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Oct./Nov.
2000

TRENDS AND TRENDSETTERS IN SPECIALTY TOBACCO RETAILING

New York Signs Fire-Safe Cigarette Law
Internet Sales Banned; Ist Legal Challenge is Filed

ALBANY, NY - New York Governor George Pataki signed laws on August 18 aimed at making cigarettes less likely to set fires and harder for minors to obtain, but he may face a legal battle over the initiatives.

A new measure that bans direct sales via the Internet, telephone, or mail order to consumers has already prompted one of several potential lawsuits. Santa Fe Natural Tobacco Co. has sued the state, contending the ban violates interstate commerce laws and is unconstitutional. Pataki calls the Internet ban an anti-teen smoking measure, but truckers are also concerned because the law makes it a felony to deliver cigarettes to anyone but licensed dealers. Transporting products without tax stamps would also be a felony.

While a spokesman for New York’s Department of Taxation and Finance says that Indian businesses won’t have to comply with the law and that truckers can still deliver to reservation stores, Indian nations are concerned that their businesses will still be hurt, since deliveries from Indian Internet businesses would still have to comply.

Motivating Pataki is a sharp decline in cigarette sales at off-reservation stores since March, when the state levied the highest cigarette taxes in the nation. Cigarette manufacturers say the drop-off is the result of the higher tax, a trend away from smoking, and the availability of cheaper, untaxed cigarettes from Indian nations via direct sales and the Internet.

The so-called “fire-safe’’ cigarette bill requires the state to set fire-safety standards for cigarettes sold in New York by Jan. 1, 2003. The standards would take effect by July 1, 2003. Manufacturers prefer a single national standard, and are considering a suit, but so far they’re “studying the law and have made no decision,’’ said a Lorillard spokesman.

“It’s the first time anywhere to our knowledge that cigarettes are going to be regulated for safety; it really is a national groundbreaking piece of legislation,’’ said Russ Haven, of New York Public Interest Research Group. A similar measure failed to pass in California in August.


International Internet to Begin Catalog Sales
Cyber Retailer to Publish Printed Wholesale and Retail Catalogs

BOCA RATON, FL - International Internet, Inc., an online retailer of cigars and cigar accessories, says it plans to expand its retail, online, and wholesale cigar businesses with the addition of catalogue sales.

The new catalogues are to carry a wide variety of cigars and cigar accessories at discounted prices. The initial fall test catalogue is to be sent out to retail customers September 15, 2000 with a second expanded winter catalogue expected to be mailed in early November. The company’s 2000/2001 wholesale catalog is slated to begin distribution in October 2000.

“Many e-tailers have been testing the waters outside the Web for sometime now,” stated Brian John, President of StogiesOnline.com and CigarCigar.com. “ Our newly developed catalogue is designed specifically to capture market share from other existing players in the cigar catalogue business. Our strategy is simply to provide customers with better price and selection than our competitors. In many instances our prices are nearly half that of competing catalogues. This is just the next logical step in our evolution and an additional revenue stream.”


Havana Republic Cigar Emporium to Open in Aladdin Hotel, Vegas
BOCA RATON, FL - Havana Republic, Inc., an upscale retailer of cigars and accessories, has signed a letter of intent with TrizecHahn Development Corp. to open a cigar emporium at the Desert Passage located at the Aladdin Hotel Resort and Casino in Las Vegas, a $1.3 billion complex on the famed Las Vegas Strip. The cigar emporium, Havana Republic’s fourth with a fifth scheduled to open in West Palm Beach, will be one of 130 retail outlets at Desert Passage, which is adjacent to the new Paris Las Vegas and Bellagio Resorts. Havana Republic’s three other cigar emporiums all operate in south Florida. The opening of the Desert Passage outlet is scheduled for December 15.


Davidoff Taps Boston’s Davids Kitchens for its New York City Store
NEW YORK - Davidoff of Geneva has named David Kitchens manager of its newly re-opened Madison Avenue retail cigar store in New York City. Kitchens, formerly the general manager of Gloucester Street Cigar Co. in Boston, succeeds Diana Wagner, who had served as store manager for over a decade. Davidoff relocated its Madison Avenue store to a ritzy new two-story corner location in April. A number of Manahattan’s top cigar retailers, including De La Concha, Barclay-Rex, Nat Sherman, JR Cigar, and Arnold’s are located within a 10-block radius in the heart of midtown.


Competition Too Big for Endwell Cigar Store
JOHNSON, NY - Time has passed by the Endwell Cigar Store, which for 87 years has sold tobacco, coffee, newspapers, and a variety of convenience goods from its central location on Main Street in Johnson City. In September, owner Jack Riley closed the shop to make way for a pizza parlor. Every factor that Riley cites in his decision to close stems from the way Americans shop today, compared with how they shopped when Pat Kelly, the uncle of Riley’s mother-in-law, first opened the store in 1913. An exodus to the suburbs meant a loss of retail traffic on Main Street. Demand for convenience food items and newspapers was increasingly ceded to drug stores, convenience stores, and large-scale suburban supermarkets. The shop had the first lottery machine in the area, says Riley, noting “There’s lottery just about everywhere.” And recent tobacco tax increases in New York state have driven cigarette sales across the nearby state line to Pennsylvania.


Fuente Names Window Contest Winners
SANTIAGO, D.R. - Three winners have been chosen in the 10th Annual Arturo Fuente Display Contest.

Shah Ashvin of Marketplace Smoke Shop, Spring Valley, NY; Arthur Kemper of The Humidor-North Star Mall, San Antonio, TX; and Rocky Moore of Edwards of Sawgrass Village, Ponte Vedra Beach, FL were picked from hundreds of entrants. Each winner and his spouse will be guests of the Fuente family for five days, four nights in the Dominican Republic in early 2001. The itinerary includes visits to the Fuente factories and Chateau de la Fuente plantation, a stay at the foremost hotel in Puerta Plata, and a trip to the Dominican Republic’s capital, Santo Domingo.

Runners-up included: Ambassador Fine Cigars, Phoenix, AZ; Bacca Cigar Co., Champaign, IL; Barlows Premium Cigars & Pipes, LaFayette, CO; Briar and Bean, Clarksville, TN; Burns Tobacconist, Chattanooga, TN; Cascade Cigar & Wine, Portland, OR; Cigars & Stripes, Berwyn, IL; Club 909 Cigar Shoppe & Sandee’s Cigars, Monaca, PA; David’s Briar Shoppe, Des Moines, IA; Diebels’ Sportsmens Gallery, Kansas City, MO; Edwards of San Marcos, Jacksonville, FL; Fuss N’ Stuff, Mableton, GA; Gatlinburlier, Gatlinburg, TN; Humidor One, Southfield, MI; McCranies, Charlotte, NC; Ol’ Times, Orlando, FL; Primo Cigar, Del Mar, CA; Sensation Cigars & Tobacco, Dawsonville, GA; Sir Puff’s Cafe, Westfield, NJ; Smoker’s Delight, Union, NJ; Speakeasy Tobacconist, San Diego, CA; The Cigar Affair, Maumee, OH; Tinder Box, Murray, UT; Tinder Box, Wellesley, MA; Tobacco Shop, Ridgewood, NJ; Uptown Cigar Co., Kingston, NY; Westminster Cigar Co., Westminster, MD; and Windsor Cigar Co., Princeton Junction, NJ.

Each runner-up will receive a Sony AM/FM World Time Travel Clock Radio. As always, every contest participant will receive a gift, this year an Arturo Fuente athletic bag. All contestants this year had the added bonus of guaranteed purchase of a maximum three boxes of the new Arturo Fuente Sun Grown Flor Fina 8-5-8.

“We are indebted to all the retailers for their continuing cooperation in promoting Arturo Fuente and Montesino cigars,” ” said Carlos Fuente, Jr., president of Tabacalera A. Fuente y Cia.



SMOKESHOP - October 2000