Cuba - premium cigar sales down look to women to increase sales..

February 23, 2010 - Premium Cuban cigars (Habanos) - sales tumbled 8 percent to $360 million in 2009 and have fallen by more than a tenth in the past two years as the demand for luxury goods around the world has plunged. (The 8 percent sales drop in 2009 was preceded by a 3 percent fall, to $390 million, in 2008.)

Government-run tobacco company Habanos SA said Monday, February 22nd that sales were most sluggish last year in Spain, the top market for the island's coveted stogies, but one also ravaged by recession and rising unemployment. (France, Germany and Cuba itself are also top Habanos markets.) Habanos was founded in 1994 as a joint venture between Cuba and Madrid-based Altadis SA, part of the island's push to draw private, foreign investment after the collapse of the Soviet Union cost it island billions of dollars in annual subsidies and trade. Altadis has been acquired by Britain's Imperial Tobacco Group PLC. (In 2008 - Imperial Tobacco Group to Enhance Joint Venture Altadis Had With Habanos Cigars..)

A drop in international travel also hurt sales at airport duty free shops in Cuba and elsewhere, which account for as much as 23 percent of the company's total business, said Habanos Vice President Manuel Garcia. "This is not what we were expecting, not what we hoped for anyway," Garcia said during a news conference kicking off Cuba's five-day annual cigar festival.

To boost sales Cuba wants to develop a largely untapped market for its famous cigars -- women. They have created the Julieta, a smaller, milder version of the Romeo y Julieta cigar, aimed specifically at female smokers. Women now make up only 5 to 10 percent of customers for Habanos, the worldwide distributor of Cuban cigars, marketing director Ana Lopez told a news conference kicking off the annual Habanos cigar festival. The Julieta is an attempt to overcome perceptions among women that Cuban cigars are made up of "only strong tobacco for men," she said.

The U.S. market, the largest in the world with 230 to 250 million cigars smoked annually, is off limits to Habanos due to the U.S. trade embargo imposed against Cuba since 1962.

References:
Cuban Cigar Sales Plummeted 8 Pct in '09 amid sluggish demand, second straight year of big decline by WILL WEISSERT, Associated Press, 2/22/2010; Cuba looks to women to boost sagging cigar sales, Reporting by Jeff Franks; Editing by Tom Brown and John O'Callaghan, Reuters, 2/22/2010.

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