The Rising Cost Of Luxury
In spring 2022, Habanos S.A. announced that its pricing would increase uniformly around the globe to fall in line with the pricing in Hong Kong (one of the priciest markets in the world). As a result of this price-fixing strategy, finding Cubans cheaper in foreign markets (and even in Cuba) will likely become a thing of the past.
Since then, pricing for many brands has practically doubled, and in some cases – tripled from what it was prior to the big hike, with keystone brands Cohiba and Trinidad have receiving the greatest price increase.
The increases were stated to have been implemented due to an increased demand and a decreased supply for Cuban cigars.
Currently a decreased supply of Cuban cigars is being felt in markets around the world.
In Canada, Gary Hau, owner Ron’s Tobacconist in Toronto, Ontario says that getting Cuban cigars in his shop has proved “very difficult”. Gary, who prefers smoking Cuban cigars himself, has specialized in selling Cubans since he first acquired the store, which is among Toronto’s oldest tobacco locations.
“I haven’t had the Montecristo No. 5 in my stock for what seems like forever. I’m waiting on Cohibas and Trinidad. Sometimes I get a little bit come in here and there – if I’m lucky.” says Gary.
The Covid-19 pandemic hit Cuba particularly hard, as it relied heavily on its vital tourism industry which was mostly stymied during the pandemic. This left Cuba’s economy (which was fragile to begin with) in a deepened state of crisis.
Around this time, boxes of Cuban cigars appeared to be rushed out the door with tobacco that was still relatively young and unaged (referred to as still being “green” by cigar smokers) in an attempt to keep up with demand.
Then, in late September 2022 Hurricane Ian hit.
Winds that reached speeds of more than 200 kilometers per hour (125 miles) tore through tobacco fields, curing barns, houses, livestock, and anything else that stood in the way of the category three hurricane.
Ultimately, the storm collapsed Cuba’s entire power grid.
Ian’s wake left the Pinar del Rio tobacco province among the most severely devastated regions (the province accounts for 65% of all Cuban tobacco crops).
For much of the Cuban tobacco industry, the resultant outcome was the loss of an entire growing season, and the requirement for a massive rebuilding effort.
The culmination of both the Covid-19 pandemic and Hurricane Ian has resulted in effects that will likely be felt across the Cuban cigar industry into 2023 and beyond.