Cigars, an Asian luxury | Canary Islands7

. Labeling and packaging process in a factory in Havana, and crops covered by the wrapper leaf, the one that wraps the cigar. Above, three tabletop pillars -coffee, glass and cigar-, a 'combo' that is increasingly rare to see. / photos: yes garcia

The world distribution of premium tobacco is in Chinese hands, which monopolizes the market even at origin and empties the cellars of tobacconists. Demand far exceeds supply and vitolas such as Cohiba or Trinidad have tripled prices

Sergio Garcia

Eduardo Navarro Basabe's cellar, in the 168 store in Barcelona, ​​is subject to the iron dictatorship of temperature and humidity. There they age the cigars, the final product of the Creole plant that other hands collected before in Pinar del Río or Viñales, the tobacco epicenter of the Caribbean. Sanctuaries of aromas like yours are not going through their best moment, the same in Spain as in the rest of Europe. Two years ago, in the midst of a pandemic, the distribution of premium vegueros -made by hand- changed hands and what was once a universe linked to luxury has become, pure and simple, an inaccessible redoubt for ordinary people. deadly. An example. Who liked before finishing off a good meal and a reserve with a Cohiba, has gone from paying 22 euros for a robust -124 millimeters of exceptional tobacco, with a ring gauge 50 and a weight of 12 grams- to paying 60. And that when found in the tobacconist, because these vegueros, it is the reality, are disappearing from the scene.

"The global distribution of Havana cigars has been a matter of the Chinese for some time and the price is set by Hong Kong," says Maribel González, president of the Association of Tobacco Entrepreneurs and Merchants (ECOT), which points directly to the sale by Imperial Brand of the premium division that was previously in the hands of the Spanish Altadis to a group of investors, "the only ones capable of overcoming the Cuban veto." The communist government of the island has few allies and even fewer who have money, summarizes the expert. China is the most important and also the only one that could pay what was required to acquire 50% of Habanos SA

The problem is that the Asian giant, where ever greater fortunes emerge, has a much greater demand than what its government allows it to enter -its is a protectionist market-, which has had an unexpected effect: thousands of Chinese -or people in the pay of the new capitalists - buying cigars or other premium sources all over the world. "The result is a much higher demand than supply," says Eduardo Navarro, increasingly accustomed to dealing with 'personal shoppers' who comb tobacconists throughout Europe, monopolizing the market while stocks last. This eagerness has been taken advantage of by companies such as the Dominican Vega Fina, which despite not working with cigars enjoys prestige and has already opened a factory in China, La Gran Muralla, to circumvent the limits imposed on foreign products.

production collapse

"The Havana vitolario has 27 brands and the rise in prices is not the same for all references," says Jerónimo Conejo Blázquez, from Badajoz, whose Cava Real has just been chosen the best in Spain by La Casa del Tabaco. «You can, for example, buy a Partagás Series D nº5 for 12 euros. The problem is that you place orders with the distributor and you never know what will arrive in the sack: a Hoyo de Monterrey here, Romeo y Julieta there... I just ordered ten boxes of Montecristo Open Eagle and they have only arrived two". «There is a lot of speculation -they warn from the Catalan store-. A 'lookout' from Trinidad, the top brand together with Cohiba, which used to cost 15 euros now does not come out for less than 50; and the box that I used to get for 500-600 euros now costs me 1,650. What has changed? Nothing except the price », he denounces. "Quite strange things happen, like receiving boxes with a stamp date of 2021 as if they were from now, when at that time they told me there was no gender."

A change in strategy that Navarro Basabe attributes to the entry of the new investment group. “There is a production of 90 million premium cigars and they want to make the money they have spent profitable as soon as possible. As they know that they have everything sold, they double and triple the price, and the rest of us can only accept it».

THE PHRASES

Tobacco Entrepreneurs and Merchants (ECOT)

«You make the order and you don't know what is going to arrive, Cohiba is missing and everything. Many stores in Europe are closing due to gender shortages»

Sale 168 of Barcelona

«I see it daily, 'personal shoppers' who buy the premium and special editions and then resell everything in China»

The entry of an emerging economy such as China is not, however, the only factor that contributes to shaping the current scenario. Cuban production is getting smaller, as shown by the fact that it has gone from 32,000 tons of tobacco leaves to 22,000 in just five years. From Tabacalera they argue that “this is not a factory, where all you have to do is press a button to make more nails. Las vegas de habanos give what they give and the irruption of new clients has altered the market».

Several factors have influenced this situation. The first is the extreme need suffered by a country where the rigors of the blockade are compounded by supply problems derived from the pandemic. “In Cuba, people are hungry, that is the reality, says Maribel González, and there are farmers who are using their land to grow food instead of tobacco.”

This scenario has several derivatives. In its plantations, 'ligero' is missing, a leaf of great strength, slow burning, which gives it a stronger flavor and without which it cannot be aged (aged). There's also not enough 'wrap', the leaf that wraps the cigar, "and without it you can't finish the product." The industry begins to suffer another type of shortage. "There are no boxes or rings -the vitolas-, no tubes or credentials to be able to market the product", enumerates Maribel González.

Quality controls

Spanish tobacconists also appreciate problems in drying and the lack of fermentation. “It is a problem derived from the demand. If I only have one oven in the kitchen and they ask me for fish all the time, I end up taking it out ahead of time. Well, it's the same here: they accelerate fermentation and as a consequence the tobacco arrives too raw. You have to end up aging in the cellars so that the cigar reaches its ideal point». Thus, things are beginning to appear shadows over quality controls, "which are much greater in places like the Dominican Republic or Nicaragua where, perhaps because they do not have such a good product, cooking is better," explains Navarro Basabe.

The current drift has shaken the foundations of the cigar. "There is not enough labor or tobacco, freight rates are rising and consequently the demand is much greater than they can meet," summarizes the president of ECOT. «The merchandise comes out with a dropper and at astronomical prices that few, apart from the Chinese, can afford. Consequently, long-standing brands that were synonymous with luxury have become a prohibitive item.

22,000

tons of tobacco leaf were collected in the Cuban fertile plains during the last harvest according to official sources, compared to the 32,000 tons that were registered just 5 years ago.

90

million cigars Cuba produces each year. In 2011 they accounted for 72% of the premium market, handmade cigars. Now Nicaragua gets 240 million and the Dominican Republic, 190.

66

euros costs a robust Cohiba in him estanco, triple that in 2019, a luxury item. The rise is even more pronounced in brands such as Trinidad, which has gone from 15 euros to 50.

The result has not been long in coming. The rising cost of the most prestigious Cuban vitolas and the decline in quality have caused a shift in the market. "For years the cigar is not what it used to be," says González. It does not have the strength or the aroma of before; it doesn't last as long either and that's because they put less tobacco in it so that it shoots better and the result is that it burns sooner».

Faced with this situation, the tobacconists have been diversifying their cellars for some time and giving entrance to origins that carried the role of second best, but which the current situation has put in the place they deserve. “Why wasn't more premium from the Dominican Republic, Nicaragua, and Honduras sold? Before, the usual expression was 'For 3 euros more, I'll buy a cigar'. But that's over. If the Cohiba costs 66 and the tobacconist offers me another for 15 or 17 that satisfies me, sooner or later people try other origins," says Conejo Blázquez.

This is what is happening and what explains why the premium world, far from sinking, is diversifying. «Just as in cigarettes we have all noticed a marked decrease -concludes Navarro Basabe-, in cigars, perhaps due to scarcity, my sales rose by 45%. But it is that in pure premium (several origins) that increase was 67%. And that is no accident."

'Mechanized' cigars in Solares, the only factory on the Peninsula

There was a time when Altadis, born from the merger of Tabacalera and the French Seita, had a long dozen factories in Spain. Today there is only one left, in Solares (180 direct jobs), focused on making mechanized cigars, and whose production is destined for Germany, Spain, France, Greece, Portugal or the United Kingdom.

They also manufacture cigarettes in Tenerife with local partners, 'partners', since for tax purposes the Canary Islands work as a third country and the price of the tariffs makes another formula unfeasible (the same thing happens to Philip Morris, for example). Extremadura is home to one of the largest tobacco centers in the EU. Its production is acquired by the public company CETARSA (of Sepi, although Altadis participates with 20%).

Cigarettes are the most heavily taxed product on the market, more so than hydrocarbons or alcohol (excise duties and VAT represent 80% of the price of a pack). The pressure, they maintain from Altadis, however, has more to do with the climate of growing prohibition, now that it is even proposed to eliminate consumption in open spaces such as terraces, or the draft bill that proposes limiting the sale of vapers to tobacconists.

Source link