Heard in the Humidor: Week of December 17-21, 2007

Although many smokers of premium cigars don’t pay much attention to the flavored side of the cigar business, it’s growing in importance.

Los Angeles – Chris McCalla, legislative director of the International Premium Cigar and Pipe Retailers Association, circulated a happy note on December 13th that read in part:

"President George W. Bush on December 12th vetoed for the second time legislation aimed at expanding the State Children's Health Insurance Program (SCHIP) by $35 billion over five years exclusively funded by increases in the Federal excise tax rates on tobacco products, saying ‘our nation's goal should be to move children who have no health insurance to private coverage, not to move children who already have private health insurance to government coverage.’"

McCalla believes that since the Congressional session ends on December 22, the House and Senate might not even attempt an override vote, since those who count noses have indicated that there are not enough votes on the House side to override the President.

That keeps the status quo for now, and the SCHIP program is likely to be extended as is, with a certain fight over the issue coming next fall during the Presidential campaign season.

Although many smokers of premium cigars don’t pay much attention to the flavored side of the cigar business, it’s growing in importance. General Cigar underlined that in early December with the announcement that it has purchased the handmade segment of the popular Havana Honeys brand from founder Joe Gold.

The line is made in the Dominican Republic in five sizes and all of the shapes are available either flavored or without flavoring. A honey style was the first version (hence the name), but now most shapes are offered in honey, cherry, chocolate, peach, vanilla and rum flavors.

The handmade cigars aren’t cheap, however, and do not compete with machine-made flavored cigars at the low end of the price spectrum. The largest of the Havana Honeys sizes, the Del Sol, has a retail price of $4.16, up to $4.75 for the tubed version, before local tobacco and sales taxes.

General will take over the handmade segment of the business only, expanding their flavored-cigar offerings. They already offer two lines of handmade, flavored cigars: Kahlua Especial, made in four sizes by Drew Estates in Nicaragua and Helix Remix, made by General in four sizes in its Dominican factory and flavored with Amaretto or Café Mocha. Havana Honeys will compliment these blends with its more traditional approach of sweet and fruit flavors. And General will eventually produce the Havana Honeys line itself once the existing inventory has been sold.

As is our custom each year at this time, we welcome a new edition of the Perelman’s Pocket Cyclopedia of Cigars. This is our 14th annual edition, stretching back to 1995, tracking cigars marketed nationally in the United States. That first edition was a relative shrimp, listing "just" 370 brands.

Our new 2008 edition has the second-most brands ever, with 1,305 in total, covering handmade, machine-made and small cigars. Only the 1999 edition, published at the height of the Cigar Boom had more, with 1,448.

The new edition spans 640 pages and includes coverage of 1,145 handmade brands, a net increase of 71 from last year. It’s the third straight year that the number of brands has increased after a steady decline from 2000-04.

The price remains steady at $12.95 each and can be purchased at many better tobacco shops or direct at www.cigarcyclopedia.com

Heard in the Humidor is a publication of Perelman, Pioneer & Company. Copyright 2007; All rights reserved.

Rich Perelman

12/17/07

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