The March East

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			The March East Manuel Garcia has arrived in Moscow, though the name will probably not mean much to the majority of cigar smokers. And yet this is the man to whom Russian devotees of Havanas are obliged for the fact that they can enjoy an unlimited supply of Cuban cigars. Manuel Garcia is No. 2 in Habanos S.A., which is the exclusive supplier of Havana cigars throughout the world. And you must agree, it’s not every day that the vice-president of Habanos S.A. comes to Russia. Señor Garcia, is Russia such a promising market for Habanos S.A. that it requires a high-ranking company director like yourself to come out here in person? It is indeed. And to judge by what I’ve seen here, Cuban cigars have a big future in the Russian market. I think our sales here could easily be doubled or even trebled. And that’s a pleasant prospect for us, and it also means that Moscow will have priority in supplies of Havanas. So now you’ve got the European market, you’re taking a closer look at other markets a bit further afield? We are indeed in a strong position in Western Europe. So today, we’re doing what we can to get into areas that are not our traditional markets – like the Middle East and the Far East, where there is enormous potential. And, of course, we must not exclude Eastern Europe. To supply everyone with Havanas, wouldn’t you have to increase production? Of course. We expect that this rise will amount to 5-6% in 2005. Furthermore, sales of Cuban cigars are continually on the increase, reaching $300 million in 2004. In comparison with the $250 million in 2003, this is an impressive amount. But this is a net increase of twenty percent, not five percent. Are Havanas getting more expensive? The point is that the company’s current policy is to cut back on machine-rolled cigars, and increase the numbers of premium cigars and limited series cigars which, naturally, cost more. Hence our increase in earnings. At present on the world (with the exception of the United States) market, Cuban cigars account for 70% of sales in terms of quantity and 80% in terms of volume. But if you include the US market, where Havanas are not currently sold, then Cuban cigars account for 30% of the world market in terms of quantity and 40% in terms of volume. The total world market in premium cigars – including the United States – we estimate to be between $350 and $400 million a year. Is Cuba getting ready for a possible repeal of the American embargo? Revoking the embargo against Cuba does not depend on us; but we do have all the necessary resources for increasing cigar production so as to be in a position to saturate the American market. We are currently producing some 400 million cigars a year, a hundred million of which are exported, while the rest stay on the domestic market. Imagine a country with a population of 11.3 million consuming three times as many Havanas as all the other countries of the world put together. Of course, these cigars are not of the same quality as those that are exported, and many are made from machine-cut tobacco. Do you think that sort of quality will suit the Americans? I repeat: Cuba has all the resources necessary to increase the production of premium cigars for the American market. There are plantations in the province of Pinar del Rio that are currently sown with other crops, but which could easily be turned over to tobacco, and there are plantations in other regions, which could be reoriented to produce high-quality cigar tobacco. What about the workers? Workers at our factories today only do a single eight-hour shift. If necessary, we can change over to three shifts. And within a year we can train the necessary number of rollers – many have learned this skill in their families for generations. So a repeal of the embargo will not catch you off guard? Cuba is ready. We follow developments in the cigar market very carefully and try to take account of them. What innovations can we expect? This year we’re celebrating the 160th Anniversary of the Partagas brand. For this purpose, we’ve produced two new cigars: Partagas Serie D No. 2 and Partagas Serie D No. 4 Reserva (aged a minimum of three years). They will be sold in black, lacquered boxes. What about the Ediсiõn Limitаdа? You’ve not forgotten that? This year there will be three limited edition series: Montecristo D (in a box of the 8-9-8 type), Romeo y Julieta Petit Piramide (a little less than the Belicoso), and H. Upmann Magnum 50 (a robusto type, but fatter than the current cigar in the regular Magnum 46 line). How is the world anti-tobacco campaign affecting the sales of Cuban cigars? We’re moving ahead despite the situation. Of course, the restrictions are having an effect on the consumption of cigars, particularly in those countries where smoking in restaurants is banned, like Ireland, Italy, Singapore and Australia. This is breaking down the old traditions – I mean, lots of people like to smoke a cigar after a meal, and in some restaurants dinner would often begin with a cigar. That’s impossible today. But the cigar clubs that are fashionable in Europe are doing much to save the situation. And the La Casa del Habano shops – of which there are already ninety in the world – are another island of ‘freedom’. The anti-tobacco campaign has even reached Cuba. Why is it necessary to impose such restrictions in a country where smoking has been a tradition? After all, many people come to the Island of Freedom just in order to enjoy good cigars. Cuba is a country where smoking has been traditional, but the government and Fidel Castro personally are concerned about the health of the population. Fidel used to smoke a lot himself, but he set everyone an example, when he gave up the habit. And for this he was given an award by the World Health Organization. And since Cuba has signed the WHO Framework Convention on Tobacco Control, our laws should conform to it. We were expecting restrictions, but not such strict ones. Now, smoking is banned in public places (restaurants and bars), in sports establishments and in offices. Hotels still have special rooms for smokers, but they’ll soon be banned. Now, you can only smoke in the street or at home. What about in the offices of Habanos S.A.? Smoking is banned. It’s even banned at the tobacco factories. We’re holding talks with the government on making certain concessions, like allowing smoking in all the premises of the Tabacuba Group including our factories and offices, and in having specialist cigar shops and places in restaurants set aside for smokers. We’re optimistic about the talks, and the government has already made its first concession: despite the fact that the law banning smoking came into force at the beginning of February – just before the Cigar Festival – smoking was permitted in all places where the festival was held. This included hotels, restaurants and the offices of Habanos S.A. And we hope that subsequent talks will produce a positive result. We don’t expect the government to change its mind, but we think there could well be compromises. And is compromise possible in the case of the ownership of the Cohiba brand? I don’t think so. Recently we won our case against the General Cigar Company, which produced cigars under the Cohiba brand name in the Dominican Republic. Our opponents requested an appeal, and their request was granted. Now we’ve taken the case to the US Supreme Court. Our case is a just one. The rights of the Cohiba brand name belong to Cuba, and we will stand up for them.