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MoTheMentor
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Discussion Starter · #1 ·
Heard a rumor (twice this past week) that Habanos plans to discontinue the Punch Black Prince and the Punch Super Selection No. 11. Has anybody else heard this or can verify it's authenticity?


MoTheMan
 

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http://www.tobaccostation.com.au/discontinued.asp

*snip*
To prop up the demand for the niche market Cuaba marquee, only Cuaba will continue to make perfecto vitolas. The Partagas Presidente, the Romeo y Julietta Celestes Finos, and the flagship of the Fonseca line, the Fonseca Invictos will not be produced after 2003. Also, as the El Rey Del Mundo Tanios, La Gloria Cubana Tanios, Partagas Churchills de Luxe, Ramon Allones Petit Coronas, Ramon Allones Coronas have such miniscule production levels, they are surely unprofitable, and will be cut. Furthermore, so that Habanos S.A. can continue to produce the maximum number of the vitolas that sell the most, vitolas within a marquee that have the same dimensions, but different blends will be axed. Such overlapping that exists with the corona gordas of the Punch marquee, with the Punch Royal Selection No. 11, the Punch Black Prince, the Punch Super Selection No. 1, and the Punch Punch, will be eliminated. As with Darwinian struggle, only the best selling cigar of a vitola will survive, in this case being the Punch Punch. Most notable of these cuts will be the Romeo y Julietta Prince of Wales, as it has the same size as the more popular Romeo y Julietta Churchill.
 

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Nero, if habanos sa is preparing Altadis is already done. I read somewhere(i apologize to the originator of what i am about to type of, i forgot where i read it) that altadis purchasing JR was a move to solidify a established distribution system for isoms once the embargo is over.

just my 1.75 cents
 

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DymOnamic
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This is a blurb from the Altadis homepage, they do seem to be poised for any potential profit taking if the embargo were to be lifted this decade. Smart business! Damn good idea.

The new owner of CCC-SEITA entered into a merger agreement in October 1999 with the former Spanish tobacco monopoly, Tabacalera, S.A. This merger was completed on December 17, 1999 and formed the fourth largest tobacco company in the world called ALTADIS, S.A. ALTADIS stands for Alliance Tabaco Distribution. On August 1, 2000 Consolidated and Havatampa formally merged as a result of the above. Additional facilities were added in Selma, Alabama and Tampa, Florida as a result of the merger. The parent company merger made Altadis the largest company in the world with a 25% share and the U.S. division, Altadis USA, the largest company in the US with a 38% share of the market. The Company has over 6,000 employees.

In addition, in September 2000, the parent company completed the purchase of 50% of Habanos, S.A. Habanos is the owner of most of the Cuban trademarks in the world, the franchiser of the Casa del Habano shops and owns parts of its distribution network.

The Company's mission, simply stated, is to provide the highest quality products in every category of the business, to give the best service to its customers, to provide an outstanding environment for its employees, and to be the lowest cost producer without adversely affecting any of these purposes.

(They forgot to say "and eliminate competition"!) :fu :w
 

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I was just thinking along these lines today. I read in Min Ron Nee that RyJ was known for its figurados and also that Habanos would consolodate the production of all figurados in the future under the Cuaba brand. It seemed that every major brand had a figurado shape of one kind or another.

If this is the case then what about the famed Monte 2's, H.Upmann 2's, Diplomaticos 2's, BBF, SP Belis...? These probably have a pretty strong following but that line in MRN and this thread have me wondering.

If all figurado production gets moved to Cuaba, will it all basically taste like Cuaba with no variation in blending?

One of the things that's interesting about Island smokes is that brands can have different blends within the brand and even different blends in cigars of the exact same size. That Punch could have 4 corona gordas, each with a different blend is something that I find exciting. Argh! I was under the impression that of the 4 corona gordas, Black Prince and SS2 were getting axed. It's a shame. So it'll be the best selling and not necessarily (opinions of course) the best sticks that will remain, eh?

DaveC -- Interesting that you should mention the Altadis - JR thing. It makes you wonder... A few years ago I remember a flap about JR selling reservations for boxes of Havana RyJ with purchases of DR RyJ to be redeemed at the end of the embargo. I think Altadis sued JR for that.
 

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Sometimes they have produced vitolas after announcing they would no longer do so. Neither the Cuaba Milleniums nor Salamones nor Diademas have or had the typical Cuaba blend or taste. They also do not consider torpedoes or bellicosos to be figurados and do not intend to discontinue the number 2 Monte, etc.
 

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Good points, cashcow. I also had no idea that the belis and torps weren't considered figurados by Habanos. Learn something new all the time here.
 

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MoTheMentor
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Discussion Starter · #9 ·
Wow!

All this discussion. I never knew there was so much going on with that.

Thanks for the snippet, and the URL Poker. That's useful reading.

Here's what I think is going on, and this is based on stuff I was learning in my Marketing and Operations Management classes in Business School.

1) Altadis is the 800 lb. Gorilla, they move markets, and when they walk, the Earth trembles. They are very aggressive marketers, their hefty size gives them market muscle. Over the lst 3-4 years they have been dividing up the market into niche segments and filling each niche with the appropriate product. Best example is the cigarillo market. Up to two years ago it was very miniscule, now many of you have witnesses just how much bigger it has gotten. Interesting that Cigarillos have been very popular in Europe, S. America, and CUBA, where a market niche for them already exists.

2) Axing overlapping marquees makes a lot of sense. Why? Because as in any production, when you complete a production run, you have to retool for the next production, whether making motorcycles or setting up the leaves for the next blend in a cigar. That is down time, idle time, when the manufacturing process (i.e. torecedors) is not being efficiently utilized. I like the idea of eliminating special marquees, like figuerados (although I'd hate to see several fave's of mine go). Why? Because it'll be better to centralize all production to the site of greatest efficiency. n Just think, not 4 or 5 Cuaba sizes, but 15 or 18! No, I don't think they'll all taste like Cuaba currently does (it doesn't make sense to do that), but I bet they'll have a myriad of flavors/complexities/strengths/characters. Now that makes more sense, to have a single site specializing in "exotic shapes" but able to produce a whole myriad of flavors (now that makes more sense).
3) Part of the push for consistency and quality in a product is: repeat sales. The customers keep coming back for more. Just think of any established brand name (i.e Sony, BMW, Kleenex, Habanos S.A.) and think of what kind of image that brings.

4) It's not just profits that Altadis seeks, it's market shares. Cigars are a very competitive business and anybody who's big, and therefore has large overhead, risks losing market share to an upstart. If Altadis's profits prove too healthy, trust me, a lot of others will enter the market and pretty soon both their profits & market share will decline. So to maintain healthy growth, not only are profits important, but so is maintaining market share. One of the best ways to do that is become innovative by producing new and existing lines cheaper and more abundantly so as to keep the customer coming back -- and it looks like Altadis is doing that.

5) The overall winner: we, the consumer. While we'll lose some favorite vitolas (I suspect that those vitolas with small number of customers can be easily substituted by other vitolas), the ones remaining should be more abundant, more available, and cheaper.

6) The strategy behind buying JR Cigars I think is pure vertical integration. If you control different segments of an industry, you also gain tremendous first mover advantage. If you keep the prices low enough, you can keep the competition out.

Well, anyhow, I could keep on rambling (easy to do when it's getting late), but I guess that's my two cents worth for now. If there any econimists out there, would love your input, feedback, or even corrections to these ideas.

MoTheMan
 

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MoTheMentor
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Discussion Starter · #10 ·
Wow! Looks like I rambled on & put an end to this string. [Silly blabbermouth me].

Just one last thing to add. Manufacturing decisions are hardly ever set in stone. What that means is that even if a product or product line is discontinued, if enough customers show interest in it (in other words there's enough demand in the marketplace), the factories will start making it again.

MoTheMan
 

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Re: Wow!

MoTheMan said:
...2) Axing overlapping marquees ... I like the idea of eliminating special marquees, like figuerados (although I'd hate to see several fave's of mine go). Why? Because it'll be better to centralize all production to the site of greatest efficiency...
Sound good, but I don't agree. IMO the diversity is the answer to perfection. For example, the types and variety one can get from Honduran or Dominican cigar makers, and many of their best are produced by family run businesses such as Fuente, Padron and so on. Same was true for pre-Castro cigars in Cuba - great cigars, from different businesses that were in competition with each other. If Cuba ever reverts to private run businesses, then we may see true masterpieces (although this is just a pipe dream!) :c :D

Centralised production may result in more consistency and better "overall" quality - when looking at very large outputs in terms of millions - on the other hand, the individuality and distinct charachteristics of those great ones are gone forever!. These days the blends seem to get closer and closer to become one! (it would be a nightmare to have 21 Cuaba figurados to choose from!)
 

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With this smart market savvy that they bring to the table it makes more sense than ever to buy aged cigars while they still exist. Soon everyone will ramp the market and buy their fav vitolas before they appear in limited brands or as the ELs of future years.
 

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MoTheMentor
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Discussion Starter · #13 ·
IMO the diversity is the answer to perfection
Same was true for pre-Castro cigars in Cuba - great cigars, from different businesses that were in competition with each other. If Cuba ever reverts to private run businesses, then we may see true masterpieces
I agree with you ESP. :cool: The missing factor in this market is competition. The communist environment in Cuba takes out the competitive edge, the desire to innovate, to better oneself or the previous production. Cuba's only incentive now is simply the money that their cigars bring into the country, and their golbel reputation. For those economic reasons, they'll want to keep the brands around diversified in terms of flavors and sizes, but their incentive, I don't think, runs much deeper than that.

MoTheMan
 

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they are always making claims of discontinueing cigars.

as for the purchase of jr's
i'll sum it up for you in drillers terms

they is hedgin their bets!

better to be ready than to have to try and run faster than the competition

k
 

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MoTheMentor
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Discussion Starter · #16 ·
I liked that!

better to be ready than to have to try and run faster than the competition

Well said. Gonna have to e-mail it to one of my old business school professors.


MoTheMan
 

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MoTheMentor
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Discussion Starter · #17 ·
Oops, forgot the quotes:

better to be ready than to have to try and run faster than the competition
 
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