Cuban Cigar Sales Increase in 2012

The sales of Cuban cigars increased to $416 million last year, a $15 million increase on the year before. According to an Associated Press report from a press conference held at XV Festival del Habano, which began today, China’s increased sales were able to offset some of the declines felt in the European regions.

In September, initial figures indicated an 8 percent increase based off of preliminary numbers.

Update: The following press release has been issued:

February 26, 2013 — The Habanos Group did business for as many as $416 million in 2012, up 6 percent from the previous year, a token of its strength and positive trend in terms of sales in an increasingly restrictive market, said Habanos S.A. Market Operations chief Ana Lopez.

In a press conference held at the Intl. Conference Center in Havana, Cuba, during the opening of the 15th Habano Festival, Mrs. Lopez said that despite the ongoing economic crisis worldwide that continues to hit sales and consumption in some European markets –especially in southern Europe- other nations, such as Germany, France and Switzerland, have put good numbers on the board.

Another positive sign is the advance of some emerging markets in Eastern Europe, mostly in Russia, as well as in the Asia-Pacific Basin and the Middle East, that have offset the European downfall, the expert went on to say.

Habanos S.A. Marketing vice president Javier Terres said sales in Latin America went up a solid 9 percent last year, with Cuba leading a pack that also includes Canada, Mexico, Argentina, Brazil, Peru, Ecuador and the Dominican Republic.

The Asia-Pacific market has remained on the rise, a condition that has doubled cigar sales in that region. Mr. Terres also mentioned that China is holding on to its third position in global sales, only trailing behind chart-topper Spain and runner-up France.

In an effort to ward off faked Cuban cigars –the legit ones are exclusively rolled by hand- Habanos S.A. has introduced a Web-based barcode tracking system of the warranty seal whereby consumers can make sure they are puffing on the real McCoy.

Moreover, similar efforts on other projects are under way, such as the launch of products featuring additional security and safety elements in a bid to fight back that blight.

For his part, Habanos S.A. vice president Jorge Luis Fernandez Maique explained how the U.S. economic embargo on Cuba is making cigar production hit quite a number of snags, especially in the purchase of supplies and inputs that must be purchased through third countries in faraway regions.

Fares on charters sometimes get twice or three times higher, a situation that eventually results in higher prices than those more direct operations can yield. At the end of the day, that puts input and supply prices alone in the neighborhood of $400 or $500 million.

As far as revenues are concerned, the U.S. market remains off limits. If the trade ban were lifted, sales could reach somewhere around 50 million units in a single year, and a staggering 150 million units in an eight-year span. In terms of gains, the exec went on to say, the company could make between $350 and $400 million annually if that failed policy changed.