Sales of famed Cuban Habanos cigars down

Among the reasons for the drop in sales was the enforcement of a ban on smoking in public areas in such markets as France, Germany and the United Arab Emirates.
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Updated on Feb 26, 2009 09:44 PM IST
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None | ByEFE, Havana

Habanos S.A., makers of the famed Montecristo, Cohiba and Partagas brands of Cuban cigars, had sales of some $390 million in 2008, down three percent from last year, a company official has said.

The company's vice president of marketing, Manuel Garcia, announced the results at a press conference. He said the decline in sales did not significantly affect the profitability of Habanos, a joint venture of the Cuban government and the Franco-Spanish firm Altadis.

Garcia said that among the reasons for the drop in sales was the enforcement of a ban on smoking in public areas in such markets as France, Germany and the United Arab Emirates, and the effects of the global financial crisis in the second half of 2008.

There was also a reduction of more than 11 percent in the number of passengers making international trips, which brought with it a drop in sales at duty-free shops where 24 percent of the company's production was sold in 2008, Garcia said.

"We think this year is going to be very difficult, given that in 2008 we saw a financial crisis and this year we'll see a consumer crisis," the executive said, adding that Habanos expects to maintain "more or less" the value of last year's sales.

As to the effect of last year's devastating hurricanes on the western province of Pinar del Rio where the island's most famous tobacco comes from, Garcia said that "luckily they didn't damage the harvest" and "we still have enough raw material to satisfy the demand for cigars".

Asked about the possibility that the new US government might ease Washington's trade embargo on Cuba so that Habanos can sell in that country, Garcia said that the company's executives have "much worse problems to deal with in the world".

Even so, he acknowledged that entry into the US market "would open great possibilities" for Cuban cigars.

He said that "although that market suffered a double-digit contraction in 2008, it continues to be the most important in the world for premium cigars".

The 11th Havana Cigar Festival began here with the sophistication that characterises the annual meeting of businessmen, epicures and tobacco experts, an oasis of luxury in a country immersed in chronic economic hardship.

The hundreds of visitors savoured combinations of cigars and liquors, attended talks on the "hand-twisted", taste the cuisine and rum of Cuba and visit tobacco factories and plantations in Pinar del Rio, said Habanos S.A. executives.

The trade fair parallel to the festival will show until Friday personalised cigar cases, humidors of all sizes and prices, collectable cigar bands and limited editions of the cigar brands marketed by Habanos.

Years ago Cuban leader Fidel Castro attended the festivals, being an insatiable cigar smoker at the time, after which he became fervently anti-tobacco. Since July 2006 he has not appeared in public due to the illness that forced him to cede power to his younger brother Raul.

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