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Sept/Oct
2002

TOBACCO INDUSTRY NEWS

Toraņos Completes Cigar Factory Expansion

Alexandria, VA - Toraņo Cigars has just completed a significant expansion to their factory in Esteli, Nicaragua, that will accommodate a 30% increase in production.

"Our successes over the last year have encouraged us to enlarge and upgrade our Nicaraguan factory," said vice president Charlie Toraņo.

The factory, named Latin Cigars de Nicaragua, is a partnership between the families of Carlos Toraņo and Fidel Olivas. The combined history and experience of these cigar families, which exceeds 80 years in the cigar business, is expanding into the next generation, with the involvement of Charlie Toraņo and the three sons of Fidel Olivas: Jose, Aldrin and Oscar. The factory produces Toraņo's Reserva Selecta, Carlos Toraņo Nicaragua Selection, and Exodus 1959 lines. The facility employs over 200 workers.

"We are now boosting production, to keep up with the demand-side pressures, and we expect to see full-capacity operation soon. We're confident the expanding market only means greater growth for our family-owned company."

Combined with the Toraņos' other cigar factories in Honduras and the Dominican Republic, they employ well over 800 workers.


ITE Show Sues Startup Expo

The International Tobacco Expo (ITE) and the International Cigar Expo Inc. filed suit in Clark County Nevada District Court in June, alleging that two former employees conspired with a North Carolina company to illegally take over the annual show, now in its seventh year. The ITE petitioned the court to enjoin Tobacco Outlet Business, LLC, Charlotte, N.C. and TOB Trade Show, LLC a Florida company, from conspiring against ITE. The suit alleges that TOB and the other defendants engaged in fraudulent deceptive trade practices to take the ITE show and, as part of that conspiracy, hired away ITE's show managers. ITE is seeking actual and punitive damages.

Cohiba Trademark Dispute Going to Trial

New York, NY - The case brought by Empresa Cubana del Tabaco (Cubatabaco) against General Cigar in November 1997 over the ownership of the trademark Cohiba in the United States will proceed to trial.

Both General Cigar and Cubatabaco had moved for summary judgment arguing that there were no disputed facts. Judge Robert Sweet of the Southern District of New York disagreed, and has asked counsel to appear before him to reach a schedule for further proceedings.

General Cigar had argued that Cubatabaco had acquiesced in its two registrations of the trademark Cohiba in the U.S. by failing to take any action for 20 years. Cubatabaco alleged that it had rights under various international trademarks despite the fact that it had never attempted to register Cohiba in the United States. Judge Sweet dismissed Cubatabaco's claims asserting ownership rights to the Cohiba trademark based upon two intellectual property treaties.

Judge Sweet also found that General Cigar's first registration of the Cohiba trademark had been abandoned in the 1980s and that the case should be resolved on the basis of its second registration. Judge Sweet held that General Cigar could not rely on the legal doctrine of estoppel as a defense against Cubatabaco's attack.

General Cigar began marketing its Cohiba brand cigar in the early 1980s and has marketed "Red Dot" Cohiba cigar since 1997.


Court Rejects General Cigar Claims Against Altadis

Altadis, S.A. and its U.S. subsidiaries, Altadis U.S.A., Inc. and Consolidated Cigar Holdings, Inc., won dismissal of anticompetition claims brought against them by General Cigar Corporation in federal court in Miami.

The decision dismissed the claim that the Court had personal jurisdiction over Altadis, S.A. and rejected General Cigar's contentions that the Altadis companies had violated federal antitrust and trademark laws in the United States. General Cigar had alleged that Altadis U.S.A. was tying the future sale of Cuban cigars by retailers and wholesalers, once the Cuban embargo is lifted, to the purchase of non-Cuban cigars currently.

Judge Moreno ruled that General failed to make a case either for illegal monopolization or tying in violation of the antitrust laws. Also rejected were claims that Altadis U.S.A. employees had made false statements about General Cigar's products in violation of federal trademark laws. General Cigar's claims for actual, treble, and punitive damages were also dismissed.

General Cigar subsequently filed a formal notice of appeal from the district court's decision to federal appellate court. Nick Simeonidis, general counsel for General Cigar, said, "We are confident that the district court's decision will ultimately be reversed, as there is overwhelming evidence that Altadis engaged in this improper activity. It is also necessary for us to take this appeal to prevent the decision from being used as an excuse to renew unfair and anti-competitive conduct."


Four Tobacco Men Die in Dominican Plane Crash

A small chartered Caribair single-engine plane carrying three tobacco businessmen from Santiago, D.R. to Port-au-Prince, Haiti crashed in the Cordillera Central mountains of the Dominican Republic on April 17, killing all aboard including the pilot.

Traveling were Santiago tobacco businessman Alvaro Quesada, 54, president of La Tabacalera, the privatized Compania Anonima Tabacalera; Quesada's son, Alvaro Jr., 23; and Julio Fajardo, a member of management at cigar maker Manufactura de Tabacos S.A. (Matasa). The group was traveling to Haiti for a business meeting to study the opening of a free zone there as part of a joint program underway with the Dominican and Haitian governments and the private sector.

Quesada, one of the pioneers of the cigar industry in the Dominican Republic, immigrated from Cuba more than 30 years ago. His brother, Manuel, is the owner of Matasa.

According to local reports, the pilot decided to abort the flight due to lack of visibility and return to Santiago, apparently changing his route and attempting to find a passageway through the mountains.


Natural American Spirit Celebrates 20th Anniversary

Santa Fe, NM - Founded in 1982 to provide smokers with the highest and purest quality additive-free natural tobacco products, Santa Fe Natural Tobacco Co. is is celebrating its 20th Anniversary of the Natural American Spirit brand.

"Reaching this 20 year milestone would have been unattainable without strong customer support," said longtime employee Keith Grover. "Even today, consumer word-of-mouth recommendations continue to spread the word about America's Best Cigarette."

Founded in Santa Fe, N.M., the company has been a pioneer in developing a broad range of whole leaf natural tobacco products with full tobacco ingredient disclosure. The brand gained a strong following among smokers looking for an additive-free tobacco alternative to mass-market cigarettes.

As its customer base grew, the company expanded the Natural American Spirit natural tobacco product line. It now offers ten styles of cigarettes, three styles of RYO tobacco, and a unique ceremonial pipe blend, all produced at its own manufacturing facilities in Oxford, N.C.

This fall, the company will offer seven styles of Natural American Spirit cigarettes in commemorative 20th Anniversary pack tins.



SMOKESHOP - Aug/Sept 2002