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HEARD IN THE HUMIDOR
Highlights of the week in cigars and smoking
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For the week of July 7-11, 2008
The deal will require BAT to sell off some roll-your-own brands in Norway to satisfy the European Union regulators, but it will leave Skandinavisk Tobakskompagni - better known as ST - with $3.9 billion in cash and a nice cigar business to build on.
ST owns Henri Wintermans, a dominant player in small cigars (1.3 billion sold annually!), as well as Nashville-based C.A.O Cigars, which not only markets its own blends, but is also the distributor for Torano Cigars and for the Dunhill Dominican and Dunhill Signed Range brands. Time to buy some cigar companies?
What about Swedish Match? Noting that Imperial Tobacco paid 14.2 times the 2006 earnings of Altadis, S.A. for a $22.3 billion purchase price, using the same multiplier on Swedish Match, based on 2007 earnings (about $494.1 million U.S.), the price would be $7.02 billion. Even after using the proceeds from the sale to BAT, that's probably too rich for ST since it would have to finance the rest of the purchase.
That leaves possibilities which are much smaller in size, but equally interesting, including assembling a new, super-cigar company to challenge Imperial's Altadis division, Swedish Match and Davidoff of Geneva. Imagine putting together a powerhouse that started with Henri Wintermans and C.A.O. - whose manufacturing is done primarily in Honduras and Nicaragua - with a Dominican powerhouse like La Aurora or MATASA? It's worth noting that the C.A.O. Vision line is already made at La Aurora and the La Aurora and Leon Jimenes brands already have a strong international presence in duty-free shops as does Henri Wintermans.
Or perhaps an even bolder stroke, in buying the Tabacalera A. Fuente and the J.C. Newman Cigar Company?
>> The well-respected Tatiana brand of flavored cigars will introduce a new series called Mocha at the upcoming IPCPR convention and trade show in Las Vegas. The new blend will feature a Sumatra wrapper and Honduran-grown binder and filler leaves, with the flavor infused into the tobacco prior to the time it is rolled into cigars. Three sizes will be offered, all to be box-pressed and available in boxes of 25.
>> Cuban Imports has been best known for its new blends of existing brands such as El Rey del Mundo, H. Upmann and Por Larranaga. But it's now capitalizing on the success of its Exile brand with a new line called Exile Wired.
The wrapper Argenti speaks of was developed by the Oliva family at its Empalme, Ecuador farm from Criollo seeds. It was designed to offer a rich and complex flavor with a spicy-sweet finish. This leaf surrounds a blend of Nicaraguan and Dominican filler leaves with a U.S.-grown Connecticut Broadleaf binder. Four sizes are planned to be offered beginning in the fall; retail prices will range from $3.99 to $5.49 each, not including local sales and tobacco taxes. All four sizes will be offered in rustic boxes of 24 with a butterfly lid and braces using 16-gauge stainless steel wire!
>> Short fillers: A new study conducted at UCLA indicates that "Tobacco smokers who eat three servings of fruits and vegetables pe day and drink green or black tea may be protecting themselves for lung cancer." UCLA researchers found that smokers who ingested high levels of natural chemicals called flavonoids in their diet had a lower risk of developing lung cancer, an important finding since more than 90% of lung cancers are caused by tobacco smoking. Lead researcher Dr. Zuo-Feng Zhang said the study reviewed the diets of 558 people with lung cancer and 837 people who did not have the disease. The findings showed that eating strawberries, apples, beans, onions and Brussels sprouts and drinking green or black teas were the most effective in providing certain flavonoids (water-soluble plant pigments) that counteract damage to tissues . . . find our latest tasting review, of the four blends of the boutique Padilla lines, in our News & Views archives for July 4.
For the week of July 7-11, 2008
Los Angeles - European regulators have approved the $3.9 billion
(U.S.) sale of the cigarette businesses of Danish tobacco firm Skandinavisk Tobakskompagni A.S. to British American
Tobacco (BAT), with some minor conditions.
The deal will require BAT to sell off some roll-your-own brands in Norway to satisfy the European Union regulators, but it will leave Skandinavisk Tobakskompagni - better known as ST - with $3.9 billion in cash and a nice cigar business to build on.
ST owns Henri Wintermans, a dominant player in small cigars (1.3 billion sold annually!), as well as Nashville-based C.A.O Cigars, which not only markets its own blends, but is also the distributor for Torano Cigars and for the Dunhill Dominican and Dunhill Signed Range brands. Time to buy some cigar companies?
What about Swedish Match? Noting that Imperial Tobacco paid 14.2 times the 2006 earnings of Altadis, S.A. for a $22.3 billion purchase price, using the same multiplier on Swedish Match, based on 2007 earnings (about $494.1 million U.S.), the price would be $7.02 billion. Even after using the proceeds from the sale to BAT, that's probably too rich for ST since it would have to finance the rest of the purchase.
That leaves possibilities which are much smaller in size, but equally interesting, including assembling a new, super-cigar company to challenge Imperial's Altadis division, Swedish Match and Davidoff of Geneva. Imagine putting together a powerhouse that started with Henri Wintermans and C.A.O. - whose manufacturing is done primarily in Honduras and Nicaragua - with a Dominican powerhouse like La Aurora or MATASA? It's worth noting that the C.A.O. Vision line is already made at La Aurora and the La Aurora and Leon Jimenes brands already have a strong international presence in duty-free shops as does Henri Wintermans.
Or perhaps an even bolder stroke, in buying the Tabacalera A. Fuente and the J.C. Newman Cigar Company?
>> The well-respected Tatiana brand of flavored cigars will introduce a new series called Mocha at the upcoming IPCPR convention and trade show in Las Vegas. The new blend will feature a Sumatra wrapper and Honduran-grown binder and filler leaves, with the flavor infused into the tobacco prior to the time it is rolled into cigars. Three sizes will be offered, all to be box-pressed and available in boxes of 25.
>> Cuban Imports has been best known for its new blends of existing brands such as El Rey del Mundo, H. Upmann and Por Larranaga. But it's now capitalizing on the success of its Exile brand with a new line called Exile Wired.
Also scheduled for introduction at the IPCPR convention & trade show,
Exile Wired was developed because of the success of the Exile blend. "The
popularity of and demand for Exile cigars has led us to develop a more
modestly-priced companion to reinforce the brand across a wider audience," said
Cuban Imports president Michael Argenti. "With an innovative
new wrapper not seen in the industry before, Exile Wired offers true value to
our loyal customers through its inexpensive price points and traditional, Old
World flavor."
The wrapper Argenti speaks of was developed by the Oliva family at its Empalme, Ecuador farm from Criollo seeds. It was designed to offer a rich and complex flavor with a spicy-sweet finish. This leaf surrounds a blend of Nicaraguan and Dominican filler leaves with a U.S.-grown Connecticut Broadleaf binder. Four sizes are planned to be offered beginning in the fall; retail prices will range from $3.99 to $5.49 each, not including local sales and tobacco taxes. All four sizes will be offered in rustic boxes of 24 with a butterfly lid and braces using 16-gauge stainless steel wire!
>> Short fillers: A new study conducted at UCLA indicates that "Tobacco smokers who eat three servings of fruits and vegetables pe day and drink green or black tea may be protecting themselves for lung cancer." UCLA researchers found that smokers who ingested high levels of natural chemicals called flavonoids in their diet had a lower risk of developing lung cancer, an important finding since more than 90% of lung cancers are caused by tobacco smoking. Lead researcher Dr. Zuo-Feng Zhang said the study reviewed the diets of 558 people with lung cancer and 837 people who did not have the disease. The findings showed that eating strawberries, apples, beans, onions and Brussels sprouts and drinking green or black teas were the most effective in providing certain flavonoids (water-soluble plant pigments) that counteract damage to tissues . . . find our latest tasting review, of the four blends of the boutique Padilla lines, in our News & Views archives for July 4.