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Feb./March
2002

TOBACCO INDUSTRY NEWS (cont.)

ProCigar Updates Packaging Seal

Villa Gonzalez, Santiago - ProCigar, the Association of Dominican Cigar Manufacturers, has updated the quality seal that its association members feature on their finished cigar boxes. The embossed gold seal, which is used voluntarily by member producers on their Dominican-made products as a guarantee of consistency and quality, now features an image of a cigar along with the Dominican Republic flag. The seal previously displayed a tobacco leaf.

The association, which was formed in 1992, is comprised of seven leading cigar manufacturers in the Dominican Republic and collectively promotes their experience and reputation to consumers. The association also fights cigar counterfeiting in the Dominican Republic, says ProCigar's executive director Catherine Llibre.

The ProCigar members are General Cigar Dominicana, Tabaquisa, S.A., La Aurora, Manufactura de Tabacos S.A. (Matasa), Tabacalera de Garcia Ltd., Tabacos Dominicanos S.A., and U.S. Cigar Sales, Inc.


Colibri Group to Distribute DiMeola Cigars Under Licensing Agreement

Providence, RI - The Colibri Group, the country's leading manufacturer of butane lighters, has signed an agreement to license and distribute DiMeola premium handmade cigars to better tobacconists in the U.S.

Richard DiMeola, who developed DiMeola cigars, has a long history in the business, having served as president of Lane Limited and as executive vice president and c.o.o. of Consolidated Cigar. DiMeola cigars were introduced in April 2000, and have gained placement in over 240 top-line cigar stores, with reorder rates as high as 70 percent.

"We are prepared to invest the full resources of our company behind the brand," said Fred Levinger, president of Colibri. This deal marks Colibri's first introduction to the premium cigar market.

The Colibri Group, 100 Niantic Ave., Providence, RI 02907, Tel: (401) 213-2100, Fax: (401) 943-4220.


Toraņo Cigars Launches Dealer Incentives
Program is Part of Market Expansion Plan


Miami - Toraņo Cigars, a fourth-generation family-owned manufacturer of premium cigars, has launched the first phase of their 2002 market expansion program. It combines an ongoing program of dealer incentives, limited to their most active retail shops, with the addition of new, tobacco industry-experienced sales personnel in key markets.

"We are plugging gaps in our marketing and sales team with specialists in generating sales and solidifying our field position," said Charlie Toraņo, vice president of the company, which recently named Raul Rico as a new business sales specialist (see IndustryPeople, page 28).

To capitalize on their growth during 2001, Toraņo Cigars is creating a special marketing campaign, designed to reward retailers with the highest sales volume for Toraņo cigars. The comprehensive program will offer them benefits and inducements not available to all other retailers. "We're not inventing the wheel here," states Toraņo, "but offering programs that are time-proven to work. We'll provide these top-producing retailers with point-of-purchase sales aids in-store displays, shelf talkers, and similar items. We'll also run special sales incentive programs, such as 'buy-three-get-one-free' promotions. Shop owners can receive other 'thank yous,' such as high-quality Toraņo shirts, for reaching sales performance figures. It's our way of thanking our top-producers, as well as stimulating sales."

The company's Dominican-made Carlos Toraņo Signature Collection and its Honduran-made Exodus 1959 have proven themselves in both sales figures and critical acceptance, says Toraņo, noting that the two new cigars have had an overwhelming impact on the company's 2001 growth, "which has exceeded 10% over the previous year's figure."

"We know we can capture an even greater share of the market," says Toraņo, "which itself is growing at a healthy 8% post-boom rate."


Cuban Cigar Output Up by 25%, But Global Sales Fall by 30%

Havana - The Cuban government said it produced 153 million cigars for export in 2001, up 25 percent from the previous year, but according to President Fidel Castro sales of the nation's cigars were down 30 percent from 2000 due to a slowing world economy.

State-run Corporacion Habanos S.A., the exclusive marketer of Cuban cigars, said 2000 revenues were $150 million. Of that figure, $129 million came from exports and sales to tourists of 118 million cigars.

The government news agency, AIN, said in a year-end summary of the industry that 303 million units were produced, of which 153 million were cigars destined for export and the rest for national consumption. Cuba produces high-quality cigars for export and tourists, and lesser-quality cigars for domestic consumption.

While in recent years, foreign distributors of Cuban cigars have complained they could not get enough of the product, but that apparently was not the case in 2001.

"Spain, France, Britain, Germany, Canada, and Switzerland, and international tourism accounted for 70 percent of Havana cigar purchases over the last 12 months," AIN said.

Tobacco leaf production was just over 40,000 metric tons in 2001, similar to the 2000 crop, though production of wrapper leaf increased.

AIN said the 2002 tobacco crop would be similar to last year's, even if cigar output declined, as the country was building up a one-year stock of wrapper leaf. Cuba exports small amounts of tobacco leaf, reporting sales of around $17 million in 2000.

Cuba is also seeking to cash in on its cigar fame by entering the mini-cigar (less than 3 grams) market.

In early 2001, Cuba opened Internacional Cubana del Tabaco S.A., a joint venture with Altadis S.A., to produce 200 million mini-cigars annually.

AIN said mini-cigar sales increased notably through December, without giving details. Industry sources recently said exports would be around 60 million units in 2001, more or less according to plan for the company's first year of operation.


James B. Russell Pipe Show Set for April
Now Open to Consumers with Retail Sponsor


The second annual JBR show, to be held April 5 6 at the Marriot Saddle Brook, Saddle Brook, N.J., will for first time allow consumers to attend the merchandise buying event. In order to register, consumers must select a retail sponsor - any retail outlet where they currently purchase tobacco products. Consumers will be charged a $5 cover charge, which will be credited towards the purchase of $10 or more in merchandise. The fee includes a buffet style lunch and attendance to a pipe seminar featuring author Richard Carlton Hacker, Danish pipe maker Erik Nording, and Michael Adler, Cadogan.

Retailers may also attend a welcoming cocktail reception, and are treated to Father's Day dating and an automatic 10 percent discount on their entire invoice. Retailers will receive credit notification from JBR for all purchases made by consumers who registered them as their sponsor; retailers need not be in attendance at the show to receive the credit.

Last year, JBR displayed over 8,000 pipes and hundreds of cigars, cases, and tobaccos, utilizing all four grand ballrooms at the Marriot. The company will again offer a vast array of products at this year's show at discounted prices, including pipes from Comoy, Don Carlos, GBD, Nording, Sasieni, Promo, and Ascorti; Clubmaster, Comoys, La Paz, and Wings cigarillos; and pipe tobaccos including Balkan Sasieni, JBR's Royal Collection, Nording Hunter Blends, Rattray's, and Robert McConnell's. In addition, Nording will conduct pipe carving demonstrations, turning briar blocks into finished masterpieces.

Retailers and consumers may RSVP online at www.jamesbrussell.com, or contact James B. Russell at (800) 221-7738.



SMOKESHOP - February/March, 2002