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February,
2005

TRENDS AND TRENDSETTERS IN SPECIALTY TOBACCO RETAILING
Corona Rolls Out Cigar-Themed Chopper

Florida retailer Corona Cigar Company has teamed with Lake County Choppers to create the world's first cigar-themed chopper, a super-stretched motorcycle that will be on the road at bike shows across the country when it's not parked in front of its home at Corona's massive store in Orlando.

Measuring 10' 6" long and sporting a fat 280-rear tire and a slick paint job, the Corona Chopper features two unique compartments in the center of the gas tank: a velvet-lined wine rack with a vintage bottle of 40-year-old port; and a glass-top, cedar-lined humidor stocked with 25 Corona cigars.

A hand-painted three-dimensional cigar stretches from the seat's rear to the rear fender, with an ash that lights up and blows smoke when the bike brakes. A silver scissors cigar cutter is tucked under the handlebars.


Manahattan's Davidoff Columbus Circle Shop Celebrates One-Year Anniversary

February 3rd marked the one-year anniversary for Davidoff Columbus Circle, located in Manhattan's Time Warner Center, and the luxurious store celebrated in style. To toast the auspicious occasion, attendees sampled an exclusive limited-edition Davidoff White Label Dominican puro which was originally rolled to commemorate the store's opening. The crowd also enjoyed Canella Prosecco and Ron Zacapa Centenario Guatemalan Rum, poured by representatives of Eber Bros. Parmount, as well as cigars from other premium manufacturers.

The 110 square-foot boutique is independently owned and operated by Suzanne and Paul Del Rossi and their son Graham Howarth.


Wisconsin Retailer Wins Natural American Spirit Grand Prize

Santa Fe - Star Liquor of Madison, Wis. is the grand prize winner of Santa Fe Natural Tobacco Company's Natural American Spirit Retailer of the Year 2004 Display Contest.

In the contest, retailers executed Natural American Spirits cigarette promotions for the chance to win over $25,000 in cash prizes. The $5,000 grand prize-winning idea from Star Liquor was an Andy Warhol-inspired full window mosaic that the store claims has helped Natural American Spirits sell twice as much as their other brands combined.

Participating retailers reported increased sales and foot traffic due to their promotions. You can't help but stop to look at some of these displays," said Dan Miller, director of brand equity for Natural American Spirit. "Every year I am amazed at the creativity and originality of our retailers."

Lakeshore Mobil, of Shorewood, Wis. took first prize ($3,000); Creation Station of Lawrence, Kan. took second ($2,000); and two retailers tied for third ($1,000): Roc's Up in Smokes of Gunnison, Colo., and Trader's Outlet of Flagstaff, Ariz. 100 honorable mentions, worth $150, were awarded. All the entrants received a retro-style jacket emblazoned with a Santa Fe Natural Tobacco logo.


The Taxman Comes for New York's Online Cigarette Buyers

New York City's Department of Finance has lowered the boom on approximately 3,700 smokers who bought cigarettes online between July 22 and April 2004, sending out bluntly worded letters asking them to cough up a combined $1.3 million in lost tax revenue.

Internet cigarette vendors have become a popular option for both consumers and resellers as an avenue to avoid paying New York's steep $3- per-pack tax, but New York has been aggressively pursuing these online businesses, launching lawsuits against over 30 websites which, the city alleges, have been avoiding paying taxes. The names on the letters were gleaned from a separate lawsuit in Virginia against Cigs4cheap.com. a reduced-tax cigarette site that has since gone out of business.

In most cases, the city prefers to come after the company directly, but because this particular vendor was bankrupt, it opted for the more inefficient method of going after the individual buyers.

The letters sent by the city give the alleged violators 30 days to pay up or face interest and penalties of up to $200 per carton. Some of the people on the list are believed to owe at least $10,000, an obvious indication that the cigarettes purchased were not for personal use.


Bits & Pieces
  • A bill to increase the smoking age to 19 in New York's Suffolk County passed unanimously in the county legislature on January 3. The law has sparked a debate on whether the state should follow the county's lead and raise the smoking age state-wide. Suffolk Legislator Brian Foley (D-Patchogue), sponsor of the bill, maintains there is a "growing momentum" in the statehouse.
  • An Oregon grand jury has indicted Otamedia SA, the world's largest Internet retailer of cigarettes with racketeering, distributing cigarettes without a license, and selling tobacco products to minors. The Belize-registered corporation operates yessmokes.com, among other sites, and accounts for over 40 percent of Internet cigarette business in the U.S. according to the charges.
  • Indiana cigar retailer Duane Conover of Captain Bucko's Cigars has discovered a novel approach to drumming up business: he paid the sales tax himself on all merchandise purchased at his store through the end of January 2005. "I lose 6 percent off the top, but I'm making a lot of friends," says Conover, who claims the policy has been good for business. "If people buy a box of cigars for $150, it's a savings."

SMOKESHOP - February, 2005