The Unbelievable Choices of Habanos

If you are a fan of Cuban cigars, and you don’t have accumulated a nice collection over the last decade, then you are in for a tough few years. Cuban cigars will be in low supply for at least the next 5 years, due to the problems that Cuba faces. And the already inflated prices will skyrocket even more, so if you can find a Cuban cigar, it will cost you a fortune.

Ever since the covid pandemic hit, demand for cigars is sky-high while the production is lower than ever in recent history. Shipping is an issue (link to the supply chain article from moc), production was an issue due to safe distancing and many workers falling ill. Tobacco was an issue (link to ‘the current state of Cuban cigars’ article from moc). But now that the pandemic is over, it doesn’t mean the problems are over. For the last year, the supply of Cuban cigars has been dwindling while the recent global price policy skyrocketed prices for Cuban cigars. And if you think that the current situation is rock bottom, that things will improve soon, you’re in for a rude awakening. A little birdy within Habanos told Cigar Inspector to expect another price rise of about 20% in 2023.

Sources within Tabacuba, the state-owned company that makes all Cuban cigars, have told Cigar Inspector that the expected number of hand rolled cigars coming from Cuba in 2023 will be as low as 35 to 40 million. Compare that to the close to 100 million cigars right before the pandemic. And even if those cigars are rolled, the next problem arises. Our sources tell us that Habanos, the global marketing and distribution company for Cuban cigars, has a warehouse full of cigars but no bands nor boxes. The same sources, independent from each other, also claim that Vrijdag Premium Printing, the Dutch printer that makes all (or most) of the Cuban rings and Tabacalera, the Spanish arm of Habanos who produces the boxes, refuse to ship bands and boxes due to outstanding payments that are long overdue. We reached out to Vrijdag Premium Printing, but as expected, due to confidentiality, Vrijdag Premium Printing would neither confirm or deny those rumours.

Say the outstanding balance is paid and new bands and boxes come in, will that solve the problem? No, as there simply isn’t enough tobacco. Several farmers that we spoke said that they won’t grow tobacco, at least not this year. There is a scarcity of food in Cuba, so farmers are growing beans and other crops now to survive. The fact that hurricane Ian destroyed so many curing barns doesn’t help either. You can grow tobacco, but if you can’t cure it, it’s a useless crop to grow. Not growing tobacco this year, means that the problem will drag for another few years.

And then there is labor. Many rollers just gave up. The pay is so low that it just doesn’t make sense. Who would slave for a merely 15 dollars a month when you can make more money with other jobs, or as one of our sources said “sleep with a tourist for 30 dollars and within an hour you make just as much as a cigar roller does in two months”. Skilled rollers are leaving their jobs, and it takes time to train new rollers if Tabacuba can find new people to train at all.

And what does Habanos do? Instead of focusing on the core business, maintaining the regular production lines and sizes, lines that people rely on, they are releasing new sizes. And they keep pushing the regional edition program, limited edition cigars for regional markets. Short term solutions for a quick buck, but by doing so they are ignoring their loyal customer base that doesn’t go for those fad cigars but want to smoke their Partagas D4, Cohiba Siglo VI, Bolivar Belicoso Finos, or Hoyo de Monterrey Epicure #2 for decades. This short term vision is alienating Habanos from the loyal customers base, favoring the amateur investors in cigars and the younger hunters for limited editions over the people that made Habanos the powerhouse in the cigar industry that they are today. And the people that Habanos is now catering to, isn’t as loyal as the regular smoker of Cuban cigars. Those newer smokers have a shorter attention span, when there isn’t any money to be made by investing in Cuban cigars they will go for the next thing and the hunter of limited editions can easily jump to non-Cuban Limited’s or regionals if there is enough hype. But once Habanos loses that older, loyal customer base then the end is in sight.

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