PREMIUM CIGARS ON THE RISE





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PREMIUM CIGARS IMPORTS CLIMB PAST 300 MILLION

BY DAVID SAVONA

For the first time since 1998, imports of premium, handmade premium cigars reached 300 million units. More than 320 million premium cigars were shipped to the United States in 2005, 13.5 percent more than in 2004. The gain - the largest the market has seen since 1997, considered the last year of the 1990s cigar boom - comes despite an increasingly unfriendly environment for smokers as myriad states enact smoking bans.

Shipments from the Dominican Republic, the world's leading producer of handmade premium cigars, were especially strong, up 22.3 percent, to 179.5 million. (The country is also a leading producer of machine-made premium cigars, which are not included in these figures.) Honduran shipments grew by 5.2 percent, to 87.7 million, and Nicaraguan shipments grew by 5.4 percent, to 50.4 million.

Mexico was once regarded as a leading cigar producer, but shipments from that country continue to fall. Since 2000, the nation's cigar exports to America have been cut by two-thirds. Last year, Mexico shipped only 1.4 million premium cigars to the United States, putting it behind the Bahamas, which shipped 1.6 million premium cigars. Altadis S.A., the world's largest cigar company, had a very robust year.

Sales at the Spanish/French company grew by 15.6 percent, to 4.1 billion euros ($4.9 billion), compared to 3.6 billion euros ($4.3 Million) in 2004. The company called fourth-quarter sales particularly strong. Altadis's cigar division grew by 8.3 percent, with sales of 885 million euros ($1.1 billion), compared to 817 million euros in 2004.

The growth came despite flat results from Europe. The company's American unit, Altadis U.S.A. Inc., posted an 8.8 percent sales gain. Sales of Cuban premium cigars were strong. Altadis owns half of Cuba's Habanos S.A., the worldwide distributor of Cuban premium cigars, and said sales were especially good in the emerging markets of the Middle East, Russia and China. Swedish Match AB, the No. 2 cigar producer, posted a more modest gain in 2005, increasing sales by 2 percent, to 13.3 billion Swedish kronor ($1.7 billion). Cigar sales outperformed the rest of the company, growing by 4 percent, to 3.3 billion kronor ($417 million).

Swedish Match owns General Cigar Co., the maker of Macanudo, Bolivar and other brands, as well as El Credito Premium cigars, the producer of La Gloria Cubana.

Premium cigar imports are not the same as sales, but the substantial rise in shipments is a sure sign that America's passion for smoking great premium cigars is increasing.




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