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April 1998
Volume 25
Number 2

SHAKEUP, RATTLE, AND ROLL

Year end cigar import statistics for 1997 have been compiled and released by the Cigar Association of America, and once again the numbers leapt ahead from the previous year. In all, 609 million cigars were shipped to the U.S. last year, of which 519 million were premium.

But for the first time in memory, the industry acknowledged that not all of the cigars imported were sold. Depending on whom you speak with, estimates are that anywhere from 10% to 20% of last year's imports ended up stuck somewhere in the distribution pipeline, a situation that few are used to and which many newcomers have never even seen. Stores that suddenly received large cigar shipments based on backorders so old they hardly remembered them understand precisely. It's the same all over, but it's not the beginning of the end, as some would portray.

Yes, the long-anticipated shakeup is here. Yes, there will be casualties along the way, but for every crummy cigar you've lit up in recent years, you can be confident that quality will continue to rise all around. It's reckoning day for brands that would have never had a chance on a level playing field. Many retailers feel little sorrow, and most observers agree the cigar industry will be stronger for it when all is said and done. Imagine if every new cigar smoker over the past two years would have had the benefit of a really good cigar at a fair price.

But even as the ranks of premium cigar smokers hit a recent high last year, nerves throughout the industry continue to be rattled by actions in Washington. Two trends spell continued concern; Congress' growing rift with the cigarette industry over the proposed tobacco settlement, and the increasing glare on cigars. With so many settlement proposals on the table, it is as yet impossible to gauge the effects such bargaining by the cigarette giants will have on the corner tobacco shop and the cigar industry itself. Meanwhile, cigars are no longer left on the sideline in such debates. The FTC's request for marketing data from top cigar manufacturers marked the start of a new era of scrutiny over cigar marketing practices. Already, greater self-policing is being seen in the industry itself. In March, The Cigar Association of America admonished its members for seeking paid placement of their cigars in movies and on television. This comes on top of the CAA's retail- and consumer-level education campaign aimed to position cigars as strictly an adult pleasure (look for more details in the June issue of Smokeshop).

Finally, when the nation's top retailers and suppliers gathered for the Tobacconist's Association of America annual meeting and convention in March, discussions focused largely on keeping business strong at the retail level. Stores have been on quite a roll in recent years, and many are frustrated at the flat sales experienced in the first two months of 1998, combined with the psychological toll of the anti-tobacco mentality portraying anyone involved with tobacco as society's enemy. Every shop can benefit from the ideas on how they intend to "stay on a roll," in our TAA meeting coverage. And don't forget to keep the staff here at Smokeshop informed on your current experiences and needs as a retailer:write, fax, or e-mail us - we want to know how you are navigating the changing waters, and what you'd like to see from the industry.

E. Edward Hoyt III