Cuban Cigar Market Struggles as Imports to Europe Increase by 30%

Cuban Cigar Market Struggles as Imports to Europe Increase by 30%
Date: May 2023
Author: Usman Dawood

According to data from the European Cigar Manufacturers Association (ECMA), imports of cigars and cigarillos to European Union (EU) countries increased by almost 30 percent last year. This rise was seen from every major source of cigars and cigarillos except for Cuba. The data is measured in tons, making it difficult to compare with the import numbers published by the Cigar Association of America in the US.

The ECMA report states that the value of total cigar and cigarillo imports into the EU increased from €180.57 million to €257.25 million. However, it did not provide information on the values by country. It is no surprise that Cuba’s exports have decreased, with a 10.28 percent drop in 2022, which is the lowest figure of the past five years. This decrease followed a massive price increase for Cuban cigar products announced by Habanos S.A., the global distribution company for Cuban cigars. The price hike led to some cigars tripling in price. There were also shortages of Cuban cigars, and it could take a few years for supplies to return to normal levels.

The increased prices and supply issues with Cuban cigars have led many non-Cuban companies to focus on international sales to take advantage of the gaps created by Cuba’s supply issues and higher prices. However, despite the overall increase in cigar and cigarillo imports to the EU, the ECMA has confirmed a long-term decrease in consumption of these products.

With the decrease in demand for Cuban cigars, it is possible that Cuba may begin to rely more on the Chinese market. This could create a cycle whereas demand decreases, so does supply, which pushes more of the supply towards China. This shift could affect the global market for cigars and cigarillos, as China’s cigar market has been growing rapidly in recent years. Therefore, it will be interesting to see how this trend develops in the future.

The potential increase in Cuba’s reliance on the Chinese market may have significant implications for the cigar industry. China’s cigar market is becoming increasingly important as it continues to grow. In recent years, China has become the world’s largest consumer of premium cigars, with an estimated market size of $322 million in 2020, according to a report by Cigars & Spirits Magazine. Furthermore, China’s cigar market is expected to continue growing, reaching a market size of $541 million by 2025, according to ResearchAndMarkets.com.

Cuba’s increased focus on the Chinese market could lead to a decrease in supply to other regions, which may cause prices to rise further. This trend could also affect the reputation of Cuban cigars as a luxury product, as it may become more widely available in China.

In conclusion, the decrease in demand for Cuban cigars may lead to a shift in the global cigar market, with Cuba potentially relying more on the Chinese market. The growing Chinese market may provide an opportunity for Cuban cigar producers, but there are also challenges to expanding into this market. The future of the Cuban cigar industry remains uncertain, and it will be interesting to see how it adapts to changing market trends and demands.

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