Originally posted by Scapino: If this were to happen, I wonder if the quality would suffer
You bet your ass. I'm almost completely certain this could happen. But they seem to be taking some precautions though. They have tested acres of new fields and have them ready to plant at any time. They're increasing their stockpile of cigars to 50 million with plans to apparently stockpile 100 million. They're refurbishing and/or reopening factories (Romeo y Julieta, El Rey del Mundo, Partagas, etc.). So I do have a little faith in Habanos, but not much.
prices will go up for certain. They work with the principle "increase prices, not sales" even now that sales go down, no way they will drop prices if the ban is lifted. Quality will certainly go down. The only saving grace will be if people like the Padrons, Fuentes, Pepin manage to buy tobacco from the Cubans, which I find very very unlikely.
tell you one thing ..vintage would fetch big number's at auctions,wealthy hedge fund types would demand the best...reg new production quality would go down,like during the craze in the early part of the decade..the high priced non-cubans will get crushed hard...good nite davidoff,padron and the other 30 dollare cigar makers...just my ho..
Posts: 250 | Location: new york | Registered: July 06, 2009
The demand in the U.S. will hampper quality for a couple of years and cost to the U.S. will be the highest of any country in the world. There will be a high early demand, but demand will only last a couple of years. U.S. will likely buy more sugar than tobacco, if it happens soon.
"It is good that warriors such as we meet in the struggle of life"
Posts: 1186 | Location: Indianapolis | Registered: January 07, 2007
Originally posted by Elaw: The demand in the U.S. will hampper quality for a couple of years and cost to the U.S. will be the highest of any country in the world. There will be a high early demand, but demand will only last a couple of years. U.S. will likely buy more sugar than tobacco, if it happens soon.
That is basically what I was thinking. Initially the demand would explode, the prices would skyrocket, the quality as a whole would decline until the market leveled off and reached equilibrium. But is Habanos S.A. a Cuban government controlled cartel? Would they be able to keep the price of the cigars artificially high by controlling release or would there be competitors?
When I travel to South America I can get great CC's (Cohibas, Partagas, R&J etc.) in local B&Ms for $6-15 USD a stick depending, whereas the price is quadruple it seems in Canada or Europe. If we did drop the trade ban I wonder if the rest of the world would suffer too.
I imagine the amount of counterfeits would increase as well.
Originally posted by Elaw: The demand in the U.S. will hampper quality for a couple of years and cost to the U.S. will be the highest of any country in the world. There will be a high early demand, but demand will only last a couple of years. U.S. will likely buy more sugar than tobacco, if it happens soon.
That is basically what I was thinking. Initially the demand would explode, the prices would skyrocket, the quality as a whole would decline until the market leveled off and reached equilibrium. But is Habanos S.A. a Cuban government controlled cartel? Would they be able to keep the price of the cigars artificially high by controlling release or would there be competitors?
When I travel to South America I can get great CC's (Cohibas, Partagas, R&J etc.) in local B&Ms for $6-15 USD a stick depending, whereas the price is quadruple it seems in Canada or Europe. If we did drop the trade ban I wonder if the rest of the world would suffer too.
I imagine the amount of counterfeits would increase as well.
Price differential is dueto taxes charged by those countries not by what Habanos SA is charging. That's why the duty free shops around the world can sell Cubans so cheaply. It's also why nobody in their right mind goes to Canada to buy Cubans and why guys like MoMoney sell veryfew non-vintage cigars to informed American consumers. Their price is reflective of the taxes and tarrifs that their countries levy.
Originally posted by Elaw: The demand in the U.S. will hampper quality for a couple of years and cost to the U.S. will be the highest of any country in the world. There will be a high early demand, but demand will only last a couple of years. U.S. will likely buy more sugar than tobacco, if it happens soon.
That is basically what I was thinking. Initially the demand would explode, the prices would skyrocket, the quality as a whole would decline until the market leveled off and reached equilibrium. But is Habanos S.A. a Cuban government controlled cartel? Would they be able to keep the price of the cigars artificially high by controlling release or would there be competitors?
When I travel to South America I can get great CC's (Cohibas, Partagas, R&J etc.) in local B&Ms for $6-15 USD a stick depending, whereas the price is quadruple it seems in Canada or Europe. If we did drop the trade ban I wonder if the rest of the world would suffer too.
I imagine the amount of counterfeits would increase as well.
Yes, Habanos, S.A. is a government-controlled cartel. There is no competition, and will not be until the government of Cuba is overturned again or until the government of Cuba adopts a free market system, whichever comes first.
Law of supply and demand. Demand would rise, supply would drop due to more initial demande and the price goes up.
Quality goes down because the rollers, already psuhing out cigars as fast as they can, would be asked to make more to meet the demand. New rollers would have to be hired and trained to help get the supply out. Result: poor quality and construction.
NC's would have to drop their prices because everyone would stop buying them since they now had access to the "forbiden fruit".
If the embargo is ever lifted, I wouldn't touch a CC for 6-8 years from the date it is lifted. During that time I will be stocking up on my fav. NC's which I will get at discounted prices since the demand won't be there anymore.
---------- BOOSA Member #41.
"Log on first" -- Hydragoat
Posts: 2281 | Location: Medford, NY | Registered: July 18, 2007
If the embargo ends good "Embargo years cigars" may take on the panache and collect-ability "Pre embargo cigars" now enjoy. Quality will deteriorate and those good cigars you have now will command a premium on the secondary market. There are vendors, one in Switzerland I spoke with, that are holding a bit of inventory just in case the embargo ends. How much will a cab of '07 BCG, for example, be worth if it could be sold legally in the USA?
