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February,
2006

TRENDS AND TRENDSETTERS IN SPECIALTY TOBACCO RETAILING
FedEx Agrees to Deal with Attorneys General to Further Tighten Tobacco Shipment Ban

MEMPHIS, TENN - FedEx Corp. has reached an agreement with attorneys general in several states to toughen its efforts to prevent interstate shipments of cigarettes and other tobacco products.

FedEx, including its cargo airline FedEx Express and FedEx Ground, already prohibits tobacco sellers from shipping products to customers in the U.S., but under the new deal FedEx agreed to take action against companies that repeatedly violate the policy. Violators could be barred from using FedEx services by having their accounts terminated, according to the agreement's parties.

FedEx joins DHL, a unit of German postal service Deutsche Post AG, and Atlanta-based UPS Inc. in the agreement not to ship tobacco to U.S. customers. The effort has been led by New York Attorney General Eliot Spitzer, who has mounted a campaign to stop Internet sales of tobacco products that he says has cut into local and state tax revenues and makes it easier for them to get in the hands of minors.

Currently, only the U.S. Postal Service will deliver tobacco products.


Fort Lauderdale Shop Owners Arrested for Selling Counterfeit Altadis Cigars

FT. LAUDERDALE -Following a tip-off by agents representing Altadis U.S.A., Montecristo, Romeo y Julieta, and H. Upmann, cigars purchased at two tobacco shops in Fort Lauderdale by undercover police were found to be counterfeits, leading to the arrest of the shop's owners and the seizure of all remaining infringing product.

The stores - the Carolina Cigar Company in Fort Lauderdale and the Fort Lauderdale Smoke Café, on Oakland Park Boulevard - raised suspicions at Altadis U.S.A. Agents representing the manufacturer contacted the Broward Sheriff's Office about the possible sale of counterfeit cigars at the two shops.

Detectives entered the stores with Altadis on three different occasions, each time purchasing several suspect cigar boxes valued at about $250 each. When the detectives paid in cash, the cigar sellers gave them a "break" and refrained from charging them sales tax, which is against state law.

When the cigars were examined at Altadis headquarters in Fort Lauderdale and determined to be counterfeit, detectives armed with warrants seized 40-45 boxes of cigars at both shops and arrested both 47 year-old Allen Boyd and 63-year-old James David Joiner. Detectives say they believe that the counterfeit cigars were illegally packaged at the rear of each business and at a separate location in Miami-Dade County.

The counterfeit cigars, valued between $20,000 and $25,000, will be destroyed.

Boyd and Joiner were freed on $500 bond while the investigation continued.


Philip Morris Cuts Off Illegal Internet, Mail Order Sellers

RICHMOND, VA. - Philip Morris USA has agreed to stop supplying cigarettes to illegal Internet and mail order dealers as part of an agreement with attorneys general for 37 states and territories, New York officials announced in January.

The nation's biggest tobacco company voluntarily agreed to end shipments of any of its products to customers, Indian tribes, and enterprises that the states deem illegal, New York Attorney General Eliot Spitzer said.

The action is the third prong of the states' efforts to curb the sale of cigarettes to minors over the Internet and by mail order, often to avoid substantial state sales taxes.


NEW & NOTABLE

  • Cigars Around the World (CAW), a wholly owned subsidiary of Synergy Brands' Gran Reserve Corp. division, officially dedicated its first retail outlet and cigar club in Miami Lakes Fla., with grand opening ceremonies on March 4, 2006.

    The 6,000 square-foot facility, located on 57th Ave., features more than 1,000 cigars ranging from leading premium brands to Gran Reserve Corp.'s own proprietary cigars and accessories, including the Breton brand. All the products in the store are also available at www.CigarsAroundTheWorld.com

    Envisioned as the "ultimate cigar destination" by Bill Rancic, founder and president of CigarsAroundTheWorld.com, the entire facility is temperature and humidity controlled and houses a cigar lounge with complimentary satellite TV and wireless Internet access. Climate-controlled lockers are available for rental to club members, and CAW expects to use the facility for radio remotes for special events, seminars on upcoming news in the cigar world, and other organized events for its members.

    Rancic, who was featured as Donald Trump's first "Apprentice" on the hit NBC-TV program, was on hand for the store's grand opening, which included cigar rolling demonstrations, representatives from major cigar companies, and a live remote broadcast by local sports radio station WQAM with promotional tie-ins and prizes.


  • Premium cigar maker Felipe Gregorio, Inc., opened its first retail store at 900 SW8th Street in the old Calle Ocho district of Little Havana in January. The elegant, 2,000 square-foot shop features a complete inventory of Felipe Gregorio products and an outdoor smoking area, with a wine bar planned for the near future. The upscale shop will also offer special buying opportunities, "factory-direct bargain on special selection so Felipe Gregorio cigars," notes company president Philip Wynne, "but the furnishings are anything but warehouse-style factory outlet."

  • Corona Cigar Company of Orlando, Fla., has opened a second retail location in the Colonial TownPark Center in Heathrow, Fla. The new 3,500 sq. foot location has all of the same features as the Corona's original world headquarters, including authentic, hand-made Nicaraguan furniture and Central American decor. A lighted, marble-topped cigar bar is the centerpiece of the Avo Lounge, where jazz pianist and cigar impresario Avo Uvezian will "stop by from time to time" to play piano in the smoking lounge, which features an extensive selection of ports and wines from Spain and South America.

  • SMOKESHOP - February, 2006