Havana Hope

Cigar execs ponder the possible return of the Cuban
NEW ORLEANS -- Long the lore of cinema and humidor romantics, the Cuban cigar is as much about intrigue as it is about quality. The cigar, punished as part of a longstanding federal trade ban, could, however, be the latest boon to the growing U.S. cigar market. President Barack Obama recently opened a crack in the decades-old U.S. embargo against communist Cubafour decades after Fidel Castro assumed power.

With the diplomatic opening, cigar experts wondered aloud whether the long-forbidden product could enter American soil within the next two to three years and what effect [image-nocss] it could have on an already-surging industry.

"I believe a rising tide carries all ships higher.... I think it's going to be a great thing," Jim Colucci, executive vice president of Fort Lauderdale, Fla.-based Altadis USA, said during a panel discussion at the Tobacco Plus Expo 2009. The event is sponsored by the National Association of Tobacco Outlets (NATO) and Tobacco Outlet Business magazine.

Though supportive of expanding cigar choices, Colucci conceded lifting the ban could take years and also noted today's market is already bolstered by popular premium brands from the Dominican Republic. He also pointed to the necessity to negotiate agreements between the Cuban government and American and European companies that own distribution rights to Cuban cigar brands.

Despite these obstacles, Colucci was excited about how the import of Cuban products could spur new consumers. "The worst thing we can do is try to curtail how much [product] comes in.... You're going to have a lot of new consumers who have never smoked a cigar coming in."

For the convenience store industry, cigars and the broader other tobacco products (OTP) category are already enjoying strong support. According to the 2009 NACS State of the Industry (SOI) Report released last month, cigar sales surged 8.3% last year, keying a total in-store sales increase of 3.2%.

Peter Baenninger, president of Davidoff of Geneva, echoed Colucci's cautious enthusiasm. "This will lead to a huge boon in the cigar industry for everybody."

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