Date: May 2024
Author: Usman Dawood

Habanos S.A., the Cuban state-owned tobacco company, is rumoured to significantly reduce its cigar shipments to importers in which it does not hold a complete ownership. This strategy is expected to impact several key markets, including Switzerland, Asia, and the Middle East, with a potential reduction of supply by as much as 50%.

Habanos S.A. has been historically meticulous about maintaining control over its distribution networks, and these rumored cuts appear to align with efforts to consolidate distribution channels and enhance supply chain efficiencies. Sources suggest that the company is aiming to prioritize markets where it can exert full control, thereby ensuring that their brand standards and market positioning are strictly adhered to.

In Switzerland, where Habanos owns 50% of Intertabak AG, the company has already made moves that hint at these broader strategic changes. Earlier reports, such as those discussed by Tobias Hüberli, reveal that despite the opening of new franchises like La Casa del Habano, the overall availability of Cuban cigars might be compromised. The expansions, driven by figures such as Tony Hoevenaars, CEO of Intertabak AG, have aimed to enhance the supply of Cuban cigars, with new franchises benefiting from a preferential allocation of stock.

However, this approach is proving challenging under the new constraints imposed by Habanos S.A.’s headquarters in Cuba. In early April, Intertabak AG informed their customers about the worsening supply situation, although specific details about the extent of the cuts for 2024 were not disclosed. This has led to concerns over how Swiss cigar aficionados and retailers will navigate the expected shortages.

The implications of such significant reductions in supply could be substantial across affected regions. In Asia and the Middle East, markets known for their robust demand for luxury goods, including premium cigars, such reductions could disrupt the local cigar industry dynamics and possibly inflate prices due to scarcity.

This move by Habanos S.A. could also be interpreted as a strategic pivot towards enhancing its control over international markets, reflecting a broader trend among companies to tighten supply chains and distribution controls in response to global economic pressures and changing market dynamics.

As these are still rumors, the full impact and the veracity of the planned supply cuts remain to be seen. Stakeholders in the cigar industry, from distributors to retailers and consumers, are keeping a close eye on developments, hoping for official confirmation or clarification from Habanos S.A. in the coming months.

Via Cigar.ch

 

1 thought on “Habanos S.A. Rumored to Slash Cigar Supplies: Switzerland, Asia, and Middle East Brace for Impact

  1. Any word on how this would impact UK market through H&F

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