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February,
2009

TOBACCO INDUSTRY NEWS
Production, Distribution, Regulation, Trade...

Nobel Cigars Acquires Factories of Latin Cigars Nicaragua and Latin Cigars Honduras from Toraño, Olivas Families

Nashville, TN - Nobel Cigars, a subsidiary of the Scandinavian Tobacco Group, has acquired the cigar factories of the Toraño and Olivas families, known as Latin Cigars Nicaragua and Latin Cigars Honduras, for an undisclosed amount.

The factories jointly employ around 950 people, and annually produce around 17 million hand rolled, premium long filler cigars, which are sold under the CAO brand name (through CAO International, which was purchased by ST Group’s Henri Wintermans division in 2007), Carlos Toraño cigars, and other well known brand names including Dunhill.

Daily management of the factories will continue to be handled by the members of the two families who founded the companies: Charlie Toraño and Fidel Olivas and his sons José and Aldrin, ensuring continuity of quality.

“Toraño and the ST Group share not only a common passion for tobacco, but also maintain a similar philosophy towards consistent quality and continuous evolution,” said Toraño Cigar president Charlie Toraño. “My family will remain actively involved in the day-to-day business operations of the manufacturing of Carlos Toraño brand cigars.” Carlos Toraño Cigars are not part of the purchase deal, and the Toraño family retains ownership of the Toraño brands.

“I am excited about the possibility of what we can achieve by combining our generations of tobacco expertise with the ST Group’s vast resources,” said Toraño.

ST Group president Anders Friis added, “the acquisition reflects The ST Group’s commitment to perpetual growth and deep-rooted dedication to the cigar industry.”


National Tobacco Closes Louisville Factory, Distribution

Louisville, KY - National Tobacco Company (NTC), a subsidiary of North Atlantic Trading Company Inc., has ceased all tobacco product manufacturing and distribution operations at its facility in Louisville.

The primary function of the Louisville facility was the production of NTC’s loose leaf tobacco brands, including Beech Nut. Manufacturing of the loose leaf products has been moved to Owensboro, Ky. under an agreement with Swedish Match North America.

NTC will continue to retain marketing, distribution, and trademark rights over its brands, and plans concerning NTC’s roll-your-own tobacco manufacturing facility will be announced in the future. The company said it will keep its administrative offices in Louisville. The manufacturing of loose leaf brands including Beech Nut, will be moved to Swedish Match North America Inc.'s Owensboro, Ky. facility.

“NTC has come to this decision because the Louisville facility, built in the early 1900’s, operates well below capacity, is energy inefficient, and consists of a series of unconnected, multi-story buildings with limited weight-bearing floors that cannot satisfactorily support modern manufacturing techniques,” explained Ron Tully, vice president of public affairs. “Declines in overall tobacco industry volumes, and increasing regulatory burdens on the industry also contributed to the decision to cease production and distribution at this facility.

“Unfortunately, the company cannot foresee any future developments, alternatives, or improvements that could change this decision,” Tully added.


Ernesto Padilla Opens Fabrica de Tabacos Padilla Factory and Lounge in Miami’s Little Havana

Miami, FL - Ernesto Padilla, founder of Padilla Cigars, has opened a new cigar factory and lounge, Fabrica de Tabacos Padilla, on Calle Ocho in Miami’s “Little Havana” neighborhood. The lounged opened in October 2008, and manufacturing was awaiting permits at press time. Once operational, the new factory means that blending, production, and quality control for many of Padilla’s lines including Padilla Miami, 1948, and Signature 1932, will be performed in house. The factory will be the new home to 10 Cuban rollers, aiming to produce 1,500 cigars each day, and the factory will also be creating special edition cigars and ultra premium blends.

“The new factory gives us something we have not had before, total control over production of our cigars,” said Padilla. “We will now be able to give our consumers the best possible cigar we can and we should be able to deliver those cigars in greater quantities than ever before. We will also be able to put together new blends and bring them to market much quicker than before.”

Fabrica de Tabacos Padilla, in addition to being a cigar factory, also serves as cigar lounge and retail store highlighting cigar families with ties to Cuba, such as Padrón and La Gloria Cubana.

“This is the culmination of a dream for my family and myself,” said Padilla. “My family’s history and tradition in the tobacco business will now be reborn right in the heart of the Cuban-American community.”

Padilla Miami (formerly known as the Padilla Miami 8 & 11), already features a new band sporting the logo of Padilla’s Miami factory.


General Tobacco’s MSA Lawsuit Tossed

Mayodan, NC - A federal judge has dismissed a lawsuit filed by General Tobacco, the sixth-largest tobacco company in the country, that challenged the Master Settlement Agreement between states and tobacco companies.

The company, which joined the MSA in 2004, had sought more than $1 billion from competitors, claiming they had conspired with states to set up the agreement in an effort to drastically limit future competitors from fair market competition.

The agreement was established in 1998 as a settlement to lawsuits filed against tobacco companies to pay for health care costs of tobacco-related illnesses.

Companies who entered the market later pay more in MSA fees.


Ernesto Perez-Carrillo to Leave El Credito Cigar

Miami, FL - General Cigar announced that effective March 15, 2009, Ernesto Perez-Carrillo will leave Swedish Match International to start a new cigar business with his children.

“Stepping down from my position as president and cigar master of El Credito was not an easy decision to make,” said Perez-Carrillo. “I have benefited greatly from having had the opportunity to work with the largest premium sales force in the country, and have enjoyed dedicated marketing support that has ultimately generated international demand, as well as unwavering retail and consumer support for my brands.”

Carrillo’s father, Ernesto Sr., bought El Credito, a company established in Cuba in the early 1900s, in 1948. He later acquired the La Gloria Cubana brand from a different factory and registered it after he arrived in the United States. As a senator in the Cuban assembly representing Pinar del Rio, Ernesto Sr. fled Castro’s Cuban revolution with his family, including 7-year-old Ernesto Jr., in 1959. Ernesto Jr., a drummer in New York City, moved back to Miami and took over the family business a short time before his father died in 1980. In 1999 Carrillo sold El Credito to Stockholm-based Swedish Match AB, which later purchased General Cigar Co.


Alec Bradley Debuts Improved Website

Dania, FL - Alec Bradley Cigars, makers of Tempus, Maxx, and Trilogy cigars, have relaunched their website at www.AlecBradley.com, to offer a more functional look and feel, easy navigation, and an attractive graphical interface.

Visitors can view full details of all the Alec Bradley cigar selections, get news releases, find an Alec Bradley cigar retailer using a Zip Code search function, find Alec Bradley cigar events on a calendar page, view videos, sign up for a newsletter, and purchase promotional gear. The company, which prides itself on its personal relationship with its customers, hopes the new site will serve the needs of both current and future Alec Bradley cigar smokers.



SMOKESHOP - February, 2009