For the week of January 28-February 1, 2008

Los Angeles – Kansas City-based Xikar has made a considerable name for itself in cigar cutters and is one of the top – if not the top – brand name in that segment. Now watch for them to make a major play in the humidor sector.

Xikar bought Willits, California-based Madelaine Humidification Systems on January 18, greatly expanding its humidor line from three models in its 2007 catalog to more than a dozen in Madelaine’s current line.

Madelaine’s humidor choices include models holding from 15 cigars up to 200 in a variety of familiar and exotic woods, including cherry, mahogany, black walnut, burlwood, bubinga and sapelle. It also makes a series of hard-shell travel cases that hold from five cigars all the way up to 80, nor to mention a full line of humidification devices from a small disk for maintaining 50 cigars all the way up to larger devices for 250 cigars.

>> The startling growth of the little cigar category has a lot of cigar makers looking carefully at that sector and one major player has already chimed in with a new brand that has a familiar name. Late in 2007, Swedish Match introduced a new, wood-tipped little cigar under the name Borkum Riff, extending the brand identity of its well-known pipe tobacco brand to the cigar category.

However, the Borkum Riff little cigar line has no pipe tobacco in it! Instead, it’s made with a homogenized tobacco leaf (HTL) wrapper and short-filler cigar tobaccos in a single size that’s 3 1/2 inches long and 21 ring gauge. Each cigar is wrapped in cellophane and the brand comes packaged in familiar tins of ten.

As is to be expected today, although there is only one size in the line, it’s available in six styles: Pure blend, without additional flavoring, plus Creamy Coconut, French Vanilla, Sweet Melon, Silky Peach and the especially aromatic Black Cherry. It’s a soft, accessible cigar that’s easy to smoke anytime and almost anywhere smoking is allowed.

Made in the Swedish Match factory in Houthalen, Belgium, a tin of ten retails for $2.79 not including local sales or tobacco taxes.

>> "The level of freshness is the deal breaker and the moment of truth for a cigar smoker is squeezing the cigar and discovering its freshness." That’s Swedish Match North America’s Marketing Director Brian Love, relating the findings of a company survey from August 2007 that showed 65 percent of smokers surveyed citing freshness as more important than taste and price.

Capitalizing on smoker interest in freshness in its machine-made cigars, Swedish Match has introduced a Foil Fresh pouch for its hot-selling Game by Garcia y Vega and White Owl brands. It offers either a single large cigar in its own pouch or two cigarillos in a resealable pouch. The Game by Garcia y Vega and White Owl cigarillo two-packs are available now with the Game Palma (6 inches by 42 ring gauge), and White Owl Blunt (4 3/4 x 41) in grape and peach flavors available on March 17.

"There was a significant reduction of moisture in the cellophane-wrapped cigars when stored in adverse conditions for two weeks," said Love. "By week four, they were dry. The new foil packaging clearly passed the threshold well over 44 weeks with almost no moisture loss when compared to cellophane-wrapped cigars."

>> At the end of the offer period for Altadis shareholders to agree to sell their shares to Imperial Tobacco, the British tobacco giant reported that more than enough shares were tendered to allow the acquisition to go forward. "Valid acceptances were received in respect of 235,922,978 Spanish Stock Exchange Shares, representing approximately 93.5% of Altadis' total issued share capital," said Imperial in a statement issued just after the January 18 deadline. Imperial offered 50 Euro per share for the takeover bid that will cost about 12.8 billion Euros (approximately $18.8 billion U.S.) in an offer which was supported by the Altadis board.

The near-total agreement of the Altadis shareholders, above the 90 percent mark, will trigger an opportunity under Spanish law for Imperial to purchase 100 percent of Altadis’s outstanding shares in what is called a "squeeze-out" of the remaining shareholders. Altadis will be de-listed from the Spanish stock exchanges when the squeeze-out acquisitions have been completed.

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Heard in the Humidor is a publication of Perelman, Pioneer & Company. Copyright 2008; All rights reserved.

Cigar Cyclopedia

1/28/08

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