Views from a Smoke-Filled Room

LOS ANGELES – At the start of the New Year, some ideas on what’s coming next in the world of cigars and smoking:

>> Smoke-easies?

Cigar writer Richard Carleton Hacker claims to have invented this phrase in the 1990s, a take-off on the 1920s "speak-easy" where Prohibition was openly flaunted. The smoke-easy might be coming into its own.

Most smoking-ban legislation includes exclusions for retail tobacco stores and for cigar bars, among other locations. As smoking becomes more private, rather than public, rite, the "cigar bar" or a place reserved for the smoking of cigars – or cigarettes – may become more and more popular.

In some cities or states where such places have high percentage thresholds for the amount of revenue from tobacco products bought there, food service has been eliminated and restaurants or beverage stations have been set up next door. Eat first, enjoy your cigar after dessert.

This is actually a welcome trend, although the viability of this business model is uncertain. Cigar smokers prefer not to be in locations where they are bothered by the unenlightened and to the extent that cigarette smokers find their own such locations, they will leave the streets and doorways. That would make non-smokers happy, too.

>> Trim the lines:

There are a lot of cigars floating around these days. In the 2008 edition of our Perelman’s Pocket Cyclopedia of Cigars, we catalog a near-record 1,145 handmade brands in national circulation, up 35% in just over three years. And that doesn’t count additional, regional brands which are also on the rise.

With all of this clutter and competition for shelf space at local retail shops, look for manufacturers to begin trimming brands down in terms of shapes, wrappers and packaging.

Does Macanudo really need 24 different sizes, including two that are identical – the tubed Hampton Court and un-tubed Duke of Devon – and two Toro sizes, one the 6-inch by 52-ring Tudor and the tubed, 6-inch by 50-ring Thames?

Look for manufacturers to scale back their lines to those sizes which really sell.

>> Consolidation brings risks:

The story of the year in cigars was the agreement by the world’s largest cigar company – Altadis, S.A. – to be acquired by Britain’s Imperial Tobacco. That sale will be completed in early 2008 and will bring with it some substantial risks.

As consolidation continues in the tobacco trade, large cigarette companies which see declining volumes are looking for opportunities to add profits by acquiring, among other things, cigar companies.

As this continues, so-called "Big Tobacco" will have ownership interests in the larger cigar companies and remove the cigar trade from the family-owned, "mom and pop" status it has enjoyed for many years. This will make it easier for cigar interests to be thrown in with cigarettes when it comes to legislation and regulation because the large cigarette players will now also be the largest cigar players.

Altadis was also a large cigarette concern, but will Davidoff or Swedish Match – which do not sell cigarettes at all – be swallowed by a Big Tobacco whale in 2008?

Time will tell; in the meantime, all best wishes for a healthy and happy New Year.

(Rich Perelman is editor-in-chief of CigarCyclopedia.com, offering comprehensive daily coverage of cigars, accessories, issues, people and prices at www.CigarCyclopedia.com.

Rich Perelman

1/2/08

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