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Aug./Sept.
2000

RETAILER & TOBACCO INDUSTRY NEWS (cont.)

Tamboril Counterfeiters Nixed

DOMINICAN REPUBLIC - In June, police in the northern Dominican Republic seized thousands of counterfeit Cuban cigars worth some $50 million and arrested 20 suspects, court sources reported. The raid took place in the town of Tamboril, seven miles east of Santiago de Caballeros, where the clandestine cigar companies operated. The sources said both finished cigars and material for their production, such as labels with the Cuban brand names Cohiba, Montecristo, and Romeo y Julietta, were seized. Police also seized false seals, cigar rings, wooden cigar boxes reading “Made in Cuba,” and an undetermined number of weapons.

La Perla Habana Expands Sales Force, Centralizes Distribution

BURBANK, CA - A doubling in overall sales since RTDA ‘99 has prompted La Perla Habana Cigars to reorganize its sales and distribution efforts. In an effort to provide more expedient, personal service, La Perla Habana has hired six representative firms nationwide.

“We now distribute exclusively from our facility in Burbank, California,” says company president Doug Wood. The company has also added three new in-house sales specialists under sales director Bobby Ray. “Centralization enables La Perla Habana to control the total sales and distribution program,” continues Wood. “This assures a uniform sales and service policy. Tobacconists benefit from our streamlined responsiveness in meeting their needs. They no longer must deal through independent distributors. Instead, they come to us directly.”


Prometheus Battles Chinese Knockoffs

BELL, CA - Prometheus International, Inc., maker of fine smoking accessories, has recently moved to inform retailers of “slavish copies” of Prometheus lighters being imported from China. In particular, the Prometheus Intruder, Jupiter, and Invader lighter designs have been copied illegally. The company has sent letters to all Prometheus dealers declaring that anyone selling the knock-offs is in violation of federal laws and is infringing on rometheus’ trade dress rights.

Alfredo Perez, Tobacco Grower, Dies at 54

DRESDEN, TN - Alfredo Perez, co-owner of one of the largest brokers and growers of cigar leaf in the world - ASP Enterprises, died on April 20th from a heart attack. He was 54.

Alfredo learned the business from his father, Silvio Perez, who was also part owner of ASP Enterprises along Alfredo’s brother, David. ASP Enterprises was originally based in Nicaragua, however, when civil war struck the country and impacted business, Alfredo and his family turned their attention to growing tobacco in Honduras, Mexico, and Ecuador.

As Alfredo’s legacy, ASP Enterprises today stands as one of the foremost growers of Ecuador Sumatra leaf.


Altadis Closes Both Danlí, Honduras Cigar Factories
Santa Rosa Facility to Assume Production


DANLI, HONDURAS - In a move to consolidate excess manufacturing capacity, Altadis S.A. has closed down operations at both of its Danlí, Honduras cigar factories, and will transfer production of brands to a third facility in Santa Rosa de Copan.

The two Danlí factories - Tabacalera San Cristobal S.A., which Nestor Plasencia sold to Tabacalera de España in 1997, and Consolidated Cigar Co.’s 20-year-old facility Tabacos San Andrés S.A. de C.V. - ceased operations in June. The two facilities came under common Altadis S.A. ownership earlier this year as a result of the Seita-Tabacalera merger.

The combined manufacturing output of both factories - which in recent months had been operating at only minimal capacity - is being shifted to Altadis’ facility in Flor de Copan in western Honduras, Fabrica de Tabacos la Flor de Copan. Last year, Consolidated Cigar Co. completed an expansion of the facility that doubled its production capacity from 10 million cigars annually to 20 million. The factory, which Consolidated purchased in 1997, had been primarily producing a number of top private label brands including Zino, Felipe Gregorio, and Don Melo prior to the expansion. The first Consolidated Cigar brand produced at the factory, Flor de Copan, was launched last year.

The Danlí closings will see the loss of 850 jobs in what has traditionally been the leading cigar-producing city in Honduras. The once-bustling town has witnessed dozens of boom-era factories close, while output dropped at major facilities. An undisclosed number of affected workers from the Danlí factories will be re-locating to Santa Rosa to work in the new factory, and Oliva Tobacco Co. says it will be able to accommodate some workers at its tobacco sorting facilities.

Tabacalera San Cristobal S.A. had been producing the VegaFina and Quintero brands, while Tabacos San Andrés S.A. de C.V. produced Las Cabrillas and a number of private label brands.


Lane Ltd. Ceases Cigar Distribution
Acquires Brown & Williamsons’ Specialty Tobacco Unit, TEI


TUCKER, GA - Lane Limited, a unit of British American Tobacco, has abruptly pulled out of the premium cigar business, having ceased distribution in May of all but one of the premium, hand-rolled brands it had been handling.

Lane, which had been the exclusive distributor in the U.S. of Dunhill, Montecruz, Royal Jamaica, Onyx, Medal of Honor, Crown Achievement, Legion, Gold Seal, Corps Diplomatique, and Schimmelpenninck, said in May that it would no longer distribute its range of cigar brands. The company said it will retain distribution of Dunhill Dominican and the Schimmelpenninck line.

Altadis USA, which had been producing a number of Lane’s premium brands, will assume distribution of the Montecruz, Royal Jamaica, and Onyx brands. The vastly larger sales organization of Altadis could significantly raise these brands’ profile in the marketplace.

Royal Jamaica is one of the oldest and unique tasting hand-made cigars in the market, utilizing Jamaican filler tobaccos. Production of this brand returned to Jamaica in 1996 after a 1988 hurricane destroyed the Kingston, Jamaica plant and forced Consolidated Cigar to move production to the Dominican Republic.

Throughout the 1970's, Montecruz was the largest selling premium brand in the nation, originally manufactured in the Canary Islands before its production was moved to La Romana, Dominican Republic in 1977.

Onyx is an all-Maduro line that debuted in 1992, one of the very few survivors of the myriad cigars created during the cigar hysteria in the mid 1990s.

Meanwhile, Lane Ltd. has taken over the Specialty Tobacco Products division of Brown & Williamson. Both B&W and Lane are owned by London-based British American Tobacco. Last year, Lane’s parent company, British-based Rothmans was purchased by B.A.T.

Tobacco Exporters International (TEI), which had been operating in tandem with Lane Ltd. at the same Tucker, Ga. facility and was also previously owned by Rothmans and subsequently B.A.T., has now been incorporated into the Lane organization. TEI imported Cartier and Dunhill cigarettes, and distributed several additional imported brands.

Brown & Williamson’s Special Tobacco Products division produces a variety of non-cigarette products at its own plant in Winston-Salem, N.C., including Sir Walter Raleigh pipe tobacco, and Bugler and Kite roll-your-own tobaccos. Production will be transferred to Lane factories in Tucker, Ga. when the facility is closed later this year. Lane has also acquired the B&W brand State Express 555, an imported brand produced in England by B.A.T.



SMOKESHOP - August 2000