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October,
2006

TOBACCO INDUSTRY NEWS
Production, Distribution, Regulation, Trade...

Palmas Puro Cigars Joins Forces with Luis Sanchez’s La Tradicion Cubana at Little Havana Location

Miami - Palmas Puro Cigars has entered into a joint-venture with La Tradicion Cubana and has recently moved from its previous headquarters on Lincoln Road in Miami Beach and joined La Tradicion Cubana at its headquarters on SouthWest Eighth Street in “Little Havana” in Miami. The partners have re-vamped the storefront, installing a much larger cooler and humidor as well as offices.

Sanchez, who has been rolling cigars at the Little Havana location for over ten years, recently opened a new 20,000 square foot cigar factory in Santiago, Dominican Republic called Sanchez-Romay, S.A. The new facility allows for greater manufacturing capacity “without sacrificing any quality which has been the benchmark of all of the La Tradicion Cubana brands,” explains Sanchez. In addition to his namesake La Tradicion Cubana cigars, Sanchez also produces Sabor Cubano and Las Memorias Cubana lines.

Maya produces his namesake Palmas Puro cigars in five traditional sizes.


Reynolds, A.G.s, Announce Flavored Cigarette Agreement

Winston-Salem, NC - R.J. Reynolds Tobacco Company and a multi-state group of attorneys general announced a collective agreement on the future marketing of specialty “flavored” cigarettes to adult smokers.

“This agreement codifies R.J. Reynolds’ practice for some time of not using language describing fruit or candy flavors in magazine and newspaper advertising, or point-of-sale communications in non-age-restricted venues,” said Lynn J. Beasley, R.J. Reynolds’ president and chief operating officer.

In addition to the conditions of the agreement, which are specific to the company’s specialty blends, R.J. Reynolds announced it will voluntarily extend comparable guidelines to all of its brands. “We recognize that the past use of certain names on a limited number of our brand styles resulted in unintended perceptions and concerns,” Beasley said.

Under the agreement, other than in adult-only venues and communications, R.J. Reynolds’ specialty blends will not use the name of a fruit, candy or alcoholic beverage in the future naming of its cigarette brand styles. R.J. Reynolds further agreed to limit its use of fruit, candy, and alcoholic beverage names and images in a variety of non age-restricted marketing communications.

Most of R.J. Reynolds’ specialty “flavored” cigarettes were marketed as part of the Camel Exotic Blend family of styles, which were originally introduced in 1999 as a super-premium priced product. In total, these styles represented less than 1/10th of one percent of the company’s annual cigarette volume. In May, R.J. Reynolds ceased manufacturing the last three of its remaining Camel Exotic Blends.


Victor Sinclair Relocates to Atlanta, Names New Operating Partner

Atlanta, GA - Victor Sinclair, a premium cigar manufacturer with factory operations in Santiago, Dominican Republic, has moved to new corporate offices in Atlanta, Georgia. William Rhodes, who purchased the U.S. operations in 1999, continues in his role as managing partner, and Jose Dominiguez, continues as Operating Partner with responsibilities for the Dominican Republic operations. Joining the management team in Atlanta as operating partner is Gerald Young, an experienced veteran in multi-channel business to business and consumer sales and marketing.

“Victor Sinclair has been focused on acquiring and growing the best tobacco in the world - to build the best possible cigar. We are now ready to aggressively market our product lines. We have amazing cigars, but the general public needs to know more about them,” stated William Rhodes, managing partner. “We are going to reintroduce our products and connect with new audiences.” The company produces Series 55 Grand Reserva, Connecticut Yankee, Bohemian, Primeros, Don Rafael, and original Victor Sinclair premiums cigar lines. “We are poised to take Victor Sinclair to the next level.” says Rhodes.

Young is tasked with updating sales processes and creating innovative new methods to drive traffic to retail tobacconists. “We have a breadth of great products and I have the fun job of telling the cigar community about Victor Sinclair,” states Young.

Victor Sinclair, 8601 Dunwoody Place, Suite 144 Atlanta, GA 30350, Tel: (678) 942-3600, Web: www.victorsinclair.com.


Britain’s Imperial Tobacco Buys Davidoff Cigarette Trademark, Targets U.S. Market

London - Imperial Tobacco Group, PLC the world’s fourth largest tobacco company, purchased the worldwide Davidoff cigarette trademark from Germany’s Tchibo Holding AG for approximately $694 million in cash in August.

Imperial Tobacco has been the long-term licensee of the worldwide Davidoff cigarette trademark since its acquisition of Reemtsma in 2002. The Oettinger Davidoff Group owns the worldwide Davidoff trademark for tobacco products other than cigarettes.

“This acquisition provides greater flexibility to develop the (Davidoff) brand, enabling us to increase investment and accelerate its international growth,” said Imperial Tobacco chief executive Gareth Davis in a statement. “Additionally, given the global growth potential of the brand and the likelihood of significant increases in future royalty rates, acquiring the cigarette trademark at this time will ensure that we maximise value for the long term benefit of our shareholders.”

Davidoff is Imperial Tobacco’s key international premium cigarette brand. The firm expects volumes of the brand to reach 14 billion cigarettes this year, up from 13 billion in 2005. First-half volumes rose 7 percent to about 6 billion cigarettes.

In a related development, Imperial Tobacco announced it has filed an application with the States Attorney General for participation in the Master Settlement Agreement (MSA). “The U.S. is a highly attractive market with highly attractive margins,” said Davis, adding that “problems in the states have become ‘significantly less’ than in recent years, and it all points to a more settled landscape in the United States.”

Robert Burton Associates, Ltd., Fairfield, N.J., is the U.S. subsidiary of Imperial Tobacco Group, PLC, and manufactures and distributes rolling papers, cigarette tubes, and tobacco accessories under the brand names E-Z Wider, Joker, Premier Supermatic, Rizla, EL Rey, Club, Rayo, Escort, and Canuma.


General Cigar Teams With Esquire, Bloomies

New York - General Cigar Co. recently teamed up with style arbiter Esquire magazine to host a fall fashion extravaganza at Bloomingdale’s flagship store in New York City. The event was attended by Gotham city’s most well-dressed gentlemen who crowded the popular General Cigar booth to receive complimentary Cohiba cigars and witness the art of cigar rolling.

“Everyone was just mesmerized by the cigar roller and I really think your cigar lounge was the most popular attraction during the night,” commented one Esquire insider. Following the event, many guests retreated to General Cigar’s Club Macanudo luxury cigar bar to enjoy their handcrafted cigars.

Talks are already underway to involve General Cigar in several future high profile Esquire events across the U.S., according to the manufacturer.

Meanwhile, management at Bloomingdale’s was so impressed with General Cigar’s popularity at the Esquire event, they developed a Club Macanudo lounge, held within the exclusive groom’s lounge, as part of the retailer’s semi-annual blockbuster bridal event. General Cigar has been invited to participate in several upcoming men’s fashion events at Bloomingdales.


Famed Toscanos are Back in Italian Hands

Rome - Manifatture Sigaro Toscano, the new company established by the Maccaferri family of Bologna, Italy, to purchase the centuries-old Toscano cigar range from British American Tobacco Italia, has returned the trademarks and factories in Lucca, Foiano della Chiana, and Cava de' Tirreni (SA) to Italian ownership. The new venture was opened with the launch of the new Toscano Soldati cigar dedicated to Mario Soldati - author, director, documentary film maker, and Toscano smoker - on the centenary of his birth. The Maccaferri and Soldati families dedicated the new cigar in September.

Conska Launches Virtual Tobacco Trade Show, TobaccoTradeShow.com

Plainsboro, NJ - Csonka Worldwide has developed and launched an Internet-based “virtual trade show” at TobaccoTradeShow.com (TTS) where tobacco retailers can browse through exhibiting manufacturers and distributors of tobacco products and related merchandise. Only retailers and reselling buyers, representing premium tobacconists and tobacco outlets, are allowed into the “show” which is password protected. Registration and participation for retailers is entirely free. The show launched October 1, and runs in quarterly durations.

“Our virtual trade show satisfies the desperate need for a tobacco trade exhibition in the critical 4th quarter,” says Csonka president Michael Chunko. “It provides all the benefits while eliminating the wasteful expenses and opportunity losses.”

Considering the high cost of attending trade shows and the 2nd and 3rd quarter scheduling of the industry’s two existing major shows, Chunko sees TTS as an ideal opportunity for manufacturers to communicate critical pre-holiday buying opportunities to retailers.

“Traditional trade shows are important. However, timing is everything in life, and there was a significant void in the 4th quarter for our industry,” Chunko explains. “With 35% to 40% of sales happening in the 4th quarter, tobacco retailers need a consolidated location to browse, source, and shop.” Only a modest percentage of retailers and buyers actually travel to attend trade shows, notes Chunko adding that even worse, only a fraction of attendees actually end up seeing all the exhibiting suppliers they should or plan to.

Chunko notes that the Internet has been slowly eroding retailers’ sales, forcing them to become Internet savvy for all trade functions. Most retailers now not only have their own web site, they rely on the Internet for much of their product sourcing and buying. “Based on our survey, much-needed purchasing efficiencies now has them surfing for wholesale deals,” says Chunko.

For exhibitors, cost issues are an even greater consideration. “The cost for tobacco industry suppliers to exhibit at shows is skyrocketing, and the benefits are declining. Exhibitors spend and exorbitant amount of time and resources preparing for shows,” says Chunko. Participation costs for exhibitors in TTS are very reasonable, with basic listings starting at $100 and a nominal $100 upload charge for each 8 x 11 inch product information page which may contain show specials, package deals, product images, holiday show specials, etc. will be only $200.

“Traditional trade shows have a place in this industry,” Chunko stresses, “but their timing is not at all perfect. [Exhibitor’s] goals must be to communicate to buyers when they actually need to make their Fall/holiday purchases.” With TTS, says Chunks, exhibitors have been able to talk to all retailers during the crucial 4th quarter (October through December).

Csonka is tapping its own industry experience as a merchandise supplier to tobacco retailers for over a decade in its efforts to promote TTS as the ideal place to go to shop and to buy buy wholesale merchandise in the 4th quarter.

Michael S. Csonka Worldwide, Plainsboro, N.J., Tel: (609) 514-2766, Fax: (609) 514-7329; Web: www.TobaccoTradeShow.com


New Image Global Establishes Royal Blunts Flavor Girls

corona, calif. - New Image Global, Inc. has signed some of the hottest and sexiest top models and actresses in the business for its new Royal Blunts “Taste the Flavor” campaign, the company recently stated. The women, representing a variety of unique cultures and backgrounds, have been featured in soap operas, top print ads, film, and television commercials and will be passionately promoting the Royal Blunt product line.

“We want to continue to lead the market with new, exciting ideas and promotions,” stated Stephen Woodson, c.e.o. of New Image Global. “Our Flavor Girls personify the unique flavors and different taste that Royal Blunts continues to offer.” The company will be offereing surprise giveaway DVDs, calendars, and other promotional items to keep its tantalizing “hot flavors” on the top of minds and on the edge of flavoring taste.



SMOKESHOP - October, 2006