This past May, Habanos S.A., the Cuban company that controls the distribution and promotion of premium Cuban cigars across five continents, issued a news release that raised a few eyebrows among cigar aficionados, to say the least.
While they talked about how 2021 was a record year in the sale of Cuban cigars worldwide ($568 million, a 15% per cent increase), they also slipped in a little nugget, about three quarters down the news release. The subheading was “Habanos redefines the concept of luxury in premium cigars”. Translation: Jacking the prices to the same level of those found in the Hong Kong market. So that $100 Cohiba (for the bigger ones), for example, is a new reality.
Boxes will be priced in the thousands. Habanos S.A. says the reason for this is an imbalance between supply and demand. The Trinidad brand will also be brought up to Hong Kong levels. Montecristo, Partagás, and Romeo y Julieta are also raising the prices.
Cuban cigar lovers are going to have to ask themselves how they define luxury when it comes to a smoke. Are those prices worth it? Or is it better to downsize to some of the premium Dominican and Nicaraguan options on the market?
Cuban cigars: Premium brands set for big price upticks
There’s no better source to talk about the real impact of all this than true Cuban cigar aficionados, so we did just that. Emad Chibli, a “Habanos Specialist” (accreditation given by Habanos S.A., a recognition of that person’s training and expertise in Cuban cigars, those who stock a full range of Cuban cigars, so buyers know they are getting genuine product), spoke with us about what’s going on with pricing.
Do you think this price increase is going to push a large percentage of Cuban cigar enthusiasts over to Dominican or Nicaraguan brands?
Not necessarily, it will depend on the type of cigar smoker. If they enjoy both, they may mix in more non-Cuban cigars into their rotation to reduce the cost and consumption rate of Cuban cigars. While some may significantly reduce their new Cuban purchases.
For the Habanos purist, it won’t matter. There are many great marcas outside of Cohiba and Trinidad to be enjoyed and aside from the prestigious brands the value is evident in the other global and secondary portfolio marcas such as Bolivar, Ramon Allones and Vegas Robaina.
Have they gone too far with the new pricing, for the average consumer?
In the short term, many consumers are upset with the significant price increase and may choose to purchase less or none at all. Let’s put things into perspective: no one needs to smoke Cuban cigars and it is a completely disposable hobby.
Habanos is moving their commodity from a premium to a luxury product positioning. Those that can afford them will continue to buy and enjoy. Those impacted financially will have to choose to reduce consumption or look for alternatives. In the next few months or year, things will stabilize and the price will be the price.
At the end of the day it is a business for Habanos S.A. They understand their market has a great demand especially with the current supply challenges. So they are looking for ways to improve their availability and profitability while innovating with more luxury-focused packaging for collectors.
How is this going to impact you personally, as a consumer and collector?
I have been fortunate enough throughout my cigar journey to try many different vitolas and fine tune my collection. Although I can probably just enjoy the cigars I am aging in my collection without making any new purchase for a while, I will continue to buy at the higher prices. But I will focus on the specific cigars I enjoy most and will always want to have accessible.
I may not be as inclined to try every new release now. But time will tell as things change and my palate may continue to evolve as well.
At the end of the day it is a business for Habanos S.A. They understand their market has a great demand especially with the current supply challenges.
Do you agree this new pricing is pushing Cuban cigars up onto a new level of luxury, up with fine Macallan scotch, Aston Martin, Gucci, and the like? And is that a good thing in your view?
It certainly seems like Habanos wants Cuban cigars to be perceived that way (as a luxury item) and in many ways it already is. If you asked a non-cigar smoker to name a Cuban cigar brand, they would most likely say “Cohiba”. The brand recognition already exists and is a status symbol now for many people on social media platforms. The luxury lifestyle market is booming in many aspects and Cuban cigars are becoming a norm for those with the means to enjoy them.
I don’t think it is necessarily a good thing, but it is inevitable at this point. I feel for those that are still new in their cigar journey, who are keen to explore different marcas and vitolas eventually reaching for Cohiba and Trinidad because of the newly amplified hype but may find the price point uncomfortable.