Cuba
One of the biggest beneficiaries of the diplomatic rapprochement between the US and Cuba is likely to be Tabacalera, a Spanish tobacco group. The Madrid-based company, which is part of Imperial Tobacco, owns a 50% stake in Cuba’s state cigar export company, Corporación Habanos. Tabacalera has played a key role in the marketing and selling of Cuban cigars in more than 150 countries around the world since buying the stake 15 years ago.
Now that Washington and Havana agreed to restore diplomatic relations, the company is hoping to take the US market – which accounts for two-thirds of premium cigar sales – by storm.
Fernando Domínguez, executive chairman of Tabacalera, says nearly one in three premium cigars sold in the US may soon come from Cuba. This example demonstrates how the changing political situation is creating surprising opportunities for businesses, particularly those from Spain, which is the largest investor in Cuba.
“Given the indisputable recognition of Cuban tobacco and its unique portfolio of brands, I think Habanos can capture 20 to 30% of the US cigar market in the first three of four years,” he said.
The US is the biggest market for puros, or premium cigars, with more than 300m smoked annually. For more than half a century, however, the import and sale of Cuban cigars from prized brands such as Cohiba, Montecristo, and Romeo y Julieta was strictly prohibited.
Cuban cigars were banned in the US in 1962, at the height of the cold war. Famously, John F. Kennedy held back his signature until a member of his staff was able to snap up 1,200 of his favorite Cuban cigars from tobacco shops across Washington. (See story on Cuban cigars on page 28)