What will happen if and when...

[malba2366]

A question for discussion.

What will happen when the us legalizes trade with Cuba:

1. Prices of CCs will skyrocket

2. Habanos SA will push out tons of product at tr price of quality

3. A little bit of both

[El Presidente]

A question for discussion.

What will happen when the us legalizes trade with Cuba:

1. Prices of CCs will skyrocket

2. Habanos SA will push out tons of product at tr price of quality

3. A little bit of both

Yes to point 1. Stock quantities for the rest of the world will be reduced. There is the US Trademark issues of course but if it gets too hard new brands will be launched. Still, quality tobacco is a finite resource.

Not sure about point 2. I suspect they learn't their lesson in 98/99. Far easier to increase pricing while slowly increasing production.

[marper331]

I will probably have to give up cohiba and trinis for quinteros once the Feds figure out they can tax the crap out of them.

[shlomo]

The US gov't legalizing trade with Cuba would be the worst thing to happen to American Cuban cigar smokers possible. You guys have it golden the way it is right now.

As for others such as Cuban citizens, ex-pats, the rest of the world....some good, some bad.

[dogdays]

it will never happen. not in my life time .

[Habana Mike]

Not never happen? So it will?

[armmmmm]

it will not never happen. not in my life time .

I see what you did there.

[dogdays]

LOL , Sorry guy's.

[dogdays]

Not never happen? So it will?

Thanks mike I did not see that .

[Habana Mike]

All good, I knew what you meant

[polarbear]

Prices will go up for all countries and Americans will be paying more for CC's than they currently do as they will be taxed like the rest of NC cigars
More limited production vitolas will be even harder to find
Quslity will drop (if only for a short time)
The big ring guage trend in the CC industry will get worse
More limited editions and special releases will hit the market due to the American Cigar smoker always asking "whats new"
The most of the smaller NC manufactures will either have to activly explore other markets or shut up shop

That being said, if the FDA have their way HSA may decide that the hoops they need to jump through in order to bring a cigar to the US market might be more trouble than its worth...

[bigfunkyg]

I have pondered point one many times. While I agree that prices will go up and he US market represents a sizeable opportunity for HSA there is something to be said about the supply and demand curve. Do prices double? I would say no but that depends on their ability to scale up production. They have been scaling down production for years and labour should be plentiful but skilled workers could be an issue which would likely see a decrease in quality at least initially.

[TiminBC]

The act of privatizing land and companies including tobacco is a mess that will take many years to sort out even if the embargo is dropped. Part of the problem with the embargo is it has gone on so long and even today the US and Cuba posture but make no inroads to a solution. I would worry more about Venezuela stopping subsidizing oil for Cuba. Think about the qualities issues when The USSR ended.

The fake market would increase to epic proportions. Initially prices would rise and quality would diminish but things would find a balance after awhile.

All this is F.U.D. which is fear , uncertainty and doubt. My advise is do not worry and in the meantime stock your humidors just in case :} If it all comes to pass you will have stock to ride out the 'post embargo period' and if nothing happens you will have terrific aged stock to enjoy. Win win.

The real threat to our enjoyment is government taxes and supervision.

[Goodo]

I have wondered about this myself and think there are a few things to consider:

1. A lot of Americans are already getting cubans from online stores (eg variouis swiss vendors) sending them in without bands etc

2. Americans don't like paying much for their cigars. I'm writing from Australia, where we pay a fortune, but time and time again see Americans online complaining about much cheaper prices being too much

3. I'm not sure that all Americans will prefer Cubans. I have smoked my way through most of last year's CA top 25 (only three cubans on the list), and didn't get over excited, which could be because I've grown up with Cubans, which have a very different flavour profile. I wonder if the American smokers who have grown up on the non-cubans will be the same with Cubans?

3. The Chinese - has the cigar market there taken off as much as the premium wine market has? I would imagine that it has to some degree and we haven't seen a huge price rise as a result.

I guess these are all arguments against a huge increase in demand, at least after the inital novelty phase. Having said that, I would be putting my money on some permanent increase in price

[Goodo]

various

[canucks6024]

@Goodo

Ran into a wine importer based out of China last month while I was in France. We got to visit Chateauneuf du Pape

In her words, " we are working on training the Chinese palate"

I would agree with her assessment with regards to wine and cigars in general. Too much of the demand in China is still driven by brand and prestigious.

If you ask about wine names and brands, many times you will find difficulty after Lafite.

[Laynard]

A question for discussion.

What will happen when the us legalizes trade with Cuba:

1. Prices of CCs will skyrocket

2. Habanos SA will push out tons of product at tr price of quality

3. A little bit of both

Yes.

[Goodo]

@Goodo

Ran into a wine importer based out of China last month while I was in France. We got to visit Chateauneuf du Pape

In her words, " we are working on training the Chinese palate"

I would agree with her assessment with regards to wine and cigars in general. Too much of the demand in China is still driven by brand and prestigious.

If you ask about wine names and brands, many times you will find difficulty after Lafite.

That would have been an interesting conversation. Even better to visit a great wine area - Cheers!

[armmmmm]

A question for discussion.

What will happen when the us legalizes trade with Cuba:

1. Prices of CCs will skyrocket

2. Habanos SA will push out tons of product at tr price of quality

3. A little bit of both

1. I think initially the prices will rise. I think the main driver of this would be the non-regular smokers wanting to try the "taboo" cigar. I also think that the fake cubans will equally flood the US.

2. I've heard rumors that Cuba in anticipation of the Embargo being lifted has been stocking up...I think this is just empty rumors especially since weve seen the dwindling of regular production stock and crop issues.

3. I think this is the most realistic, both will happen, hopefully it will be temporary.

If the embargo was lifted, I think it would initially devastate the NC market. However, there are too manyAmericans that really love their huge RG and hardcore nicotine kicks.

[laficion]

"The Embargo Ending", That'll be the day ,LOL ,LOL. But, Well, If we were to dream , The Cuban Cigar would be hard to find In the

frist times , (at least). Europe will be deprived of Cuban Cigars for the frist year or so, Most of the smaller N.C. makers, will go out of business In the frist years.There would be a big fight over who will distribute all Habanos In the U.S.A... After the

frist fasination of the ,"Forbidden Fruit",Not many Americans will smoke and enjoy a real Cuban Cigar.Aside from that, all will be fine & dandy.

Guy

[garbandz]

Also, the US market will be flooded with fakes. Imagine how easily the fakers will be able to deliver boxes to shops from car trunks, and the huge demand there will be for these fakes.

The availability of legit Cubans will be a real problem because there are contracts with distributors to be honored.

Even if all of the current distributors were to give up 10% of their allotments, this would be a drop in the bucket toward satisfying the US demand.

[tjohn7]

I've pondered this topic many a night. The capitalist in me sees prices dramatically rising in the short term due to rapid increase in demand. I could see NC distributors reducing prices to make their smokes much more affordable and thus creating the image of the NC as your "everyday" smoke. Obviously a number of NC makers would resist this movement, as they already view themselves in direct competition to anything HSA puts out. But I could certainly see a stratification of brands similar to what we already see here in the US, but further amplified by the introduction of CCs to the open market.

Like Rob noted above, there is only a finite quantity of quality tobacco, but I wonder if Americans were able to have a say in distribution if there would be increased methods of quality control and improved standardization of production. This would theoretically reduce the variability noted among CCs and serve to satisfy consumers worldwide.

I also agree that most Americans smoke CCs for either the excitement related to obtaining contraband, or because of the perception that it is superior/a symbol of status. After CCs being readily available, I doubt most Americans would try a Cuban over a NC if they have no prior background on the topic. Price would likely be the largest determinant.

For reference, I live in one of the most affluent areas in Michigan, USA. When I frequent the cigar bars we have, I will still see businessmen, physicians and the like browse the humidor and their first question is, "what is the price of this cigar?" Not to say that is everyone's primary concern, but if I see that here, I imagine that in many spots throughout the US people are asking the same question.

Tom

[Cmontoya79]

Honestly, I think those Americans who want real Cubans already buy them. I wouldn't think there to be a huge increase in demand that would be long term. I foresee a spike for 3-6 months then the novelty wears off and the market normalizes. According to Habanos VP in 2010 estimated about $20 million dollars in Habanos sold to Americans. Referenced here:

http://robustojoe.com/tobacco/cigars/reference/cuban-cigars/

Sent from my iPhone using Tapatalk

[Cmontoya79]

Honestly, I think those Americans who want real Cubans already buy them. I wouldn't think there to be a huge increase in demand that would be long term. I foresee a spike for 3-6 months then the novelty wears off and the market normalizes. According to Habanos VP in 2010 estimated about $20 million dollars in Habanos sold to Americans. Referenced here:

http://robustojoe.com/tobacco/cigars/reference/cuban-cigars/

Sent from my iPhone using Tapatalk

[Rushman]

The US gov't legalizing trade with Cuba would be the worst thing to happen to American Cuban cigar smokers possible. You guys have it golden the way it is right now.

As for others such as Cuban citizens, ex-pats, the rest of the world....some good, some bad.

You hit the nail on the head my friend. Rest of world will see some price/supply negative market conditions. The average US cuban cigar smoker will feel like they were just penetrated by some blingy 70 ring gauge NC.

The real question is this......for the average US consumer that buys through online sources, FOH or otherwise - how much do you think you would buy at the B&M vs online?

Assuming trade opens tomorrow, how long until you have a LCDH on main street USA?