logo
















logo

logo

logo

logo
August 1998
Volume 25
Number 4

RETAILER & TOBACCO INDUSTRY NEWS

Fuente Cigar Wins Trademark Struggle with Opus One
Court Affirms Co.'s Right to Fuente Fuente OpusX BrandName
In June, Fuente Cigar Ltd. won its two-and-a-half year trademark struggle with California winemaker Opus One, a partnership of Robert Mondavi Corp. and Baron Phillipe de Rothschild, S.A. A Federal District Court Judge in Tampa ruled in favor of Fuente Cigar Ltd. in the suit, which was brought by Opus One in October 1996 and alleged trademark infringement by Fuente Cigar Ltd. and its Fuente Fuente OpusX, the high-profile, limited-production superpremium cigar the company introduced in 1995. The Mondavi/ Rothschild company produces and markets a vintage wine under the brand name Opus One.

The judge's decision clearly indicated that there was no infringement by Fuente. In an earlier ruling in March, the judge noted that "there is a negligible likelihood of confusion among consumers as to the source of the Fuente Fuente OpusX cigar being in fact Opus One and there is no evidence that Fuente intentionally copied Opus One's mark." The judge also stated that "there is no identity of (similar) advertising media (used by Fuente and Opus One to promote their respective products)."

"Our family is extremely pleased with the judge's decision," reported a "drained" Carlos Fuente, Jr., president of Fuente Cigar Ltd. "The Opus One suit came as a total surprise to us," he added. "We carefully followed each step in the trademark registration process...We always passionately believed we were right, which is why we fought for the past two-and-a-half years."

The Fuente Fuente OpusX, which was introduced in late 1995, remains in very limited distribution, available to only approximately 300 authorized retail stores located east of the Mississippi River. The all Dominican leaf cigar uses a pioneering premium-grade Cuba-seed wrapper grown by the Fuente family in the Dominican Republic, a project first undertaken in 1991 at the family's Chateau de la Fuente farm. Previous industry attempts to grow premium - grade wrapper leaf on the Caribbean island had been largely unsuccessful, and wrapper farming had been limited primarily to the production of green candela grades. The Fuente family fought an uphill battle and fended off many critics before successfully bringing the Dominican wrapper to market.

In addition, all of the tobaccos used in the Fuente Fuente OpusX are aged an extended period of time, which has further limited production of the cigar. According to Wayne Suarez, president of Fuente Group International, the family is trying to expand its tobacco farms in the Dominican Republic in an effort to increase Fuente Fuente OpusX production, but that it's a process "it just can't be rushed along."

Bearing a suggested retail price of from $7.50 to $14.50 for the cigar's eight sizes and shapes, the Fuente Fuente OpusX has traditionally been limited to only a few cigars per customer by authorized retailers.

It was never the cigar itself at issue, but the common use of the name "opus." Opus One had contended that the Fuente Fuente OpusX infringed on its Opus One wine trademark as well as a separate trademark the winemaker holds on Opus One for use on manufactured tobacco.

"We could not have won without the support we received from the cigar community, people who believed in our family's integrity," said Fuente. "I pray that this battle is over, and that no other family in this industry will be called upon to defend their name. Now that this is behind us, we can focus on what we've been doing for four generations - making cigars."

Bits & Pieces
SACRAMENTO, Calif. - A California Department of Health Services survey indicates that non-compliance with the state's smoking ban is high, according to the National Smokers Alliance (NSA). Since it went into effect, 25% of smokers still smoked inside a bar; 14% of bar patrons were less likely to visit a bar; and smokers are 43% more likely to be bar patrons. The group criticized the state for releasing only portions of the survey findings. JERUSALEM - Israeli Prime Minister Benjamin Netanyahu was costing taxpayers almost $40,000 a year on Cuban cigars, Yedioth Ahronoth reported in April. Netanyahu's office was spending $3,200 a month on cigars for himself and guests. Insisting the cigars were a legitimate entertainment expense, Netanyahu's aides said just a few days later that the funds would now be used for other refreshments, according to Israel Radio. SCOTTSDALE, Ariz. - Scottsdale Cigar Co., Inc. announced an official name change to Niche Resources, Inc. The name was changed to more fully reflect the company's philosophy in the marketplace and to create a clearer distinction between the parent company and its subsidiaries. The company also authorized a 50-for-1 reverse split of all issued common stock, necessary to establish a market cap more consistent with outstanding shares.
Hickory Farms, Big Butt Debut Retail Kiosks
Target Malls With Cigars and Themed Merchandise

Hickory Farms, the mall-based holiday retail powerhouse, has developed retail kiosks in shopping malls offering the popular line of cigars and accessories from California-based Big Butt Cigar Co. The kiosks, which offer no Hickory Farms products, operate under the name Big Butt Cigar Stores.

The companies began with a short-run test of the kiosk concept in eight cities throughout California, Texas, Georgia, Illinois, Nevada, and Ohio. They plan to open no fewer than 100 locations in the next twelve months.

The union of Hickory Farms' strength in retail operations and Big Butt's product development and marketing experience enables Big Butt's product line to gain exposure in prime shopping venues nationwide. Since Hickory Farms sales are mostly seasonal, the new kiosks have the potential to generate year-round sales of Big Butt Cigar Co.'s products, utilizing the company's existing staff and longtime relationships with mall owners. "We have been looking for 12-month and counter-seasonal opportunities which have good growth potential," said Geoff Smith, vice president of Retail and Franchise Operations at Hickory Farms. "With Big Butt's product development, marketing, and success to date, we believe we can roll out a very successful network of cost-effective retail -BIG BUTT continued from pg. 22 operations."

According to company founder Joe Seither, Big Butt Cigar Co. has been searching for a venue to showcase their product line and further increase brand name visibility. The company has discovered, in its years of building a successful distribution network, that its successful wholesale customers were retailers that knew how to effectively merchandise goods. By uniting with Hickory Farms, the company believes it has found a retail pipeline that allows them to reach a wider market. Big Butt hopes the increased visibility will trickle down to the smoke shops that carry their products resulting in increased sales.


Continued on next page...