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Oct./Nov.
2001

TRENDS AND TRENDSETTERS IN SPECIALTY TOBACCO RETAILING
Hawaii Expects Millions from New Tobacco Tax Stamping
Honolulu - Hawaiian officials predict the state will collect about $18 million more in tobacco taxes this year compared to 2000. The surge in tobacco taxes is a result of the state's new tax stamping program, officials said. The new law requires all cigarettes sold statewide be stamped showing that a $1-per-pack tax has been paid.

Unlicensed distributors can face up to five years in prison and a $5,000 fine. About 20 people have been arrested this year for selling or shipping unstamped cigarettes in Hawaii.

The state collected about $4.5 million per month in tobacco taxes last year. Those collections have jumped this year to about $6 million per month. The figures indicate that about a quarter of all cigarettes - or two million cartons each year - was sold in Hawaii illegally before the stamp program was started.

Hawaii has the second-highest cigarette tax rate in the country but is among the last states to adopt a cigarette tax stamp.


Trade Center Collapse Closes Winter Garden Barclay-Rex

New York - Barclay-Rex, which owns four tobacco shops in Manhattan, has been operating with one less store since the September 11 terrorist attacks. Extensive damage to the World Financial Center, caused by the collapse of the adjacent Twin Towers of the World Trade Center, has closed the entire complex until repairs on the building are complete.

Owner Vince Nastri says the store - which was located in the facility's Winter Garden - a soaring glass atrium with high-end retail shops and restaurants - was looted following the WTC collapse. The glass door to the shop was shattered, and merchandise and cash from the register were stolen. Until sufficient repairs are made to the building tenants are unable to even access offices or retail space inside the building, much less begin to repair their own spaces. Nastri, who opened the Winter Garden store in 1998 (Smokeshop June/July 1999), said it could be half a year before the shop is able to reopen.


Huge Surprise Tax Hike on Snuff, Chew Stuns California
Sacramento - An unexpected decision by California's state Board of Equalization in June resulted in a massive tax hike on chewing tobacco and snuff.

The board's action separated the smokeless tobacco tax from a 12-year-old formula that had set the rate at an average 38% of wholesale price. Under the new regulation, smokeless products are taxed according to weight, increasing the retail price on some products by as much as 290%. Moist snuff, the most popular type of smokeless tobacco (brands such as Copenhagen and Skoal), now costs around $8, up from about $3. A 3-ounce bag of Red Man chewing tobacco retails for as much as $10, up from $4. Dry snuff doubled in price.

The board member who led the tax effort said his action was an attempt to slash at least a third of smokeless sales while generating up $67 million in additional revenue for state coffers. Black markets could cheat the state out of all potential revenues, however. Unlikely opposition to the tax included the American Heart Association and entertainer Rob Reiner, who led California's Proposition 10 tax hike on cigarettes and cigars.


Third Riegel's Shop Opens

Fort Wayne, Indiana - Riegel's Pipe and Tobaccos, which was first established in 1874, has opened a third store in Fort Wayne at the Covington Plaza. Riegel's acquired the store fixtures from the former Tinderbox located at the same location. The store is situated in Aboite township, a rapidly growing, affluent portion of Fort Wayne. The new store opened on August 24, and from October 10 through October 13th Riegel's held a grand opening celebration, running specials at all three stores, as well as free cigar sampling at the new location. "Having been open for just three weeks now, sales have exceeded our expectations for a new store, and the feedback from customers has been very positive," explained John Minnich, general manager and Frank Bougher, assistant manager. Riegel's is owned by Frank's father Bill Bougher, whose family has held ownership interest in the business since 1904.

Havana Republic Closes Weston Cigar Emporium
Weston, Florida - Havana Republic, a retailer of premium cigars and accessories, closed its Weston store on August 3, 2001. The tobacco shop was the first of four retail locations the company operates, and opened in 1997.

"Although this was a difficult and emotional decision, it is consistent with our commitment to reward investors and shareholders with strong earnings," explained Stephen Schatzman, Havana Republic c.e.o. and president. "Every location must deliver significant revenue consistently. Resources can now be devoted to more lucrative locations that provide greater revenues, profit, and branding. Closing the Weston emporium will reduce overhead by approximately $110,000 annually."

In explaining its renewed commitment to profitability, the company cited two strong points in its operation, the www.havanrepublic.com web site and the newest Havana Republic emporium located in the Desert Passage at the Aladdin Hotel/Resort in Las Vegas. The company says its e-commerce website has received tremendous praise from cigar enthusiasts worldwide and continues to grow. The emporium in Aladdin Hotel/Resort immediately surpassed all revenue and profit projections following its grand opening in March 2001.


Ashton Distributors Names Peterson Pipe Retailers of the Year
Philadelphia - Ashton Distributors, Inc., named this year's four regional Peterson Pipe Retailers of the Year at the Tampa RTDA trade show. Each retailer received a crystal trophy for their efforts to sell and promote Peterson Pipes.

The West Coast winner is Donna Brown of the Mission Pipe Shop, San Jose, California. The winner from the South is Kyle Haass of Pipe World, Austin, Texas.From the Midwest, the winner is Mike Spicer of Tinderbox at Tuttle Crossing, Dublin, Ohio. And the East Coast winner is Eric Josten of Queensbury Cigar and Pipe, Queensbury, New York.

Ashton Distributors, Inc. is the exclusive distributor of Ashton cigars and Ashton products and the exclusive distributor of Peterson Pipes of Dublin in the United States.


House of Hajenius Celebrates 175th

Amsterdam - The House of Hajenius, one of Europe's most renowned cigar shops, kicked off a celebration on October 1 commemorating its 175th anniversary. The festivities were launched with the opening of "Art et Cigare," an all-cigar-themed mixed-media art collection at the Jan van der Togt Museum in Amstlveen. The collection, which will later be exhibited abroad, consists of 50 works by leading artists from around the world.

A specially-commissioned piece of music entitled "Cigaria, a trip around the world of tobacco," was performed for the first time. A copy of a jubilee book, featuring beautiful photography and contributions from well-known Amerterdam columnists, poets, and artists, was presented to Amsterdam's mayor, along with a folding diorama "pop-up" depicting Hajenius' unique Art Deco shop. Finally, a cigar was developed especially for the anniversary, "Jubilaris," presented in boxes of 20 with a humidifier and a two-cigar wooden case.


SMOKESHOP - October/November 2001