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December,
2007

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

General Cigar Acquires Havana Honeys Premium Cigars

Richmond, VA - General Cigar Company, a subsidiary of Swedish Match AB, has acquired the Havana Honeys trademark, premium cigar inventory, and related premium cigar assets of Las Vegas-based Havana Honeys Holdings LLC, a privately-held company that manufactures and markets flavored cigars under the Havana Honeys brand. Terms of the purchase have not been disclosed.

Daniel Nuñez, chief operating officer of General Cigar, said the purchase represents an opportunity for General to “strengthen [its] position within the growing flavored segment of the premium cigar category. The acquisition of such a prominent brand is a great complement to our existing portfolio.”

Under the agreement, General Cigar will assume the production, marketing, and selling activities associated with Havana Honeys’ flavored premium cigars, one of the three business segments under the brand. Joe Gold, founder of 10-year-old Havana Honeys, will retain the marketing and selling activities associated with Havana Honey’s two other business segments: little (filtered) cigars and operation of the Havana Honeys retail outlet at McCarran International Airport in Las Vegas.

“While Havana Honeys is enormously popular, General Cigar has the sales and marketing muscle necessary to bring the brand to new heights,” said Gold. Established in 1997, Havana Honeys is one of the best-selling premium flavored cigar brands in the U.S. Best known for its unique collection of flavor profiles and innovative packaging, Havana Honeys is largely credited with creating the demand for flavored cigars in the premium category.

General Cigar currently markets two other flavored premium cigar brands: Kahlúa Cigars Delicioso by Drew Estate, and the Helix Remix sub-brand.


CAO and Toraño Announce Distribution Agreement

Nashville, TN - CAO, a unit of Henri Wintermans, and family-owned Toraño Cigars have entered into a strategic distribution agreement whereby CAO will become the exclusive U.S. distributor for all Carlos Toraño cigar brands. At the same time, CAO will also become the exclusive distributor for all Dunhill Cigar brands. The agreement will be effective January 2, 2008.

Increased demand for all three brands has fueled the need to expand production capacity and to strengthen distribution channels through enhanced sales and service support. By forming this distribution alliance, Toraño will devote more time to the manufacturing side of the business, whereas, CAO’s sales and marketing division will take over full responsibilities of all brands.

“Toraño and CAO share the same company values,” said Toraño Cigar president Charlie Toraño. “A passion for cigars, consistent quality, innovation, and unparalleled customer service are the bedrock fundamentals that drive both companies.” CAO chairman Gary Hyams added, “The Toraño family has been a wonderful friend of CAO for many years, supervising and managing our cigar operations in Nicar­agua and Honduras. We are all very excited about this new level of partnership which will further bring the companies closer and, in turn, will increase the expansion of all brands involved.

Dunhill Cigars of London had named Toroño it exclusive U.S. distributor earlier this year; under the new arrangement, CAO will also assume distribution of the Dunhill Signed Range.

“My family has been working with the Toraño family since 1994, and we are both passionate about our industry,” said CAO president Tim Ozgener. “Like us, the Toraño family is 100 percent committed to being the best at what we do. As the companies continue to grow, we are determined to focus even more on our strengths to take our products to a whole new level of excellence. This agreement is a big step in that direction.”


DomRey Cigar Awarded Exclusive Distribution of Panter, Mehari’s

Bradenton, FL - Royal Agio Cigars has named DomRey Cigar, Inc. the exclusive distributor of its Panter and Mehari’s dry-cured cigar brands in the United States. DomRey currently distributes the Cuvée, Cusano, and Perfect Cut brands.

A leading European cigar manufacturer founded in 1904 by Jacques Wintermans, Royal Agio Cigars is fully-held and managed by the Wintermans family with headquarters in Duizel, Holland and production facilities in the Dominican Republic and Sri Lanka. Royal Agio products have sales of 800 million cigars in 130 countries and the Panter brand, which was developed in 1932, is a global leader in the small cigar market.

Both companies are committed to delivering a new level of enthusiasm and support in order to grow the Panter and Mehari’s brands in the U.S. Retailers can look forward to an introductory special for all Royal Agio products followed by the launch of the new coffee-flavored Panter Dessert Filter’s. Retailers should contact DomRey Cigar at 800-347-1921 and wholesalers should contact CTS Concepts (a wholly owned subsidiary of DomRey Cigar, Inc.) at 888-347-1923.


Colibri Group Consolidates Operations at New Headquarters

Providence, RI - Following 18 months of planning, the Colibri Group is transferring most of its operations from buildings in Cranston and Providence, R.I. to a single, larger, modernized facility in East Providence. “Centralization will allow us to enjoy better and faster communication between branches of the organization,” says president and c.e.o. Jim Fleet. “For the first time in a decade, our sales, marketing, and service departments will operate out of the same building, working more closely and efficiently.” Manufacturing capabilities will remain in the current location in Providence.

The 35-year-old company, known for years as an innovative, entrepreneurial organization, was sold to a group of private equity firms in 2005 and set its sites on growing The Colibri Group into a “global, branded-consumer-products company,” says Fleet. The company continues to focus on its heritage as a brand leader in men’s and women’s jewelry, accessories, and clocks and has made “significant investments” in 2007 including a new business-to-business e-commerce web site to “secure its commitment to bringing first-class service to retail partners on a 24/7 basis.”

The new facility includes a larger distribution center. “This increase in capacity will allow us to better and more quickly respond to the needs of our national chain accounts, without any sacrifice to the thousands of independent retailers we serve each day,” says Fleet.


European Commission Approves Proposed Imperial Tobacco Acquisition of Altadis S.A.

Brussels - The European Commission on October 18 announced its decision to approve Imperial Tobacco Group PLC’s proposed acquisition of Altadis, S.A. Gareth Davis, Imperial’s chief executive, said, “We are pleased that the European Commission has approved our proposed acquisition of Altadis, subject to the enlarged group divesting a small number of fine cut tobacco, pipe tobacco, and cigar brands in certain European markets. We always anticipated some divestments and, in the context of the overall combined portfolios, these will not materially adversely affect the operational and financial performance of the enlarged group.”

Imperial Tobacco anticipates receiving approval of its proposed offer of 50 euros for each Altadis share from the Comisión Nacional del Mercado de Valores (CNMV), the Spanish Securities and Exchange Commission, soon. The offer acceptance period begins after the CNMV’s approval is received.


General Tobacco and Premier Manufacturing Settle ‘Wildhorse’ Trademark Dispute

Miami, FL - General Tobacco, the Miami-based producer of GT One, Bronco, Silver, and 32 Degrees cigarettes and Vaquero little cigars, has resolved a trademark dispute against Premier Manufacturing. General Tobacco had won a preliminary injunction in a Kentucky federal court preventing Premier’s use of its current Wildhorse cigarette packaging. The injunction, which was to become effective upon General Tobacco’s posting of a substantial bond, will now be held in abeyance pending the completion of the terms of the settlement between General Tobacco and Premier.

“General Tobacco has spent a considerable amount of time and money establishing our Bronco and Silver brands in the market as high quality products sold at a discount price,” said General Tobacco founder and president Vidal Suriel. “The horse on our packaging signifies the strength and quality of our product and has become associated with many of our products by consumers.”

In his ruling, the judge found that the Bronco brand is a strong and well-established cigarette brand in the market and the horse logo and associated trade dress have an established identity with the brand.


Green Light for Imperial Tobacco’s MSA Bid

Bristol, England - Imperial Tobacco Group PLC has received confirmation from the National Association of Attorneys General that its application to join the Master Settlement Agreement as a Participating Manufacturer has been approved.

“We need to complete a formal brand registration process before launching any new Imperial Tobacco brands in the USA,” explained Gareth Davis, chief executive. “This process should be concluded in the coming weeks.”

Following its acquisition of Commonwealth Brands, the fourth largest cigarette company in the USA, in April 2007 Imperial Tobacco has a strong presence in this market, with a cigarette share of 3.7 percent of the total market and 13.4 percent of the discount sector.

Key brands USA Gold and Sonoma are the third and sixth best-selling brands in the discount sector, with respective shares of 8.2 percent and 4.8 percent. Following the acquisition of the U.S. trademarks of Bali Shag and McClintock fine cut tobaccos in July 2007, Imperial Tobacco also has around 1 percent of the fine cut tobacco market to complement its established rolling papers and filter tubes business in the U.S.



SMOKESHOP - December, 2007