The Stogie Guys

[UPDATE 2: Text of the bill can be downloaded here. Provisions on the tax increases begin on page 288.]

[UPDATE: George Edmonson reports there was one small victory in House negotiations, as the “floor tax” was eliminated. The “floor tax” – also known as the “store killer” for the likeliness that it would bankrupt many B&Ms – was a proposed one-time tax on every cigar a store has in inventory.]

Today the U.S. House of Representatives is expected to vote and pass an expansion of the State Children’s Health Insurance Program (SCHIP) that includes a massive tax increase on cigars and other tobacco products, even though as of late last night the text of the bill was still not available. The Senate is expected to pass the bill on Thursday.

President Bush has promised to veto the bill pledging his support for SCHIP, but opposing the Democrats’ expansion of the program to wealthier families. “Instead of expanding SCHIP beyond its original scope, we should return it to its original focus, and that is helping poor children, those who are most in need,” Bush said last week.

Under the Senate proposal, various tobacco taxes funding the SCHIP expansion are being increased by at least 256%. While as of Friday multiple congressional staffers told StogieGuys’ own George Edmonson that they were still negotiating the House bill and trying to reduce the tax cap on cigars, it is believed the House bill will contain the same tax increases.

Under the plan, federal cigarette taxes were increased from 31 cents per pack to $1.00. The 256% increase was then applied to other forms of tobacco such as “large cigars.” The federal excise taxes on large cigars – like the ones we review here at StogieGuys.com – go from 20.719% with a cap of 5 cents per cigar to 53.13% of the manufacturer’s price with a cap of $3. For a cigar that retails for $7.50, the new tax would increase the price of a box of 25 cigars by about $100. The tobacco tax increases are set to go into effect January 1, 2008.

MoveOn.org used Bush’s veto opposition to blast Republicans, writing: “Stop the Republicans from blocking health care for kids.” But such statements are an inaccurate portrayal of Bush and congressional Republicans’ position. While some outside of Congress have called for SCHIP to be entirely eliminated, that is not the position of Bush or the majority of Republicans that oppose the SCHIP expansion.

Outside critics calling for the elimination of SCHIP cite that the program’s regulations drive up the price of private insurance for all, create incentives for lower-middle class families not to climb the economic ladder in an effort to keep SCHIP subsidies, and cause huge costs that “insure four previously uninsured Americans for the price of ten.” However persuasive such points may be, these are not the arguments made by Bush.

Bush’s veto threat is only in opposition to expanding the coverage from families of four earning as much as $72,000 per year, to families of four earning $83,000 per year. In fact, President Bush has said he approves expanding SCHIP to cover well-off families, but only if the states enroll 95 percent of those lower-income children first.

While the debate continues over SCHIP, there is almost no talk about the use of tobacco taxes as a source of funding.

Stogie Guys Analysis

Here at StogieGuys.com, we’ve always pointed out that if a government program is really in the public’s best interest, it would not be necessary to tax a small, already discriminated-against minority such as smokers. Additionally, there has been relatively little discussion about the fact that a tobacco tax funding health insurance creates a perverse government interest in ensuring that there are enough people smoking to maintain funding of the program.

With the veto threat pending, we will continue to watch this story. It is believed that the Senate might pass the bill with a veto-proof majority, but it is unlikely that SCHIP supporters in the House can muster the 2/3 majority needed to override a presidential veto.

–Patrick S

Tags: cigars

Joel and Ethan Coen – the famed writing/directing duo – are currently filming their next movie, Burn After Reading, in New York City. Portions of the film, which has been described as a “black comedy,” will take place at the Club Macanudo cigar bar on New York’s Upper East Side.

The movie stars George Clooney, John Malkovich, Frances McDormand (Joel Coen’s wife), and Brad Pitt. Clooney has starred in two previous Coen Brothers movies – O Brother, Where Art Thou? and Intolerable Cruelty.

According to Victoria McKee of General Cigar and Club Macanudo, while Pitt and Clooney do not have any scenes at the cigar club, John Malkovich will be filming scenes there today. This is Malkovich’s first collaboration with the Coens, but the feeling is that his acting style is a good fit for the duo.

In the movie, Malkovich will play Ozzie Cox, a former CIA agent whose soon-to-be ex-wife (Frances McDormand) steals a disc containing his memoirs and accidentally leaves it at the gym where it is found by a trainer (Brad Pitt) who believes he can use the info to blackmail Cox. To protect Cox, the CIA hires an assassin (George Clooney) to take care of the situation.

The Oscar-winning Coen Brothers are known for such movies as Raising Arizona, Fargo, and (my personal favorite) The Big Lebowski. While the new film’s title is a play on the book Burn Before Reading: Presidents, CIA Directors, and Secret Intelligence by Admiral Stansfield Turner, director of the CIA from 1977-1981, the movie is an original screenplay written by the Coen Brothers.

–Patrick S

Tags: cigars

TAMPA — From Ashtons to Iguanas, from scantily clad CAO Flavourettes to Guayabera-wearing blenders, Cigar Artisans 2007 seemed to have something for just about everyone.

With more than 60 vendors — most of them cigar sellers — on hand to dispense their wares, not even a couple of torrential downpours could dampen the spirits of smiling enthusiasts.

Al Remp announces the  winners.

The event Saturday afternoon was held at Thompson Cigar Co.’s outlet store near Tampa International Airport. Most of the activity took place outside beneath massive tents, unlike the 2006 party that was held in a large room at the Seminole Hard Rock Hotel & Casino.

Still, much was the same. Patrons exchanged coupons for cigars, Thompson’s Al Remp manned the microphone and helped select winners for giveaways that included a trip to the Dominican Republic, and cigar makers like Rocky Patel and Ernesto Perez-Carrillo chatted amicably with customers.

Moving among the booths, some differences were also apparent. Phillip Wynne of Filipe Gregorio cigars and Charlie Toraño, for example, weren’t able to make it, their company reps explained. And some who weren’t there last year, such as Jose “Pepin” Garcia, were passing out cigars this time.

As is often the case when Rocky is around, he was a star attraction. He spent the afternoon being interviewed, signing boxes for customers, chatting on the cell phone, and answering questions.

“Rocky,” I asked. “Do you ever do anything but work?”

“No,” he laughed. “Not really.”

Carlos M. Llaca, operations manager for Toraño Cigars, appeared to be enjoying himself as he was meeting customers and dispensing cigars. He talked enthusiastically about the company’s new maduro line due out soon, to be followed by another line later this year.

“Business is good,” said Llaca. “We’re happy.”

He said he is also pleased at the proliferation of large-scale cigar events like Cigar Artisans throughout the country. “This type of event is becoming more and more prevalent,” Llaca said. “It used to be you only had the Big Smoke.”

Rocky Patel is a hit.

This year, a local barbeque restaurant catered the Artisans gathering, and dozens of tables were set up under one of the tents. In addition to eating, patrons stopped to rest from the unrelenting temperature and humidity. It was a great place to chat and compare notes.

While I didn’t talk to anywhere near enough patrons out of the huge crowd to reach a decisive conclusion, most of those I spoke with were enjoying themselves and the goodies they were picking up. In my opinion, the selection of cigars handed out seemed to be better than 2006. Many were the same, but among the different sticks included this year were a 601, one from Pepin, a Rocky Patel Sun Grown, and Drew Estate’s Chateau Real, as well as quite a few flavored sticks like Havana Honeys, CAO Flavours, and Heavenly Cigars, for those who like them.

My only real complaint was the heat. If the event is to be held outdoors, my suggestion would be to push it a little more toward the fall

On the fun scale, Punch’s photo booth brought a smile to nearly everyone who stopped by to appear in a personal “advertisement.” And the friendly pooches ambling along with volunteers from the Southeastern Guide Dogs — a charity supported by the event — was a nice touch, too.

And, of course, there was always time for cigar talk.

I stopped by Don Pepin’s booth near the entrance and, through a translator, spoke with the master. It was, he said, the similarity of Nicaragua’s soil and weather to those in Cuba, coupled with his blending knowledge and experience, that helped him create the cigars that have incited such a storm.

What sort of cigar, I inquired, would he get if he could combine tobacco from both countries?

Before the translator could finish repeating the question, Don Pepin smiled. “It would be the best,” he said.

I told him I hoped to be able to smoke one someday.

He continued to smile and nodded: “Si.”

–George E

Tags: cigars

View all the photos from Cigar Artisans 2007…

(more…)

In a year of many anticipated cigar releases, perhaps the most anticipated non-Cuban cigar debut is only a month away. Speaking with Cigar Aficionado reporter David Savona, Padrón Cigars President Jorge Padrón said the company’s new 80^th Anniversary stick will debut “before Thanksgiving.”

At that time, the maduro version of the Padrón 1926 Serie 80 Years edition will be released, with a natural wrapper version to follow. The cigars are the first ever perfectos produced by Padrón, which has recently moved all of its cigar production to Estelí, Nicaragua after years of splitting production between Honduras and Nicaragua.

The large perfecto (pictured at right, held by Jose Orlando Padrón) will be distributed in boxes of eight and will retail for a pricey $30. Padrón has said that initially stores will only receive one box.

Total production of the “Padrón 80’s” – which use some of the oldest tobacco the Padróns hold – will top out around 40,000 cigars a year.

While final packaging has not yet been announced, expect bands with individual serial numbers as Padrón attempts to counter potential counterfeiters. Padrón’s anti-counterfeiting measures have been stepped up of late as their 1926 Millennium and 1964 Anniversary Series have become some of the most counterfeited non-Cuban cigars.

In a special “Urgent Alert” posted on Padrón’s website, the company gives customers tips for verifying the authenticity of their cigars and warns consumers about internet purchases from unauthorized online retailers.

With production of the cigar so limited and demand sure to be very high, we suggest talking to the owner of your local B&M about reserving one if you want to be one of the first to try this highly-anticipated stogie.

–Patrick S

Tags: cigars

Between the review of Cuban Crafters’ Don Kiki Brown Label Toro, the cigar manufacturing video, and yesterday’s review of a Don Pepin, this week’s material has almost exclusively revolved around Estelí. Perhaps that isn’t too surprising, especially when you consider the northern Nicaraguan city has some of the best tobacco-growing land in the world.

Since the Cuban Revolution of 1959, Estelí has been an asylum for Cuban cigar manufacturers seeking to escape communism’s stranglehold and maintain ownership of their businesses. As a result, significant segments of the budding population of 120,000 now earn comfortable salaries working in cigar factories to supply American demand. (Nicaragua is among the top three stogie suppliers to the U.S.)

But these jobs are in serious jeopardy. As this Chicago Tribune article explains, Estelí’s economy – and the frail economies of the entire cigar-producing region – would be devastated by Congress’ proposed tax hike.

“Government officials and industry leaders say thousands of jobs are at risk in Nicaragua, Honduras, and the Dominican Republic because of U.S. legislation that would hike taxes on cigars to help fund an expansion of children’s health insurance.”

In addition to the points I made in this July commentary, such looming economic damage is certainly worth noting when Congress reconvenes in September and attempts to reconcile the House and Senate versions of the proposed tax hike. Many of the benefits globalization has bestowed on the cigar-producing region would be forsaken – including high-paying jobs in Estelí.

“With cigars, bosses prize workers who master their company’s recipes and technique. To keep their workers happy, [the] Plasencia [factory] offers child care and tuition assistance for college. A cigar roller typically makes $100 a week, not a fortune but good pay in a country where most people make less than $7.”

While having to pay extra for our beloved hobby would be an inconvenience for cigar enthusiasts like you and me, the far-reaching effects of the tax hike would be nothing short of horrifying for the thousands who rely on the industry for their livelihood.

Not concerned about jobs in Nicaragua? Consider the economic devastation would include not only cigar rollers, tobacco harvesters, and others all across the Caribbean, but also hardworking retailers in the U.S.

–Patrick A

Tags: cigars

Altadis USA is the country’s largest cigar importer, so it should come as no surprise that the manufacturer used last week’s RTDA to announce the continued expansion of its well-known stable of cigar brands. Altadis Vice President Janelle Rosenfeld recently filled us in on all the details of their many new additions:

Already released is the new Bock y Ca Edicon de Oro brand. This Nicaraguan-made cigar features an Ecuadorian Sumatra wrapper and is available in boxes of 20 and bundles of 25. Currently shipping to stores, the line offers value for smokers with prices that range from $1.75 to $2.50 per cigar.

In October, Altadis will begin shipping new Playboy cigars. Following up on the company’s Playboy by Don Diego, the new Playboy line is made at Altadis’ Tabacalera de Garcia mega-factory in the Dominican, with an Ecuadorian Sumatra wrapper, Connecticut Broadleaf binder, and a blend of Dominican, Nicaraguan, and Peruvian fillers.

Another new addition to Altadis’ stable of brands is the Honduran Santa Rosa. Made at the same factory as Gispert, Saint Luis Rey, and Quintero, the reasonably priced ($3.60 to $4.50 per cigar) smoke comes in seven different sizes. The Santa Rosa – which is named after the Santa Rosa de Copan tobacco-growing region of Honduras – is made with an Ecuadorian Connecticut wrapper, a Honduran binder, and binders from Nicaragua and Honduras.

Primarily known as a Mexican brand, Te-Amo seems to be moving away from its Mexican roots with three “World Selection” blends. While still made in Mexico, the Te-Amo World Selection Series Dominicana Blend, Honduras Blend, and Nicaragua Blend each feature 54 ring gauge robustos, toros, and churchills, with a filler exclusively from the country from which each blend takes its name. The Te-Amo World Selection Series hits shelves in October.

Also being released this fall is another line from the Romeo y Julieta brand. Described by Altadis as the “richest, most full-flavored Romeo y Julieta yet,” the Romeo y Julieta Habano Reserve is made in Honduras with a Nicaraguan wrapper and binder around a combination of Honduran and Nicaraguan long fillers. With a suggested retail price from $4.50 to $6.00 a cigar, the new Habano Reserve blend debuts in September.

And the Habano Reserve isn’t the only new Romeo y Julieta line. The Habano Reserve and the highly anticipated Edicon Limitada (featuring an San Andreas Corojo wrapper) we reported on back in July are also being joined by a new Romeo y Julieta Cabinet Selección, which is part of Altadis’ new Cabinet Selección line. The Romeo y Julieta features a vintage Cameroon wrapper and joins “fuller-bodied” Cabinet Selección Montecristos, Cabinet Selección H. Upmanns, and Cabinet Selección Por Larranagas. According to Rosenfeld, the four Cabinet Selección lines are “available now at a limited number of retail tobacconists…and they are selling like hot cakes.”

As they become available, be sure to check StogieGuys.com for reviews of these and other new cigars.

–Patrick S

For three-quarters of a century, the Retail Tobacco Dealers of America (RTDA) have been hosting what they call “most important event of the year for tobacconists”: the RTDA Trade Show. Closed to the general public, the five-day gathering is an opportunity for manufacturers to unveil new stogies and stogie-related accessories.

The 2007 trade show, featuring over 300 exhibitors in more than 1,300 booths, wraps up today. So, we thought it appropriate to bring you some of this week’s highlights from the George R. Brown Convention Center in Houston.

RTDA → IPCPR

Writing to you from Washington, I’m no stranger to the endless alphabet soup of bloated government bureaucracies. And thanks to the RTDA board of directors, now I’ve got a new acronym to memorize: IPCPR. Due in part to the increasingly hostile anti-tobacco zealots and their attempts to stop adults from choosing to smoke, the RTDA announced on Saturday it will change its name to the International Premium Cigar and Pipe Retailers Association. Clearly, the move is intended to distance the organization from the cigarette industry, now a lightning rod for meddling do-gooders.

New Cigars Galore

Last Tuesday I provided you with a short rundown of several new cigars that were being introduced. Despite Congress’ attempts to raise federal taxes on premium cigars by as much as 20,000 percent, the trade show, as expected, was a showcase of new stogies. Among the new releases were lines of Scarface cigars from Universal Studios, Playboy by Don Diego stogies that proudly display the iconic bunny logo, and El Tiante 23 Series cigars from former Red Sox pitcher Luis Tiant. Rocky Patel’s got a new stick called Decade, and Alec Bradley introduced a box-pressed Maxx called The Vice. La Aurora is also shaking up its 1495 Series by offering the 1945 robusto in your choice of five – count ‘em, five – different wrappers.

Smoking Ban Looms

The Space City was an interesting choice for this year’s trade show, especially when you consider that it will be marred by a senseless smoking ban starting September 1. While the Houston Chronicle reports the law will include an exemption for “enclosed meeting areas within convention centers, hotels, motels, and other meeting facilities,” bestowing the trade show’s positive economic fallout on the city might send lawmakers in other cities the wrong message. Then again, in today’s sorry day and age, I suppose beggars can’t be choosers.

–Patrick A

Tags: cigars