Archive | Commentary RSS feed for this section

Commentary: How Will Castro’s Death Impact Cigars?

28 Nov 2016

fidel

By now you most assuredly know that Fidel Castro—the communist revolutionary who overthrew Cuban President Fulgencio Batista via guerrilla warfare in 1959 and ruled the island nation as a totalitarian dictator until 2006, when he installed his brother at the helm—died on Friday, November 25. He was 90 years old.

Castro’s legacy will be a complicated one. The myriad narratives will be shaped by the biases of the authors who document his life, and by the millions of people who will either mourn or celebrate his demise. These threads of opinion will not abide national boundaries, either; consider that, even among Cubans themselves, there will be those who benefited from Castro’s socialist state, while others did not fare so well.

Those who lost their businesses, land, homes, and even family members will not remember El Presidente fondly. I don’t need to remind you that human rights violations were—and still are—not uncommon under the Castro regime. Consider the following summary of Fidel’s time in power, courtesy of the Washington Post: “It began with mass summary executions of Batista officials and soon progressed to internment of thousands of gay men and lesbians; systematic, block-by-block surveillance of the entire citizenry; repeated purges, complete with show trials and executions, of the ruling party; and punishment for dissident artists, writers, and journalists. Mr. Castro’s regime learned from the totalitarian patron he chose to offset the U.S. adversary—the Soviet Union, whose offensive nuclear missiles he welcomed, bringing the world to the brink of armageddon. Mr. Castro sponsored violent subversive movements in half a dozen Latin American countries and even in his dotage helped steer Venezuela to economic and political catastrophe through his patronage of Hugo Chávez.”

I have my own biases about Fidel Castro. While I do not harbor any personal connection to Cuba, I believe humans flourish in free societies, and the proper role of government is to be limited in power and scope, enabling individuals and businesses to interact with one another on voluntary terms. Cuba lies but 90 miles from America’s shores, yet it serves as a tragic example of the impacts of a politically and economically overarching government. You will not count me among those mourning Castro.

My opinion of the late dictator hardly matters, though. If you’re reading this, you might be wondering what Castro’s death means for your future ability to acquire Cuban cigars—or, perhaps more interestingly, if this event will somehow expedite the ability of non-Cuban cigar makers to start including Cuban tobacco in their blends (assuming this isn’t already happening under-the-radar). Crass as it may seem to think of cigars at a time like this, StogieGuys.com is, after all, a cigar website.

On one hand, perhaps not much will change. Fidel Castro hasn’t been officially running the country for a decade (his brother, Raúl Castro, was appointed presidential powers in 2006). And even though Congress is unlikely to change its tune on the longstanding embargo, recall that President Obama—via executive order—has made it legal to bring back cigars purchased in Cuba or elsewhere, as long as the cigars are for personal consumption. This was the latest step in the gradual progress of diplomatic normalization that also included the reestablishment of embassies in Havana and Washington.

That said, President-elect Trump made promises to reverse the wheels Obama set in motion. “The death of Fidel Castro is putting unexpected pressure on [Trump] to follow through on earlier promises,” reports the Wall Street Journal. “Mr. Trump’s top aides said Sunday that he would demand the release of political prisoners held in Cuba and push the government to allow more religious and economic freedoms. Reince Priebus, Mr. Trump’s incoming White House chief of staff, said the president-elect ‘absolutely’ would reverse Mr. Obama’s policies if he didn’t get what he wanted from Cuba.” Still, Trump “could face pushback from U.S. companies now deeply invested in Cuba under the current administration’s policy. Those companies include major airlines, hotel operators, and technology providers, while big U.S. phone carriers have signed roaming agreements on the island.”

Time will tell how the new administration in Washington reacts to the various competing interests related to Cuba. There are plenty of issues and conflicts at play, and cigars are unlikely to be top of the agenda. For now, what seems certain is that the people of Cuba will continue to live under a regime whose main business is the promulgation of extreme political and economic repression. There was a one-party, socialist state during Fidel Castro’s reign; there is a one-party, socialist state with his brother at the helm; and, barring a new revolution, there will likely be a one-party, socialist state long after the 85-year-old Raúl Castro is gone.

Patrick A

 

photo credit: Flickr

Commentary: The Smoky Calm After the Storm — A Post-Election Dinner with PG Cigars at Morton’s Steakhouse

16 Nov 2016

pg-mortons

National elections are always a big deal in Washington, where politics is the largest “industry.” It is safe to say this latest presidential election, however, was watched with even more interest with emotions stronger than usual on both sides.

In that context, I was particularly excited when I found out about plans for a cigar dinner the night after the election (November 9) organized by Paul Garmirian Cigars, which has its headquarters inside the Beltway in nearby McLean, Virginia. The dinner was fittingly hosted by Morton’s The Steakhouse at the downtown location just blocks from the White House.

The event was the first seated PG dinner hosted in Washington in a decade, which isn’t a coincidence since the city’s smoking ban went into effect in 2007. Fortunately, Morton’s has a covered balcony which, no matter the weather (it can be enclosed and heated), is without a doubt one of the best places in the city to enjoy a cigar with a fine meal.

Fittingly, the dinner was neither a celebration of the previous night’s election results nor a consolation. Except for a handful of walk-ins, most of the nearly 50 guests had made plans to attend long before the election was settled early that morning.

Over four courses of excellent food, drink, and four PG cigars, guests bonded over their shared enjoyment of fine cigars and food. Politics came up, of course, as not discussing the biggest news of the day wasn’t an option. But the conversation was never heated nor angry.

Cigar smokers can attest that when you’re enjoying a cigar at your local cigar shop, you tend to run into a diverse group. In the chair next to you could be a retiree, a lawyer, a college student, a small business owner, etc.

The same dynamic made the PG dinner so enjoyable, especially after an exhausting, seemingly never-ending, highly contentious election. Does this mean cats and dogs are at peace, and Democrats and Republicans now agree on politics?

Hardly. Especially when you consider that as we lit our PG 15th Anniversary Belicoso Extras, protesters were lighting candles a few blocks away as part of their vigil in front of the White House. Still, it does remind you that cigars have the unique ability to create camaraderie that otherwise wouldn’t exist.

As the night wrapped up, the question on everyone’s mind was when would Morton’s and PG hold their next dinner. Hopefully soon. Anytime people can put their politics and agendas aside for an evening and come together over premium cigars, it is worth celebrating.

Patrick S

photo credit: PG Cigars

Commentary: Obama No Friend of Cigars

17 Oct 2016

untitled

On Friday, the Obama administration lifted restrictions barring Americans traveling abroad from bringing back Cuban cigars and rum—another step towards further normalizing relations between Washington and Havana.

Since December 2014, American citizens who were officially licensed to visit Cuba (for reasons including religion, journalism, education, visiting family, etc.) were granted the ability to bring back $100 worth of Cuban cigars and/or Cuban rum into the U.S., as part of a $400 total import allowance. This change—which coincided with a prisoner exchange that was brokered with Cuban President Raúl Castro—was a shift from the previous policy, which didn’t allow any Cuban cigars, or other Cuban goods for that matter, to be imported.

Now, travelers to Europe, Canada, Mexico, or other places where Cuban cigars are legally sold (including Cuba) can legally import Cuban cigars and rum without limitation, as long as the importation is for personal consumption only.

While this is a rather significant shift in policy, it’s important to remember the longstanding Cuban embargo is still in effect. Obama can’t reverse the embargo in its entirety; that would take an act of Congress. So don’t expect to suddenly find Cuban smokes at your local tobacconist, or a way to order them online from U.S. sellers. (Whether or not cigars can now be legally purchased by consumers from online retailers in other countries is not clear.)

Still, this is a major win for cigar enthusiasts who enjoy Cuban cigars and regularly travel abroad. It’s also a step in the right direction. The Cuban embargo has been a massive failure when you consider the objective was (and still is?) to cripple the Castro regime. The island’s totalitarian communist regime has been unbelievably stable for decades, and its economic policies have only recently begun to take small steps towards liberalization. Furthermore, America hypocritically has no qualms trading with many other countries that regularly suppress human rights and political freedoms.

So while it’s appropriate for cigar enthusiasts to cautiously applaud Friday’s announcement, our adulation for the administration should be, at best, very tempered. Recall that, thanks to President Obama and the anti-tobacco policymakers he relies upon to craft and carry out policy, cigars commercially solid in the U.S. at retail shops and online are subject to highly draconian regulations—regulations that will force businesses to close and eliminate an estimated 30,000 jobs in the U.S. and 300,000 jobs abroad.

Setting aside the ban on samples, new warning labels, and the ridiculously arbitrary nature of the February 15, 2007 cutoff date, the lack of clarity about the FDA approval process is the biggest reason why industry experts predict the rule will devastate the industry. What will qualify as “substantially equivalent”? How will the FDA build and maintain the capacity to process approval applications in a timely manner? How will small, family-owned boutique cigar operations pay the outrageously high costs needed to successfully gain FDA approval (estimates for the cost of obtaining FDA permission to sell a cigar vary widely from $20,000 to $100,000 or more for each size and each packaging option within each blend)?

One can see how the elimination of restrictions on importing Cuban cigars for personal consumption—which are not subject to FDA regulations, by the way—coupled with outlandish FDA rules on all other cigars could jeopardize U.S. retailers and manufacturers of non-Cuban cigars in places like Nicaragua, Miami, Honduras, and the Dominican Republic. What’s the message here? Commercial cigar sales in the U.S. have to abide ungodly stringent rules, while Cubans get to flow more freely? Is it not hard to envision a future state where Cuban cigars are exchanged on the black market once they have been legally imported? Won’t these cigar sales cut into the profits of non-Cuban manufacturers and retailers who must comply with the terrible new rules?

Whether or not this was Obama’s intention makes no matter. Good intentions do not always result in good outcomes, especially in matters of public policy. So while we aficionados tip our hats to Friday’s announcement, let’s remember the cigar industry is entering extremely perilous waters thanks to a reckless course set by Obama and misguided, misinformed members of Congress who agreed to grant FDA oversight over premium handmade cigars.

It should go without saying that Obama is no friend of cigars. But you certainly wouldn’t know that from reading the outpouring of support on social media, or the laughably off-target “reporting” from the mainstream media.

Patrick A

photo credit: Flickr

Commentary: Cigar Country Power Rankings (5-1)

28 Sep 2016

flag-top-10

While cigars are commonly associated with few countries, at least a dozen countries make significant contributions to handmade cigars. This week, we rank the top ten countries by their importance to the industry. The production of handmade cigars is truly global, as evidenced by the fact that Belgium, Costa Rica, Panama, Colombia, Peru, Jamaica, and the Bahamas—each of which grow cigar tobacco or make cigars—missed the top ten.

On Monday we counted down from ten to six. Today we reveal the rest of the top ten.

5) Ecuador Wrapper, wrapper, and more wrapper. That’s why Ecuador is so high on this list. Blessed with powdery, nutrient-rich soil and natural cloud cover, odds are good some of your favorite cigars introduced in recent years use Ecuadorian wrapper, likely grown by the Oliva tobacco family. Not only is Ecuadorian-grown Connecticut (where cloud cover makes netting unnecessary) an alternative to U.S.-Connecticut Shade wrapper, but the country also produces the increasingly popular Ecuadorian Habano leaf, as well as significant amounts of Sumatra-seed wrapper.

4) Honduras Not too long ago, Honduras surpassed Nicaragua when it came to cigar exports to the United States. That’s no longer the case, and it isn’t all that close but the country is still in a tier of its own above all but the top three on this list. Known for bold, flavorful tobaccos, Honduran tobacco continues to be a staple for cigars rolled in Honduras (especially in the country’s cigar epicenter of Danlí) and elsewhere.

3) Dominican Republic Long the number one handmade cigar country for cigars imported into the United States, today the Dominican Republic has a strong claim to our number three spot. Many victims of Cuban revolution ended up in the Dominican Republic, where iconic brands continue to be produced today. Add such classic brands as Davidoff and La Aurora, plus many upstart boutique brands, and it is easy to see why the Dominican Republic continues to be a juggernaut.

2) Nicaragua Both Nicaragua and the Dominican Republic have a strong case to make for second place, but in recent years Nicaragua has surpassed the Dominican Republic in many ways, especially as the social and political instability of the war in the 1980s moved into the rear-view mirror. In terms of handmade cigar output, Nicaragua, with its rich soil, has pulled even with the Dominican Republic in terms of imports to the U.S. in recent years, even though as recently as 2005 the Dominican Republic outproduced Nicaragua almost four to one. Today, many traditionally Dominican blends are coming out with cigars that include Nicaraguan tobacco, a fact that ultimately pulls Nicaragua ahead.

1) Cuba Although held back because Cuba’s cigar industry is state-controlled, Cuba still has some of the best tobacco-growing regions in the world, which results in many of the finest cigars. Plus, no country is as closely identified with cigars as Cuba. If ever we could see some of the top-grade Cuban tobacco used in combination with that from other countries, I would expect the result to be spectacular.

There you have it, our top ten. Agree or disagree? Let us know.

Patrick S

photo credit: Stogie Guys

Commentary: Cigar Country Power Rankings (10-6)

26 Sep 2016

flag-top-10

While cigars are commonly associated with few countries, at least a dozen countries make significant contributions to handmade cigars. This week, we rank the top ten countries by their importance to the industry. The production of handmade cigars is truly global, as evidenced by the fact that Belgium, Costa Rica, Panama, Colombia, Peru, Jamaica, and the Bahamas—each of which grow cigar tobacco or make cigars—missed the top ten.

Today, we count down from ten to six, with the top five being revealed Wednesday.

10) Indonesia Indonesian cigar tobacco doesn’t get a lot of respect from many cigar connoisseurs, but it is a workhorse. Sumatra wrapper is known for its mild spice, and Indonesian tobacco is frequently used as binder due to its excellent combustion qualities and neutral flavors that play well with more flavorful tobaccos. Take a look at any cigar catalog and you may be surprised at how many premium cigars use some Indonesian tobacco.

9) Brazil Although rich in history with a diversity of cigar tobaccos grownincluding Mata Fina, Mata Norte, and ArapiracaBrazil flies under the radar. After the Menendez family, which created Cuba’s famed Montecristo cigar, had their Cuban-based holdings seized by the Castro regime, the family spread out in search of other opportunities to grow tobacco and make cigars, including Felix Menendez, who became a pioneer in Brazilian tobacco. While few Brazilian puros are made, Brazilian tobacco is primarily used in combination with other tobaccos.

8) Cameroon Cameroon wrapper has a special place in the cigar industry. Put simply, there is nothing else like it. Grown predominately by the Meerapfel family in Cameroon and the Central African Republic, Cameroon wrapper features a mild spice that so far hasn’t been replicated. That’s why, even though quality Cameroon wrapper is expensive and sometimes delicate, more than one cigar maker has told me as long as it is available they plan on keeping a Cameroon-wrapped cigar in their profile, if for no other reason than because they enjoy the leaf so much.

7) Mexico For a long time, Mexican tobacco had a reputation as rough and course, but that has changed in recent years as Mexican puros have decreased but Mexican San Andrés Maduro wrapper has become an increasingly popular. With high quality Broadleaf Maduro wrapper hard to find, the industry has turned to Mexican leaf in large numbers, and consumers have welcomed the addition.

6) United States A century ago, cigars were rolled in every major U.S. city. Today, with the exception of a few boutique factories in Miami, almost no handmade cigars are made in the United States. Still, the country is important to handmade cigars because of the high quality wrapper grown in the Connecticut River Valley, especially Connecticut Shade and Broadleaf wrapper. As demand for Broadleaf has increased, tobaccoBroadleaf especiallyis also being grown in Pennsylvania. Although minute in terms of volume, an interesting experiment has also seen cigar tobacco grown in Florida for the first time in decades.

Check back Wednesday for the top five.

Patrick S

photo credit: Stogie Guys

Commentary: Cigar Consistency is No Hobgoblin

29 Aug 2016

Tobacco Field

Consistency with cigars is a trait often observed in the breach. We can all think of manufacturers who’ve had a hard time shaking a reputation for a lack of consistency.

Of course, we can also think of companies whose products are remarkably consistent. Yet it is not often included among the common compliments cited when cigars are reviewed.

Nowadays, with the proliferation of limited editions and one-shot issues where consistency is of little import, I fear it may be regarded even less. I think that’s a shame.

Knowing that a cigar you smoke today will be like one you smoked last month or last year—as well as a year or two from now—is important.

I thought about this the other day when I lit a Perdomo Lot 23 Robusto. I first smoked a Lot 23 (a Toro) more than nine years ago. My review wasn’t particularly favorable. Then, about three years ago, I went back to the line and sampled the Robusto. I changed my mind. It was a most enjoyable smoke.

And, since that time, I’ve almost always had at least a few of the moderately priced Lot 23s in my humidor. When I pick one up I know I’ll have a good experience.

Making consistent cigars is no small trick. It involves a great deal of investment. Investment in time, material, and personnel.

First, there’s got to be enough tobacco to keep making the cigars. And that tobacco must be carefully processed and aged. Only a talented and skilled blender can note the natural variances in harvest years and make the necessary tweaks to get the same results. Only skilled workers can produce the cigars to standards year in and year out.

Consistency, too, seems to be something many cigar smokers don’t value much when looking at cigar prices. Paying $15 or $20—or more—without complaint for a limited edition cigar is quite common. Yet many smokers resent a similar price for a cigar that’s been manufactured to consistent high standards for years.

All of which is something to contemplate the next time you light up or go searching through the humidor at your local tobacconist.

George E

photo credit: Stogie Guys

Commentary: A Closer Look at the Impact of the FDA Cigar Pre-Approval Process

10 Aug 2016

FDA-cigars-large

The Food and Drug Administration’s cigar regulations officially took effect on Monday, August 8, a date that will likely live in infamy for the handmade cigar industry. If you follow the industry by reading sites like this one, or if you spend a lot of time in cigar shops, you probably have heard that these regulations will be very bad for premium cigars. That’s true. But the full story is complex.

For starters, the full impact of the rules will take years to see. The various components of the new rules are wide-ranging with differing impacts. Warning labels, ingredient disclosures, sample bans, advertising regulations… Each create burdens for cigar companies, most of which can be passed to consumers. (The only rule change that likely won’t have any real impact is the part of the rule that sets the minimum age for purchasing cigars at 18, since that is the law everywhere already.)

The Biggest Change: FDA Pre-Approval Requirements

By far the biggest change is in what it takes to sell a new cigar in the United States. Before the FDA rules took effect, if you wanted to sell a new cigar, the process for doing so was relatively straightforward.

Basically, if you wanted to bring a new cigar to market and you didn’t own your own cigar factory, you found someone who did and struck a deal. Work out quantities, delivery date, and terms of payment and, depending on how active a role you wanted in blending and quality control, you could have a new cigar for sale in a matter of weeks or months if you were willing to pay for it. (Of course, there are more details and paperwork left out here but, fundamentally, that’s what it took.)

With the FDA rules having gone into effect on Monday, now, before you can sell or market that new cigar in the United States, the FDA must give you its permission. (Within two years, every cigar introduced after February 2007 will have to go through the same process.)

Estimates for the cost of obtaining that permission vary widely from $20,000 to $100,000 or more. Each cigar product (including each size and each packaging option) would need its own approval, though the FDA says the cost per approval should decrease if approval requests are bundled together, presumably as in multiple new sizes of the same blend.

Ultimately, whether the higher or lower estimates prove correct will have a huge impact, with the higher the costs the larger the barrier for new cigars. But just as important, if not more important, is the cost associated with how long the process takes. The FDA told us that the agency has a goal of acting on Substantial Equivalence approval requests (which are the route most cigars are expected to use) within 90 days. That may be the stated goal, but it is one many are skeptical the FDA can achieve, especially when you consider that many of the first cigarette approval requests took years for the agency to act on.

Uncertainty is the Biggest Cost

Talking with those in the cigar industry, I don’t think it would be an understatement to say that uncertainty of how the rules will be applied is almost worse than the impact of the rules themselves. Planning an ongoing business while facing unknown but potentially devastating regulations is all but impossible.

Hypothetically, if by spending $40,000 on the first application and $5,000 on additional sizes of the same blend guaranteed approval in six months, the impact would be bad, especially for smaller companies. But at least it would be known. What is scarier for a company, especially a small business, is spending that money on an application and then potentially having the FDA reject it, or sit on it for years without taking action. This is especially true since you already paid money to have the cigar made for testing and would have to spend more money to secure tobacco to make more when the approval is granted, if it is granted at all.

It’s easy to see how this uncertainty would be paralyzing to a cigar business that already has enough challenges making cigars that appeal to fickle consumers.

Loopholes in the FDA Pre-Approval Regime

I’ve never liked the word loophole when applied to complying with government rules. It implies there is something wrong with complying with the law to the letter, even if it isn’t in the exact way the regulators intended. But whatever you call it, as with any complex law, from the moment the FDA rules were written those affected naturally started to look for ways to lessen the impact.

The most obvious way to avoid or delay the full brunt of the FDA rule was to get cigars on the market prior to August 8. The flood of new cigars this summer suggests many companies took this approach, which buys them 18 months to see what the FDA approval process looks like, and another six months after that to sell their cigars without FDA approval.

Some companies are taking this even further with what are being called “stealth cigars,” which are cigars being delivered to one or a few retailers prior to the deadline without any fanfare with the intention of announcing the “new” cigar publicly at a later date when they are ready for wider distribution and marketing. Although I haven’t seen any examples as of yet, smart companies that were selling cigars in 2007 should have seen the possibility of the grandfather date issue, and made sure that cigars that normally may have been discontinued were kept alive with a small token amount of sales just to keep their options open.

Another possible loophole would be selling limited editions and other cigars overseas where retailers there could then sell them into the United States absent FDA regulations. Since the FDA regulations only apply to cigars made in the U.S., or imported or distributed into the U.S., direct-to-consumer sales from overseas could potentially legally bypass the FDA. Currently, many shops overseas are willing to ship Cuban cigars into the United States, and although the recipient may be violating the U.S. embargo on Cuban products, there isn’t any prohibition on buying cigars for personal use that aren’t of Cuban origin.

Judging the Impact

The full impact of the FDA regime will take at least two years to judge. Because of the flood of new cigars in advance of the rule’s effective date, we are entering a long period of transition. Further, until cigar makers have an idea of how much the approval process will cost and how long it will take, it will be too soon to know how they will react.

Any prediction made now is purely speculative, and absent enactment of the Traditional Cigar Manufacturing Preservation Act, the best we can do now is hope for the best and prepare for the worst.

Patrick S

photo credits: Stogie Guys