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August,
2005

TOBACCO INDUSTRY NEWS (cont.)

Heavenly Cigar Appoints First Outside Sales Representative Firms in Response to Growth

Naples, FL - Heavenly Cigar Company has announced the appointment of three sales representative firms, according to Heather L. Phillips, Heavenly's founder and c.e.o.

"Over the years, our sales staff, along with the Angels, have provided retailer support at the highest level in the industry," says Phillips. "The dramatic growth in our products, sales, and retailer activity has challenged our ability to maintain our support of retailer events, and to efficiently handle our daily sales activity.

"After evaluating our daily operations to determine how best to satisfy the needs of our valued customers, we have taken the logical step in multiplying our sales efforts by hiring the first Heavenly sales representative firms."

Phillips says the representatives were selected for their reputation in maintaining Heavenly's tradition in quality service. The three new appointments now provide coverage in 18 states, located in the Northeast, Midwest, and West Coast.

The new sales rep firms are:

  • The 50-year old family-owned firm of Poehler's LLC now serves Heavenly retailers in Texas, Louisiana, Oklahoma, Arkansas, Missouri, Kansas, Iowa, and Nebraska, from their headquarters in Garland, Texas (800-495-5830).
  • Terry Coleman, of TMC Sales, Los Angeles, Calif. (323-646-0941), now covers California, Oregon, and Washington.
  • Dave Topper, of Topper Sales, Wallingford, Conn. (888-734-1439), serves Massachusetts, Maine, Vermont, New Hampshire, Connecticut, Rhode Island, and the areas of New York State within the 516 area code.
Phillips stresses that the wholesale pricing for all Heaven products will remain the same under the new sales system. "Retailers will pay no higher prices for orders placed through the representative firms," she confirms.

"As always, retailers may contact us directly for any questions or concerns they may have," Phillips adds, "but, we ask their support in placing orders and scheduling tastings and promotions directly with our representatives, who will also support these events. Their efforts will free us up to create even more of the exciting and imaginative events that Heavenly Cigars is known for."


Newly-Appointed Representatives, Canadian Distributor Help Launch Alec Bradley Medalist

Dania, FL - Medalist, the newest premium cigar from Alec Bradley Cigar Company, is receiving an extra boost with the support of two new company representatives and a nationwide Canadian distributor. Alec Bradley founder and president Alan Rubin says the appointments fill a strong need for U.S. coverage from the Rockies west as well as in Canada, and come "just in time to help with the launch parties we're scheduling now for our Alec Bradley Medalist line."

Medalist is the company's first full-bodied premium cigar aimed at a "higher market plateau" than its traditional value-priced premium cigars.

The new sales additions are:

  • David Jensen, Olympia, Washington (Cell: 360-790-3269, Fax: 360-459-7541), now represents Alec Bradley in Washington, Oregon, Idaho, and Hawaii.
  • Fabien Ziegler, Orange, Calif. (Cell: 714-264-5450, Fax: 714-838-8777), is the new rep for Reno, Nevada and parts of California.
  • Joe Bondi, Bondele Cigar Company, Brampton, Ontario (Tel: 905-793-3107, Fax: 905-793-5063), is now Alec Bradley's Canadian distributor for Trilogy.
"Joe held his first retailer event on May 31st, for which he bought a large number of boxes of our new Round Trilogy premium cigars," reports Rubin. "He called back the day after the event to advise he sold the entire inventory, and doubled his Trilogy order."

For the Medalist promotion, Alec Bradley's representatives began planning and hosting events nationwide, starting at the end of June. Tobacco retailers interested in planning a "Medalist party" event can contact their local representative, or contact the company directly at Toll-free: 888-426-4397, E-mail: lori@alecbradley.com.


Freed from Quotas, Pennsylvania Tobacco Growth Spells Competition in Industry

Harrisburg, PA - Pennsylvania projects that burley tobacco planting will translate into the state's largest one-year increase in tobacco acreage in 25 years. If burley production is successful and brings higher prices, it could end a 90-year decline in tobacco growing north of the Mason-Dixon Line and prompt at least a modest increase in acreage, observers say.

Enough Pennsylvania growers have planted burley tobacco - used in cigarettes - that it may stem the state's long slide in tobacco production, a window that opened last year with the lifting of the decades-old federal quota system.

The opposite effect is being seen across the "burley belt" of Ohio, Kentucky, Missouri, Indiana, Tennessee, Virginia, and North Carolina, where growers will be paid to stop raising the crop. There, prices will drop and a 30% decrease in production is expected.

Efforts could be made to grow burley in non-quota states such as Louisiana and Illinois, but for now, "everybody's talking about Pennsylvania," said Daniel Green, a spokesman for the Burley Tobacco Growers Cooperative Association in Lexington, Ky. Much of Pennsylvania's tobacco is planted in Lancaster County, where large Amish and Mennonite families can muster the farmhands necessary for the labor-intensive burley tobacco harvest, and more cheaply than hired labor.

Burley's return to Pennsylvania comes 67 years after the federal government placed a quota on burley growing to ensure that prices remained stable. Pennsylvania's farmers rejected the quotas because they opposed government intervention, and instead grew other varieties of tobacco that are used sparingly in cigarettes.

But in recent years, cigarette manufacturers have increasingly bought foreign-grown tobacco, trapping American growers in an uncompetitive framework of price supports. The outcry prompted Congress to lift the quota last year, freeing Pennsylvania farmers to once again grow burley.

About 2,400 acres of burley tobacco have been planted in the state according to agricultural projections released March 1. Although Pennsylvania supplies only one percent of the nation's tobacco, any increase could represent a first step toward reviving the state's crop, which totaled 49,000 acres in 1918.

Buyers, including cigarette maker, Philip Morris USA, have been signing contracts and negotiating with growers in Pennsylvania.


Premium Cigar Import Estimates Are Revised
Understated Machine-made Totals Meant Overstated Premiums


Washington, DC - The Cigar Association of America, Inc. (CAA) has released revised, lower estimates of premium cigar imports for 2001 through 2004, based on revised data from the trade association's member manufacturers.

"The number of machine-made cigars imported in the premium cigar category has been understated each year since 2001," explained Norman Sharp, executive director of the CAA. "This means that our estimates of pure premium cigar imports have been overstated" for the same periods.

Estimates have been revised as far back as 2001, where premium cigar imports are now estimated to have been 249.3 million, nearly identical to 2000's estimated 249.2 million.

For 2004, the official premium cigar import estimate now stands at 283.1 million sticks, rather than the 304.5 million previously published in various industry sources including Smokeshop.

Premium cigar import growth last year, under the revised data, is now estimated at 9.5% over 2003, while 2003 grew by 2.9% over 2002, and 2002 barely budged over 2001, a mere .04%. For 2001 versus 2000, the difference was statistically even. Five-year growth of premium cigar imports to the U.S., as tracked from 1999 through 2004, now stands at 13.7%.

All of the revised data involved adjustments to premium cigar import estimates specific to the Dominican Republic from 2001 through 2004. No other previously published estimates for other supplier nations were changed.

"One of the big challenges in our industry is that of trying to arrive at an estimate of the number of premium cigars sold at retail in the U.S.," wrote Sharp in a May 24 bulletin to members. "While there is no sure way of arriving at such a number, one must always start with data showing how many premium cigars are imported into the U.S."

Government data on premium cigar imports, however, includes an unknown amount of machine-made cigars.

"In recent years, thanks to the cooperation of our member companies, we've been able to subtract out those machine-made cigars in order to arrive at an estimate for pure premium cigar imports," Sharp explains. "Even so, we have suspected that the total number of premium cigars has been overstated."

The CAA, says Sharp, is indebted to member manufacturers who share their data on machine-made cigars with the association, enabling it to generate increasingly more reliable estimates of the number of premium cigars imported into the U.S.

"We now believe that [our] estimates are far more reliable that they have been in the past," said Sharp.

Year to date through March 2005, premium cigar imports are up 7.97% over 2005 - with estimated adjustments for machine-made cigars incorporated.


Obituary: Theo Rudman

Theo Rudman, one of South Africa's most prominent cigar and port wine enthusiasts, died November 2, 2004 following a long battle with cancer. He was 61.

Rudman, the author of Rudman's Complete Pocket Guide to Cigars, sold in 16 countries, and Rudman's Cigar Buying Guide, sold exclusively in the United States, was the founding editor of Cigarstyle, a leading South African quarterly lifestyle magazine.

A management consultant by profession, he founded Business Dynamics, a training company, in 1981, and ran the Self Employment Institute, a non-profit organization dedicated to teaching entrepreneurial skills to unemployed people. As an aid in this teaching, he wrote the best-selling The Mini Business Manual, a book which sets out the basic requirements for running a small business.

It was his passion for the "good life," though, that brought his name to the forefront, first directing his passions to South African ports and later turning his enthusiasm and attention to cigars, where his knowledge gained him international acclaim. In addition to his books, he pioneered cigar dinners in South Africa, founded cigar clubs, and created a range of cigars accessories.

In 1998 he was the first recipient of the annual PGC. Hajenius Cigar Luminary of the Year award, and in 2003 he was elected the Habano Man of the Year - Communications for 2002 by Habanos S.A.

Rudman was a driving force in the creation of the South African Port Producers' Association in the early 1990s, and served as the organization's deputy chairman for 10 year. He championed the use of the traditional Portuguese varieties and production methods and lectured extensively.



SMOKESHOP - August, 2005