TOBACCO INDUSTRY NEWS
Global tobacco manufacturer Altadis S.A. reported that year-end 2005 sales for its cigar division reached $1.1 billion, up $82 million (8.3%) from $971 million in 2004. The U.S. market and the Havana (Cuban) brands were the main drivers of the excellent performance of the year. Total economic sales of the cigar division broke down principally between the U.S. (approximately 53%), Havana cigars (14%), and Europe (19%).
In the U.S., Altadis U.S.A., a wholly-owned division of Altadis S.A., kept its focus on upmarket cigars, i.e. cigars with a natural wrapper, and particularly the brands Dutch Masters and Backwoods, on one hand, and premium, hand made cigars on the other. Total sales of Altadis U.S.A. increased in the U.S. by 9.1% in dollar terms and converted into sales of $561 million, up 8.8% on last year's $513 million.
Reynolds American Inc. posted fourth-quarter profits that were sharply higher than the same period last year, as the nation's second-largest cigarette company benefited from sales of premium brands Kool and Camel and improved operating efficiencies. The company earned $297 million compared with $76 million in the year-ago quarter. For the year, it earned $1.04 billion compared with $688 million in the prior year. Sales rose 28% to $8.26 billion from $6.44 billion a year ago.
The Last Great American Cigar Co., the former producer of the discontinued Perfeccion premium cigar brand, is now Pyro Cigar Company, and has launched its new flagship line of Dominican cigars named Pyro. The company can be reached at: 20229 NE 16th Place, North Miami Beach, Fla. 33179, Toll-free: (800) 514-0744, Fax: (305) 654-9078, Web: www.pyrocigars.com.
Robert Burton Associates, Ltd. has announced the launch of a new corporate website, rbaltd.com. The company's broad range of products are featured under the brand names E-Z Wider, Joker, Rizla, El Rey, Premier, and Club on this easy-to-navigate website. One click on a brand logo will bring visitors a page brimming with information on all the products offered by that brand and includes extensive feature descriptions and brand highlights. There all also links to each brand's individual website.
Phillips & King International enters its second century with the launch of a new website at www.pkcigar.com which offers retailers a wealth of product and support information at their fingertips. The site includes listings for every product available from the industry's largest distributor of tobacco products. "Retailers are now able to login with a unique ID and password and review their order history, place orders, request information, and review nearly 5,000 items available and in stock," states Eliot Suied, vice president of sales. Phillips & King is also able to offer retail customers added promotions and incentives specifically available to customers that place orders through the website.
Calico Brands to Distribute Scripto-Tokai Lighters
Follows Swedish Match Cricket Deal of 2005
ONTARIO, CALIF. - Two of the nations' leading suppliers of pocket and utility lighters have entered into an agreement transferring sales, marketing, and distribution functions of all Scripto branded products to Calico Brands, Inc.
The decision follows closely on a similar move in May 2005 by Stockholm-based Swedish Match, which elected to transfer sales and distribution of its Cricket lighters to Calico Brands. Cricket lighters are the third-largest selling brand worldwide.
"Calico has an excellent reputation for logistics, on time delivery, and service levels," explains Ross Knapp, Calico's senior vice president of sales. "Our sales force of two hundred plus persons is the largest in the industry. Utilizing our sales and distribution assets enables both Scripto and Swedish Match to better focus their resources on manufacturing and product development." Calico operates a 250,000 sq. ft. distribution facility in Ontario, California.
Calico says its customers will benefit from having access to three distinct product lines spanning from entry level, to mid-price, and premium price - all from one vendor.
Transition of sales and distribution functions are scheduled to be completed by the end of the first quarter of 2006.
Calico Brands is best known as a provider of translucent, economy-priced pocket disposable lighters and full-featured utility lighters where it holds the number two market share position in both categories. Although it markets products under its Calico and Hot Shot labels, it is perhaps better known for the store brands it produces for leading retailers such as Wal-mart, Walgreens, and Rite Aid. The company commands an estimated 90% market share of all private label lighter business in the U.S.
Scripto Tokai, Inc. is the wholly owned North American subsidiary of Japan-based Tokai Corporation, the world's second largest manufacturer of disposable pocket lighters and utility lighters. Scripto manufactures its products at its two highly automated facilities in Tijuana, B.C., and Cuernavaca, Mexico.
Gallaher Completes Acquisition of CITA
LONDON - Following the approval of regulatory clearances from European competition authorities, Gallaher Group Plc completed its acquisition of CITA Tabacos de Canarias SL and its group companies, effective January 2, 2006. As part of the transaction, Gallaher acquired Tabacos Canary Islands SA (Tacisa) and Tabacos La Nubia SL. The transaction was valued at $100 million in cash and the assumption of CITA's debt, estimated at $20 million.
CITA's principal activities are comprised of the manufacture, distribution, and sale of cigarettes and cigars in the Canary Islands, Spanish Peninsula, and Portugal.
Previously, Altadis S.A. and Agrupacion Tabaquera Insular Canaria S.A. (a Spanish company owned by the Zamorano family) each held 50% stakes in CITA. Tacisa - a cigarette manufacturing operation based in the Canary Islands, principally conducting contract manufacture for third parties - was owned evenly by CITA and Altadis S.A. La Nubia, a small cigar manufacturer, was owned entirely by the Zamorano family.
CITA's range of cigarette brands include Coronas, American Jean's, and Krüger, while the group's cigar portfolio includes core brands Victoria, Alvaro, Rex,, and Coronas Reserva.
In 2004, CITA sold approximately 5.4 billion cigarettes and 124.9 million cigars and La Nubia manufactured 6.7mn cigars.
Kretek International Taps Alfa Brands for Travel Retail and Duty-Free Segments
MOOREPARK, CALIF - Kretek International, Inc. has chosen Alfa Brands Corp., LLC of Clemmons, N.C., to represent the company's specialty tobacco products in the travel retail and duty-free markets of North America.
Kretek International, with several brands that it has created, launched, or developed in the marketplace, is the largest importer, distributor, and marketer of specialty tobacco products in the U.S. Their brands are well established in tobacconist, cigarette tobacco outlet, convenience store, and convenience/gas segments.
Kretek International operates a state-of-the-art shipping facility, including its own in-bond facility, and ships over 500 orders daily. The company has recently entered the Canadian market with the same enthusiasm and determination to duplicate their extensive U.S. distribution system in the very competitive and difficult Canadian market. So far, Kretek says that all indications there are very encouraging and promising.
"After many years of knowing each other, both of our companies have decided to join together and work with the same purpose and persistence towards a mutual goal," said Franco Gabriele, president of Alfa Brands. "Kretek International's staff, infrastructure, and brands are nothing but first class and Alfa Brands is honored to be chosen as their exclusive agent."
With the specialty products category becoming the fastest growing market segment in the industry, Djarum - Kretek's biggest selling specialty product - has become the largest selling imported specialty cigarette in the U.S.
Chicago Pipe Show 2006 to be Dedicated to Tom Dunn
Organizers of the 2006 Chicagoland Pipe & Tobacciana Show, May 6-7 at the Pheasant Run Resort, are honored to announce that this year's show will officially be dedicated to the memory of the late Tom Dunn, publisher of The Pipe Smokers Ephemeris, with the assistance of pipe book author Ben Rapaport and the blessing of the Dunn family.
There will be an exhibit table with photos, personal items, and information about Tom as well as a dedication book for the visitors to sign and write short notes if they choose. The book will be presented to the Dunn Family. At the Friday evening welcome dinner on May 5, a good friend of Tom's will give a short talk about his life. See Calendar, Page 28, for full information on the Chicagoland Pipe & Tobacciana Show.
SMOKESHOP - February, 2006