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A collection of Habanos cigars from Cuba (Photo courtesy of Habanos SA)

Close … but still Cuban cigars

A collection of Habanos cigars from Cuba (Photo courtesy of Habanos SA)

“I reached the conclusion long ago that the one last sacrifice I must make for public health is to stop smoking,” late Cuban president Fidel Castro said in 1985. “I haven’t really missed it that much.”

Fidel Castro smoking a Cuban cigar. (Photo: David Hume Kennerly | Getty Images)

Castro did give up cigars a year later, long after the US Central Intelligence Agency failed to use his habit to assassinate him with an exploding cigar.

Castro died of natural causes in 2016, but despite his relatively early move to point to the dangers of smoking to human health, and increasing global pressure on the habit, Cuba’s iconic cigar industry has been gaining lost ground.

The island’s cigar exports have suffered for many years from the loss of its major market in the US — a victim of Washington’s economic embargo imposed in 1962 by President John F Kennedy.

In this February 27, 2018 photo, tobacco picker Jorge Luis Leon Becerra poses with his oxen and a handful of freshly harvested tobacco leaves, at the Martinez tobacco farm in Cuba’s western province of Pinar del Rio. The newly collected leaves will be taken to a drying house where women will hang them for their first drying. (Photo: AP/Ramon Espinosa)

But global sales that had been rising slowly because of new markets were four per cent down last year on 2019, State tobacco monopoly Habanos said.

The setback was a consequence of the coronavirus pandemic, but exports brought the country US$507 million in earnings for the year, Habanos said.

The pandemic and the US embargo caused Cuba’s economy to contract by 11 per cent last year, the Government said.

(Photo: Borgen Magazine)

Cigars remained a major export for Cuba as the pandemic and the US sanctions suppressed tourism and nickel exports.

“Twenty twenty was a challenging year not just for our business but for the whole of humanity,” Habanos said.

Finding new markets

Cuba has been slowly building new cigar markets in Europe and Asia.

China overtook Spain last year to become the biggest market for Cuban cigars, Habanos reported.

Exports to China grew five per cent last year over 2019, continuing an expansion that saw the market growing by 50 per cent since 2015, said Habanos’ Commercial Vice-President Leopoldo Cintra Gonzalez.

Habanos’ Commercial Vice-President Leopoldo Cintra Gonzalez (Photo: Escambray)

Habanos started to exploit the Chinese market in 2017 through an agreement with state-owned China National Tobacco, with the Cuban agency saying the Asian country “is the biggest emerging market with a potential for growth that is already materializing year after year.”

Despite the growth in China, Europe remains the main destination of Cuban cigar exports, accounting for 60 per cent.

Not there yet

Cuban tobacco that is used in its hand-rolled and pricey cigars is grown mainly in Pinar del Rio province on the western tip of Cuba where there is a “unique” combination of soil and climatic factors, Habanos said.

“The US is a natural market, not only because it is close, but also there remains a strong culture of cigar smoking, and Cuban brands remain iconic with demand being unsatisfactorily met by a trickle of smuggled labels”

Cuban cigars have also been a target for multinational businesses. UK tobacco firm Imperial Brands in 2008 acquired Cuban brands such as the iconic Cohiba and Romeo y Julieta, when it bought Spanish tobacco group Altadis for just under US$20 billion.

Imperial Brands in 2020 sold the international business of its subsidiary Premium Cigar to private investment firm  Allied Cigar. The transaction includes 50 per cent of Habanos exports.

But Habanos still hopes to get access to the US market.

“The US is a natural market, not only because it is close, but also there remains a strong culture of cigar smoking, and Cuban brands remain iconic with demand being unsatisfactorily met by a trickle of smuggled labels,” Habanos said.

US president Barrack Obama’s Administration reversed the ban on Cuban cigar imports in 2016, but it was reimposed in 2020 by his successor Donald Trump.

Former US President Barack Obama’s (left) Administration lifted the ban on Cuban cigars, only for his successor, Donald Trump, to rescind the ban. Current US President Joseph Biden (right) will consider lifting aspects of the embargo on Cuba. (File photo)

While campaigning for the US presidency, Joe Biden indicated he could relax aspects of the embargo.

“We are eager to see what he really does as the US market is hungry for our product,” Habanos said.