Can you believe that it’s already 2018? 2017 sure went by in a flash! Let’s take a look at some of the top stories from the Industry this year.
Personnel Changes at Major Cigar Companies
Let’s start by talking about major personnel changes. There were quite a few staff changes at the top of major Cigar companies this year.
For starters, in January, Drew Estate’s co-founder Jonathan Drew became the company’s president.
At Davidoff in August, Andreas Schmid and CEO Hans-Kristian Hoejsgaard both made their departures while Domenico Scala Beat Hauenstein took over as new chairmen for the company.
Meanwhile, Mark Pursell departed his role as CEO of IPCPR in September. In October, Janelle Rosenfeld left her post as VP of Marketing for Altadis U.S.A. Terence Reilly, National Sales Manager at Quesada, departed his company as well.
That same month, Michael Giannini joined Ventura Cigar Co. as Creative Director. In November, Swisher International selected John Miller as President.
Miscellaneous Industry News
- We lost several industry greats this year. Gilberto F. Oliva Sr. passed away at age 86 this December, as did José Orlando Padrón at age 91. This March, we also lost Avo Uvezian, who died just two days after his 91st birthday. While we lament the passing of these legendary men, their legacies will live on through their celebrated brands.
- This year marked the 25th anniversary of Cigar Aficionado, the industry’s most prominent publication.
- On a related note, Apple Inc. decided this year that it has a beef with cigars. The company decided to remove Cigar Aficionado’s popular Where to Smoke app from the App Store. Apple argued that the app was in violation of its TOS despite the fact that it does not promote or sell specific products.
- Room101 branched out into spirits in November. The famous cigar brand now has its very own gin label.
- Hurricane Irma took its toll on cigar companies in Florida in September. Many were forced to temporarily shut down their operations until the storm passed. Nonetheless, the industry was very generous with helping out the broader community in the wake of the storm. Both Tabacalera USA and a boutique cigar company called EPC Cigar Co. donated substantially to relief efforts.
- A few companies made notable expansions this year. Casa de Montecristo has new locations in Arizona and Florida. Davidoff opened up a brand new Camacho Factory. La Flor Domincana expanded its Tamboril factory in the Dominican Republic.
Now that we’ve gone over some general industry news, let’s talk a bit about developments concerning Cuba in 2017. Let me go over the timeline:
- First, let’s put things in perspective. In 2016, 4 million tourists visited Cuba. The Ministry of Tourism in Cuba reported that was a jump in 13% over the prior year. It was also a record. Many of those travelers came from the USA. After Obama opened up relations with Cuba, there were finally flights scheduled between the US and Cuba on a regular basis again.
- Early in 2017, a number of airlines decided to either restrict their flights to Cuba or end them altogether. These included American Airlines, Spirit, Frontier, JetBlue, and Silver Airways.
- In June, Trump announced a new set of limits on trade and travel relations between Cuba and the US.
- In September, unusual circumstances at the US embassy in Havana resulted in the State Department culling back personnel so that only emergency staff would remain on hand.
- In November, yet more restrictions were announced by Trump’s administration. You can still transport cigars from Cuba to the United States, but you must “fit into the revised travel categories” in order to do so.
So while the doors are not totally closed, they are moving in that direction. It has once again become challenging to find flights to and from Cuba, and many hotels in Cuba no longer accept US citizens.
On top of that, you can only visit Cuba if you fit into one of the previously mentioned “travel categories.” These include:
- Family visits
- Government business
- Business-related travel
- Religious travel
- Public performances
- Support for the people of Cuba
- Humanitarian ventures
- Private foundations
- Information-related imports and exports
- Other select exports
So can you still take a flight to Cuba, get off and buy cigars, and return home with them? Sure, but you will need to have a legal excuse for your presence there.
On the Legal Front
The easiest way to go over legal highlights from 2017 is just to review them chronologically as well. Here’s the rundown of major events:
- April saw the publication of a scientific research study in The New England Journal of Medicine. The FDA provided funding for the study, which demonstrated that kids are not smoking premium cigars. Yes, we all knew this—but the FDA didn’t, so this research is important.
- Several states raised their legal smoking age to 21 years. This included New Jersey in July, and Maine and Oregon in August.
- In August, it was announced that the cost of cigars in New York City is set to increase significantly.
- There was some actual good news in September in the House of Representatives. An act called “Make America Secure and Prosperous Appropriations Act of 2018 (H.R. 3354)” would prohibit the FDA from regulating the premium cigar industry. It passed in the House, but still needs to pass in the Senate.
- In October, International Premium Cigar & Pipe Retailers, the Cigar Association of America and the Cigar Rights of America all filed motions against the FDA concerning product labeling rules. The FDA filed back on October 24th. On December 15th, the case went to court, and is still awaiting a ruling. The case is titled, Cigar Association of America, et al. v. United States Food and Drug Administration.
- Also in October, the FDA clarified that free samples of cigars are not completely banned. They simply cannot be given out until a customer purchases a cigar.
- 29 Republican congressmen submitted a letter to Mick Mulvaney, the director of the White House Office of Management and Budget (OMB), in December. The letter requested that premium cigars be removed from the FDA’s regulatory sphere. There is also a relevant bill in Congress (Traditional Cigar Manufacturing and Small Business Jobs Preservation Act of 2017 (H.R. 564) which has garnered 133 bipartisan co-sponsors. It has yet to be passed by either the House or the Senate.
Now you are up-to-date on all the biggest events to shape the cigar industry through 2017. While there have been some losses on the legislative front, particularly with regards to Cuba, the industry overall has been strong. There are a lot of exciting cigar releases awaiting us in 2018, so it should be a great year ahead!
2017 in Review: Cigar Industry Highlights
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