logo
















logo

logo

logo

logo

logo

logo
December
2003

TOBACCO INDUSTRY NEWS

Nuestra to Distribute Toraņo Brands in Canada

Vancouver - Nuestra Familia Cigar Co. Ltd. (NFCC) has partnered with Toraņo Cigars to import and distribute the Toraņo brand in Canada. NFCC is based in the Vancouver area. Distribution began to roll out regionally across the country from west to east beginning in November.

"The Toraņo brand has clearly generated a strong, loyal following in the past few years as a result of the extremely high ratings it has received in cigar publications, and we are positioned to deliver the value of this brand to the cigar connoisseurs of Canada," said Tom Orange, president, NFCC. Orange believes the Toraņo brands will be an ideal match for Canadian consumers searching for a more consistent, super-premium product at an attractive price

"We intend to be very active in the cigar industry in the years ahead, and the Toraņo line compliments our wholesale-retail integrated business strategy nicely," said Orange.

NFCC has almost finished construction on a new modern-concept store called Robusto which will feature the Toraņo brand extensively. Toraņo cigars will have a dedicated, exclusive walk-in humidor at the store that will feature all of its brands and sizes. In addition, a fully-equipped coffee bar will feature suggested Toraņo cigar pairings with each estate-grown coffee, mostly of Central American origin.

"To put it bluntly, we are creating a complete 'Toraņo Experience' at the store, and we will strive to convert all cigar smokers to Toraņo customers," said Elton Walker, vice president of NFCC, adding, "Robusto is a concept that combines old-world cigar culture with modern design and technology, making it truly a lifestyle store.


RJR, B.A.T. to Merge U.S. Operations

Winston-Salem - R.J. Reynolds Tobacco Holdings Inc. has agreed to merge its U.S. tobacco operations with those of British American Tobacco PLC's to better compete with the market leader Philip Morris USA.

The deal, valued at approximately $3 billion, will free B.A.T. from its litigation liabilities in the U.S. The new company, Reynolds American Inc., would merge R.J. Reynolds Tobacco Co. and Brown & Williamson, currently number two and number three players in the U.S. market. The new entity would hold more than 30% of the U.S. cigarette market with annual revenues of about $10 billion.

"Given the competitive landscape in the U.S., it has been extremely difficult for both RJR and B&W to compete against Philip Morris," said Smith Barney analyst Bonnie Herzog in a research note. The new company's greater size should allow it to capture more attractive retail space.

The new, publicly-traded company will center its operations in North Carolina. The merger will reduce costs by more than $500 million annually, on top of the $800 million RJR expects from the restructuring it announced on Sept. 17. "We expected to create about 800 jobs in Winston-Salem," said Tommy Payne, RJR's executive vice president for external relations, "and clear preference for those jobs would go to the current Brown & Williamson employees."

Herzog said the two tobacco operations should be complementary. B&W has been missing a leading "core" brand for its business and RJR will provide one, she said. Philip Morris USA holds 50% of the domestic cigarette market with premium brands that include Marlboro, Parliament, and Virginia Slims.

The companies are confident the deal will pass strict anti-trust rules and do not anticipate having to divest brands. They expect the deal to be complete in mid-2004.


North Atlantic Trading Company Acquires Stoker, Inc. for $22.5 Million

New York - North Atlantic Trading Company, Inc. has purchased all of the outstanding shares of Dresden, Tennessee-based tobacco maker Stoker, Inc. for $22.5 million, subject to certain post-closing adjustments.

Stoker, a family-owned business established in 1940 by Fred Stoker, manufactures looseleaf chews, moist and dry snuffs, plug and twist tobaccos and smoking tobaccos. It also produces the Fred Stoker & Sons direct mail catalog and operates a wholesale distribution division, RBJ Sales.

"The Stoker business, with its strength in both the value-oriented chewing tobacco and make-your-own (MYO) tobacco segments, is a perfect complement to our own premium and value brands in these segments," said Thomas F. Helms, Jr., chairman and c.e.o. of North Atlantic Trading Company. "Given the intense price competition in the tobacco industry today and the growing popularity of value-oriented tobacco products among adult consumers, the acquisition of Stoker's brands provides an opportunity to increase market share in these strategically important segments of our business."

Helms said that the acquisition would create opportunities for improved manufacturing and distribution efficiencies, and gives the company a strong position in the popular 16 ounce value-oriented bag category.

"Over the last three years, we have successfully responded and grown to meet consumer demand with our Zig-Zag MYO tobacco products," Helms added. "While the Zig-Zag MYO tobacco products continue to exhibit strong growth, we also recognize that many adult consumers are price-sensitive and seek value-oriented MYO products. Stoker's tobacco products provide us with important brands through which we can reach more of these price-sensitive adult consumers, who continue to switch from manufactured cigarettes."


Flor del Cielo: Lost World of Ybor's Cuban Immigrants

A family-owned cigar factory in Ybor City, circa 1929, is the setting of the first Latino-themed drama to reach Broadway in 15 years. Anna in the Tropics, a play written by Cuban-American writer Nilo Cruz and the winner of the 2003 Pulitzer Prize for drama, is a story of forbidden love and the power of literature.

In the play's subsequent Broadway debut in November, former L.A. Law and NYPD Blue star (and avid cigar enthusiast) Jimmy Smits plays the central character, a newly-arrived Cuban lector who reads Tolstoy's "Anna Karenina" to the cigar factory workers, foreshadowing his own future of love and tragedy. The story tells of a "fading era, where neither passion nor prideful craft labor can survive the arrival of modern technology and changing social norms." Cruz left his native Matanzas, Cuba for Miami in 1970 on a Freedom Flight with his family when he was nine. "I love the notion of illiterate cigar rollers quoting Don Quixote and Shakespearian sonnets by heart," Cruz told Hispanic Magazine Online. The playwright spent six months researching cigar-making traditions at Miami's Cuban Heritage Collection, accounting for the authentic feel of the play and its characters.


Hacker Smokes Out NBC-TV Western

Pipe and cigar author Richard Carleton Hacker can be seen as a gunslinger Pinkerton agent in the final hour of the new NBC-TV movie, "The Legend of Butch Cassidy & The Sundance Kid," scheduled to air in January. Hacker, who serves as historical consultant and script doctor for many Hollywood movies, was asked to be an "extra" in the upcoming television western, which he had worked on.

Hacker, who is shown above on the the set in between takes, can be seen in the final scenes of the movie in a shoot-out with Mexican Federales.

"Unfortunately," said Hacker, "the director wouldn't let me smoke my vintage 1890 briar on camera, because he rightfully acknowledged, 'bad guys don't smoke pipes.' I get killed and I'm the only 'body' lying in the the street wearing a badge, but without my pipe." Check local listings for broadcast details.


Four Million Zippos and Counting

George Duke, third generation owner of Zippo Manufacturing Company, holds two milestone lighters in the company's 71-year history: The original 1933 Zippo Windproof Pocket Lighter (on left), and lighter number 400MM - a deep carved, high polish Armor lighter - which was produced at 8:15 A.M. on September 3, 2003 at the company's sole manufacturing facility for windproof lighters in Bradford, Pennsylvania. The lighter will be on permanent display in the company's museum in the Zippo/ Case Visitors Center.


Continued on next page...