise questions of public health.

    “Swedish Match is confident that the above-mentioned issues will be resolved or efficiently mitigated in due course,” the company wrote in its statement. “However, the board’s view is that the decision to suspend spin-off preparations until further notice is in the best interests of our shareholders. As the potential impacts from regulatory uncertainties have been clarified, the Swedish Match board expects to resume plans to separate the cigar business.”

  • New Report on Cigar Health Effects

    New Report on Cigar Health Effects

    Photo: Marco Mayer

    The National Academies of Sciences, Engineering and Medicine (NASEM) has published an independent report on the health effects of premium cigars. Commissioned by the Food and Drug Administration and the National Institutes of Health, the report provides a comprehensive review of the scientific literature on these products.

    For example, the report includes information on short-term and long-term health effects, patterns of use, marketing and perceptions, and product characteristics of premium cigars.

    The early to mid-1990s saw a large surge in U.S. cigar consumption, including premium cigars. Based on recent import data, premium cigar use may be increasing, though premium cigars currently make up a small percent of the total U.S. cigar market.

    Premium cigars have also been the subject of legal and regulatory efforts for the past decade. In 1998, the National Cancer Institute undertook a comprehensive review of available knowledge about cigars—the only one to date. The resulting research recommendations have largely not been addressed, and many of the identified information gaps persist. Furthermore, there is no single, consistent definition of premium cigars, making research challenging.

    In response, the FDA and the National Institutes of Health commissioned the NASEM to convene a committee of experts to address this issue. The resulting report, Premium Cigars: Patterns of Use, Marketing and Health Effects, includes 13 findings, 24 conclusions and nine priority research recommendations and assesses the state of evidence on premium cigar characteristics, current patterns of use, marketing and perceptions of the product, and short-term and long-term health effects.

  • Strong Cigar Sales Boost STG’s Results

    Strong Cigar Sales Boost STG’s Results

    Photo: STG

    Scandinavian Tobacco Group (STG) reported net sales of DKK8.23 billion ($1.21 billion) in 2021, up 4.5 percent organically from the previous year. Earnings before interest, taxes, depreciation and amortization (EBITDA) before special items grew by 18.4 percent organically to DKK2.23 billion, with free cash flow before acquisitions stable at DKK1.39 billion.

    Net sales for the fourth quarter were DKK2.01 billion, reflecting 1.8 percent organic growth over the comparable quarter in 2020. EBITDA before special items was DKK474 million, up from DKK397 million in the previous year’s quarter.

    The fourth-quarter results were driven by continued strong demand for handmade cigars in the U.S., price increases across most product categories and continued cost efficiencies. The integration of Agio Cigars approaches completion, according to STG.

    “We deliver particularly strong financial results for 2021 based on a strong demand for handmade cigars in the U.S., Agio synergies and a favorable market mix,” said STG CEO Niels Frederiksen in a statement. “During the year, we showed good progress on our strategy ‘Rolling Toward 2025’ across the business and edged closer to our vision of becoming the undisputed global leader in cigars.”

    STG expects organic EBITDA growth in 2022 to be in the range of 0 percent to 6 percent.

    At the annual general meeting on March 31, 2022, the board of directors will propose an increase in the ordinary dividend of 15 percent to DKK7.50 per share. The board has also approved a new share buyback program with a value of up to DKK700 million to adjust the capital structure and meet obligations relating to the group’s share-based incentive program.

  • FDA Webinar on Pending Product Standards

    FDA Webinar on Pending Product Standards

    Photo: Postmodern Studio

    The U.S. Food and Drug Administration’s Center for Tobacco Products (CTP) will hold a live webinar, titled “FDA’s Rulemaking Process and Upcoming Tobacco Product Standards,” on Feb. 10 from 2 p.m. to 3 p.m. Eastern Time.

    The webinar will address the FDA’s planned tobacco product standards to prohibit menthol as a characterizing flavor in cigarettes and to prohibit characterizing nontobacco flavors in cigars; the FDA’s rulemaking process and how stakeholders can submit comments on proposed rules; and available cessation resources and tools.

    The webinar will feature a presentation from the FDA’s Office of Minority Health and Health Equity, the CTP’s Office of Health Communication and Education, and the CTP’s Office of Regulations. There will also be a question-and-answer session.

    The FDA will respond only to questions submitted by Feb. 4. To submit a question, please register for the webinar and complete the appropriate field on the registration form.

    The FDA stresses this webinar is not intended to communicate contents of the proposed rules or details about the timeline for their release.

    The webinar is live and free of charge, but prior registration is required by Feb. 9.

  • FDA Menthol Cigs and Flavored Cigars Plans on Track

    FDA Menthol Cigs and Flavored Cigars Plans on Track

    Photo: Yulia Usikava

    The U.S. Food and Drug Administration is on track to propose rules prohibiting menthol as a characterizing flavor in cigarettes and prohibiting all characterizing flavors (including menthol) in cigars by spring.

    The FDA’s actions “are an important opportunity to achieve significant, meaningful public health gains and advance health equity,” said FDA Center for Tobacco Products Director Mitch Zeller in a statement. “For far too long, specific populations have been targeted and disproportionately impacted by tobacco use, especially when it comes to characterizing flavors that entice them to start and keep smoking.”

    In April 2021, the FDA announced its commitment to advancing these two tobacco product standards. Then in November, attorneys for the FDA appeared in court as anti-tobacco groups accused the agency of failing to implement a ban on menthol cigarettes.

    The National Association of Convenience Stores (NACS) cautioned that banning menthol in cigarettes and all characterizing flavors in cigars would boost black market sales.

    “Menthol makes up more than 37 percent of the tobacco market,” Lyle Beckwith, NACS senior vice president of government relations, said in an article published on the association’s website. “That demand will not go away due to a ban. NACS is on record opposing menthol bans as we believe illicit vendors will quickly source and begin selling foreign and counterfeit menthol cigarettes. Illicit vendors do not verify age, do not collect and remit taxes, and they sell other illegal products beyond just menthol cigarettes.”

    In the convenience retailing channel, cigarettes contributed 27.79 percent of in-store sales in 2020, according to the NACS State of the Industry Report of 2020 Data. Other tobacco products, a category which includes cigars, accounted for 6.9 percent of in-store sales in 2020.

    After reviewing and considering comments to its proposed rules, the FDA could then proceed to issue final product standards, which would become enforceable once in effect.