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August,
2005

TOBACCO INDUSTRY NEWS

Colibri Group is Sold;
Levinger Remains President


Providence, RI - The Colibri Group, one of the best-known merchandise suppliers to tobacconists, clock and specialty retailers, and jewelry stores, has been sold to a group comprised of three major investment firms and former owner Fred Levinger. The transaction, effective June 13, opens potential business opportunities for Colibri overseas, especially China.

Details of the sale weren't released.

Levinger, 67, remains as president and chief executive officer, giving special attention to marketing and new-product development.

No changes in the company's management, its 500 employees, location, or operations are planned for the foreseeable future, said Levinger. The company - which expects to do $100 million in sales this year - has just signed a new lease for its headquarters in Providence, R.I.

"This sale is a very good thing for the employees," Levinger said. "No one is coming in to take over and make changes." He said the new owners intend to use Colibri Group for further acquisitions, though none are immediately planned.

The three major investors are the lead group, Founders Equity Inc., New York City; Mainstream Resources, Westport, Conn.; and Citic Provident (the New York arm of China's largest financial conglomerate, Citic Group), which has been looking to invest in consumer goods and which the other two brought into the deal. Levinger is the fourth partner and remains a substantive shareholder. The sale caps six months of negotiations.

Colibri has been approached in recent years by several potential buyers, "but this is all about character, not just money. These people have the best interests of the company at heart. They believe in its brands as we [do], and see [the company] as a platform to grow on."

One area of potential growth is overseas, where Colibri now does only 5% of its business. Colibri's new owners "have a broad perspective, indicated by taking in a Chinese partner," Levinger said. "We'll have better access in China from a structural point of view." So one area he's asked the new owners to look at is "opening those markets to our brand and doing more in China, a major market, than we could do on our own."

Levinger and his father bought Colibri in 1971, when it had annual sales of $1.3 million. The Colibri Group manufactures and markets luxury lighters and men's accessories under the Colibri and Firebird brands worldwide. The company is the exclusive U.S. distributor of S.T. Dupont luxury writing instruments and lighters. It also manufactures 18kt gold, 14kt gold, and sterling silver women and men's jewelry under its brand names Krementz and Dolan & Bullock. The company owns and distributes Seth Thomas Clocks, which is the oldest clock brand in America.


Altadis U.S.A. Cigar Factory in Puerto Rico Wins Multiple Awards for Excellence

Ft. Lauderdale, FL - Altadis U.S.A. announced that its subsidiary Congar International Corp. of Puerto Rico, which makes many of Altadis' mass-market cigars, was the recipient of multiple honors at the Third Annual Awards of Excellence to Employers and Academic Institutions Ceremony.

According to a company spokesperson, "This recognition of being the 'best of the best' is the result of our teamwork, dedication and commitment to excellence." Theo Folz, president and c.e.o. of Altadis U.S.A., also offered his congratulations to the team in Puerto Rico adding, "This is well-deserved recognition of the efforts they make on behalf of our employees."

The event is sponsored by Consorcio Caguas-Guayama. Congar International won the following awards:

  • Employer of Excellence 2005
  • Best Retention of Displaced Employees 2005 - First Place
  • Rookie of the Year 2005
  • Best Collaborator to Investment 2005 - Second Place
  • Best Retention on the Employment 2005 - Second Place
Congar, which was founded in 1968, is based in Cayey, and employs over 1,300 people. It is Puerto Rico's only cigar manufacturer.

Hundreds of Counterfeit Xikar Cigar Cutters Discovered in Tommy Bahama Clothing Stores

Kansas City, MO - The discovery of hundreds of counterfeit Xikar Xi cigar cutters for sale in Tommy Bahama retail stores around the country earlier this year came as a huge surprise to the Kansas City-based manufacturer, which had never before seen an illegal knockoff of its signature double guillotine cutter.

A Xikar sales rep visiting a Tommy Bahama retail store came across the offending cutter for sale by chance, explains Kurt Van Keppel, Xikar president and co-founder. He purchased the cutter and had it on Van Keppel's desk for inspection the next morning.

"While this cutter was a poor copy of the Xi cutter, it was still illegal," Van Keppel says. "Though it lacked a spring and locking mechanism, it was a violation, as our patents intentionally cover both design and function."

Van Keppel knew these knock-off cigar cutters were a rip-off to unsuspecting buyers, and took immediate action to head off any potential damage to the Xi's perceived value or to the Xikar brand reputation.

"Tommy Bahama had violated our patent in two areas," Van Keppel says, "both in utility and design. We immediately filed suit in Federal Court, Western District of Missouri, against Tommy Bahama, to protect our intellectual property, and to protect our right as a plaintiff in the matter."

Xikar, however, did not serve Tommy Bahama with the lawsuit, but instead contacted the company, outlining terms for resolution. A reply from Tommy Bahama's chief corporate counsel arrived soon after, indicating that they had not knowingly or willfully breached the Xikar patent. Further, they wanted to make amends.

Within weeks, the matter was settled. Tommy Bahama agreed to pull the fraudulent cutters from their shelves nationally, and return them to Xikar for destruction.

With headquarters in New York City and Seattle, Tommy Bahama is an upscale retailer of island- inspired fashion and home accessories. They are owned by Oxford Industries of Atlanta, and have stores across the U.S. and Canada.

The distributor and source of the counterfeit cutters is the next target of investigation, he added.

"We will protect our Xikar brand, so customers can confidently sell our products without worry of cheap knockoffs in the marketplace," Van Keppel emphasized. "Selling counterfeits is illegal; knowingly buying a counterfeit is illegal as well. We will aggressively pursue any importer, wholesaler or retailer who violates our intellectual property rights."


Cigar Classics to Manufacture Popular Paradigm System Cigar Humidifier

Apex, NC - Cigar Classics, Inc., a privately-owned North Carolina-based cigar accessories company, has purchased the patent and trademark rights to the Paradigm System humidifier. The company bought the rights to the popular humidifier in order to keep the unique device in production and to make it available quickly to its distributors.

"Our clients love this product," Tal Holloway, co-founder of Cigar Classics Inc. and partner Kent Goellner explain, "so we wanted to keep it on the market for them and make it more accessible through faster production."

The Paradigm humidifier works inside of humidors to keep cigars at 70 percent humidity. The high-tech device holds 75 percent more distilled water than competitive products and its anti-microbial, anti-fungal sponge doesn't require the use of any chemical solutions. It joins several other international top-selling humidor products available from Cigar Classics. It's available in fives sizes for cigar capacities from 15 to 250 cigars.

In business since 1995, Cigar Classics Inc., began with the Pocket Humidor, a product that Holloway invented with his partner and co-founder, Shelby Smithey.

The company is a member of the Retail Tobacco Dealers of America, and will display its products to the industry at the RTDA trade show in New Orleans on August 7-10, 2005, at booth #674.

Cigar Classics, Inc., 5408 Dutch Elm Drive, Apex NC 27539, Toll-free: (800) 371-3954, Tel: (919) 460-3882, Web: www.cigarclassics.com.


Habana Cuba to Launch Cigar Brand Jointly Owned, Developed by Firm's Sales Reps

Miami Lakes, FL - Coinciding with its third anniversary, Habana Cuba Cigar Company is unveiling a creatively structured new cigar brand, Vista de Cuba, that is a significant departure from typical cigar industry practices.

The Miami-based company is evolving its partnership with its independent manufacturers' representatives across the U.S. through a vested interest in the line. Vista de Cuba is jointly owned by Habana Cuba and its representatives, the core group of whom has been with the company since it was formed three years ago. Representatives, while still being independent, will have an opportunity to build equity in a cigar line, sharing a percentage of the profit made by the line in addition to their regular sales commissions.

All of the involved reps - Dave Topper, Bob Morrison, Paul Hernandez, Scott Weeks, Jason Poehler, Teri Duran, Phil LaBondano, Terry Coleman, and Becky Bezemek - have had an equal opportunity to provide input into all aspects of this line, from blend, binder, and wrapper to name and package design. The line will represent the culmination of a combined 90 years of cigar industry experience between the reps, knowing what works and what doesn't in nearly every market in the continental United States.

"Loyalty ranks high in Habana Cuba's corporate culture," states Habana Cuba vice president Hank Bischoff. "We try not to treat our independent reps like independent reps. They're part of 'us'." The line was scheduled to launch in July, 2005.

Habana Cuba Cigar Co., Miami Lakes, Fla., Tel: (877) 902-8226, Fax: (305) 557-2219, Web: www.HabanaCubaCigars.com.



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