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Aug./Sept.
2000

RETAILER & TOBACCO INDUSTRY NEWS

Peter Stokkebye Rolls Out North American Headquarters

CHARLOTTE, NC - Danish tobacco maker Peter Stokkebye has opened its first North American sales, marketing, and distribution headquarters, Peter Stokkebye International, Ltd., in Charlotte, N.C. The management team of the North American headquarters is headed by Erik Stokkebye, a fourth generation member with 22 years of experience in the tobacco industry.

Jan Bulstra, formerly an executive of Douwe Egbert Van Nelle, Inc. with 25 years of tobacco experience, is the new company’s chief operating officer. Senior vice president of sales, Frank Pierce, is also a former executive of Douwe Egbert, with 33 years of tobacco experience. Morgan Snead, a nine-year tobacco industry veteran formerly of Havatampa, Inc., has been named marketing manager.

“We have a great team of experienced tobacco experts who will be solely responsible for distribution of the company’s products,” Stokkebye said. “The launch of our North American headquarters promises to result in even better service and closer communication between the company and our valued customers.”

Peter Stokkebye International, Ltd. 6605 W.T. Harris Boulevard, Suite Q, Charlotte, NC 28269, Tel: (704) 597-0416.


Balmoral Cigar Now Agio Cigars USA
Assumes Distribution of Parent Co.’s Dutch Cigars


TAMPA, FL - In a move designed to conform to the global aspects of its business, Agio Cigar Co. has changed the name of its U.S. distribution company from Balmoral Cigar Company to Agio Cigars USA.

“Originally, we wanted our company name to reflect the brand name, Balmoral Royal Selection, our hand-made premium cigar, from our factory in the Dominican Republic, because, at that time, that’s the only product we sold,” said David Salem, president of the newly named company. “We added our Balmoral Sumatra Selection in mid 1999.”

The marketing and distribution of Agio and Panter cigars, made in Holland by parent company Agio Cigar Company, were taken over from James B. Russell as of July 1, 2000 by Agio Cigars USA. Russell had been the distributor in the U.S. of Agio’s Dutch brands for 23 years. “We have always enjoyed a fine relationship with James B. Russell, but the time came for us to pay attention to our brands ourselves,” explained Salem. “We appreciate the efforts that have been expended on our products over the years.”

Balmoral Cigar Company’s parent, Agio Cigar Company, The Netherlands, founded in 1904, is a major family-owned cigar manufacturer, producing over 700 million cigars per year. The company maintains cigar manufacturing and processing plants in The Netherlands, Belgium, Sri Lanka, and The Dominican Republic.

“The world is getting smaller every day,” Salem said, “and we feel it’s important to reflect the globalization of our corporate entity by making and marketing our products worldwide under the Agio identity.”


Cigar Manufacturers Agree to FTC Health Warning Labels

WASHINGTON, DC - Most cigars sold in the U.S. will soon carry warning labels similar to those on cigarettes, closing what the Surgeon General called a “dangerous loophole” in tobacco regulation.

The Federal Trade Commission (FTC) has reached an agreement with the seven largest domestic cigar companies to place a series of warning labels on all advertising, packaging, and in-store displays.

Together, the seven companies are responsible for 95 percent of the U.S. cigar market. The FTC is in talks with smaller manufacturers who make up the remaining 5 percent of the market, FTC Chairman Robert Pitofsky said.

The tough new health warnings were prompted by concerns about a surge in cigar smoking among Americans, especially young people, who may mistakenly believe that cigars are not as harmful as cigarettes.

“The message is that cigar smoking is not a harmless alternative to cigarette smoking,” said FTC chairman Robert Pitofsky. “It carries its own risks.”

Most cigar boxes already include a label required under a settlement of a California court case, which says the product “contains/produces chemicals known to the state of California to cause cancer and birth defects and other reproductive harm.”

The new warnings - five black-and-white labels which will alternate on a random basis - list more health risks and will be somewhat larger and more prominently displayed than warnings on cigarette packages. Included are warnings about second-hand smoke - a first for a tobacco product. The requirement goes in effect January, 2001.

“In contrast to the now outdated warnings displayed on cigarettes and spit tobacco labels, the new cigar warnings represent a significant advance in the conspicuousness and scientific currency of tobacco warning messages,” said Satcher.

The cigar companies agreed to the new labeling requirements to settle FTC allegations that their failure to disclose the health risks of cigars was deceptive and unfair.

Cigar makers say they oppose the warnings but said a federal standard would be easier to deal with than adhering to different state rules.

“While we don’t agree with the content or the language of any of the labels, it’s a better way for us to do business,” Joe Augustus, senior vice president of Florida cigar company Swisher International Inc., told the Associated Press. The Cigar Association of America Inc. said in a statement that federally mandated warning labels were preferable to conflicting state regulations.

Massachusetts issued regulations of its own in January 1999. Massachusetts Attorney General Tom Reilly said in a statement that the federal regulations were not tough enough, noting that Massachusetts regulations require warning labels to take up at least 25 percent of the front of the cigar package, while FTC requirements vary between 8 to 16 percent of the package. The Massachusetts regulations were challenged by the cigar industry last year and are currently awaiting a decision from an appeals court. Reilly said the opportunity to reform the cigar industry “should not be squandered,” and urged the commission to replace the regulations with stricter standards.

The new FTC regulations - passed on June 26, will take effect after a 30-day period for public comment, with the cigar manufacturers given an additional 180 days to put the labels on their products.

Companies that agreed to the settlement are Swisher International Inc., Consolidated Cigar Holdings Inc. and Havatampa Inc. (Altadis USA), General Cigar Holdings Inc., John Middleton Inc., Lane Ltd, and Swedish Match AB , which owns 64 percent of General Cigar.


Hinds Brothers Adds New OTP Products to Distribution Offerings

WINNIPEG, ONTARIO - Retailers north of the border now have additional specialty tobacco options available to them thanks to Hinds Brothers Tobacco, Ltd.

The Winnipeg-based company, which produces Hinds Brothers Cigars, now distributes McClelland tobaccos (bulk and tinned); Peter Stokkebye tobaccos; Comoy, Gbd, and BBB pipes from England; Nording pipes form Denmark; Baccarat and National Brand cigars from Honduras; Tabacalera and Tabaqueria cigars from the Philippines; in addition to a variety of smoking accessories. Hinds Brothers is also the distributor of Joya de Nicaragua cigars and Credo humidification products. Hinds Brothers sales and marketing head, Steve Wall, said he believes that Canadian customers appreciate quality and that these brands will be readily accepted now and in the future.


Imperial Tobacco to Buy EFKA Group

LONDON - The British cigarette company Imperial Tobacco Group PLC plans to buy German cigarette paper maker Efke Werke Fritz Kiehn GmbH (EFKA) Group for an undisclosed amount of cash.

EFKA, based in Trossingen, Germany, has a nine percent share of the global market for cigarette papers, and its acquisition would strengthen Imperial’s already dominant share of that business.

Imperial already owns Rizla, which accounts for 70 percent of the cigarette papers sold worldwide. In addition, the Bristol-based company manufactures Lambert and Butler, Regal, and Superkings cigarette brands, claiming less than five percent of the world’s cigarette market. It sells cigars under the Classic and Panama brands, and produces the Drum and Golden Virginia brands of tobacco.

Company spokesman Paul Sadler commented, “We are determined to grow the business both organically and by acquisition.”

In addition to cigarette rolling papers, Efka produces rolling and make-your-own machines, cigarette tubes, RYO cigarette filters, and cigarette papers for commercial manufacturing.



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