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June,
2004

TOBACCO INDUSTRY NEWS (cont.)

Cigar Sales Jump at Swedish Match

Stockholm, Sweden- Swedish Match reported that sales for the first quarter were on par with year-ago levels, at approximately $397.6 million. In Swedish Krona, sales were up by 5 percent.

Sales of cigars increased by 7 percent, to $90.9 million and operating income grew by 30 percent, to $13.8 million. The company reported the strongest growth for mass market cigars in the U.S., driven by a growing market, improved market share, and a number of successful new product launches. Sales also increased in local currency terms for premium cigars through volume growth and certain price increases. In Europe, volume development differed between countries, but with a total volume in line with year-ago levels.


Altadis Sees Strong Cigar Performance

Paris - For the first quarter, Altadis S.A. reported its economic sales grew by 6.5% to about $968.6 million. Net income for the quarter dropped by 10.3% to $101.7 million compared to the first quarter of 2003, mostly due to increased goodwill amortization.

Overall cigar sales increased by 25.7% in constant currency. Operations in America, where approximately 60% of the company's cigar division sales stemmed from, were the major driver, with a combination of volume growth, gain in market share, and price increases. Total sales of Altadis USA increased by 12.1% to $120 million.

800 JR Cigar, the leading retailer and distributor of premium cigars in the U.S. acquired last October by Altadis S.A., contributed approximately $13.3 million to economic sales.

Cigar sales in Europe, which represented nearly 20% of Altadis' overall cigar sales, increased by 15.1%. Growth in France was 11.2%, strongly driven by a volume increase of 8.1%, while sales in Spain grew by 19.3%. Total Cuban cigar sales continued to recover, increasing by approximately 32%, reflecting accelerated orders from distribution and retail.


Quarterly Net Sales up 3.8% at UST

Greenwich, Conn. - UST Inc. announced that for the quarter ended March 31, 2004, net sales increased 3.8 percent to $433.3 million, net earnings increased 9.8 percent to $121.7 million and diluted earnings per share increased 10.6 percent to $.73 compared to the corresponding 2003 period.

The net sales comparison for the first quarter included higher selling prices and slightly lower net unit volume for moist smokeless tobacco, along with increased sales for the Wine segment and the company's international operations. Also impacting the comparison was the sale of 3 million cans of moist smokeless tobacco to the military overseas in the first quarter 2003 as troops began moving to the Middle East.

A loss from discontinued operations of $0.9 million resulted in net earnings of $121.7 million, an increase of 9.8 percent from the corresponding 2003 period. Discontinued operations consist of the company's cigar business - Tampa-based U.S. Cigar Sales - which will be transferred to Swedish Match North America Inc. during the second quarter, as a result of the previously announced settlement agreement.


Cigar Retailer Bill Rancic: Wins "The Apprentice"

New York - In the two-hour season finale of NBC's "The Apprentice," New York City real-estate mogul Donald Trump selected Chicago native Bill Rancic, 32, founder of the Website Cigars Around the World, to be "The Apprentice."

Contestants in the hit series were competing for a $250,000-a-year job working for Donald Trump. Rancic opted to head up construction for The Trump Organization's new 90-story Trump International Hotel in Chicago rather than managing a Trump-owned golf course in California. Rancic also won a 2005 Chrysler Crossfire roadster.

Rancic founded cigarsaroundtheworld.com eight years ago in a 400 sq.-ft. studio apartment, and sold the national operation to Synergy Brands last year. The son of educators, he paid his way through college by starting a boat wash- and-wax business in the Chicago area. In addition to his cigar company, he also develops real estate and speaks at universities and businesses.

"The American Dream is still alive out there, and hard work will get you there," Rancic told reporters. "You don't necessarily need to have an Ivy League education or to have millions of dollars startup money. It can be done with an idea, hard work, and determination." Nat Sherman Dedicates New Smoking Lounge

Joel Sherman, president, Nat Sherman, Inc., oversaw the ribbon cutting ceremony at the new smoking lounge at the company's Fifth Avenue cigar shop in Manhattan in November. The lounge, which previously housed administrative offices, was completed earlier in the year. Thanks to New York City's ban on smoking, cigar shops and lounges are the only places where cigar enthusiasts can light up.


Nat Sherman Dedicates New Smoking Lounge

Joel Sherman, president, Nat Sherman, Inc., oversaw the ribbon cutting ceremony at the new smoking lounge at the company's Fifth Avenue cigar shop in Manhattan in November. The lounge, which previously housed administrative offices, was completed earlier in the year. Thanks to New York City's ban on smoking, cigar shops and lounges are the only places where cigar enthusiasts can light up.


SMOKESHOP - June, 2004