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Cigars and Recession

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We have heard a lot about the economic recession that is now world-wide and how it is affecting the people as well as industries, but will the slow-down in the economy negatively impact the production of cigars?  Well, this is a question that you might not have asked yourself if you are a cigar smoker. There is a mixed bag of views and opinions on this issue, but its important to consider that if sales of cigars start to decline and manufacturers aren’t able to keep their employees the amount of cigars produced could be severely affected. Some say that the popularity of cigars is “recession proof”, but the recession has impacted the sales of cigars.


The tobacco industry is undergoing major changes, “including higher taxes, more regulations and a growing number of public-smoking bans that have made the social use of cigars rarer,” says recent story from the Richmond Times-Dispatch in Virginia. But despite all these difficulties the cigars lovers are very much optimistic about the future of cigars as a whole. As one cigar industry executive says” I think I would rather be a tobacco executive now than an automotive executive,” So it doesn’t look like the cigar industry is too scared of this recession. Even though federal taxes, smoking bans, and the recession have hampered sales of premium cigars over the past several months, not everything is looking bad for cigar smokers. The Times-Dispatch reports sales are down 17%, but it also estimates that the cigar market is poised for growth, especially when the economy recovers.

Since the bulk of cigars sold in the U.S. are the cheaper machine made cigars, that segment of the market has the highest risk for a downturn.  However, the premium handmade imported cigars are experiencing somewhat of a renaissance. 2007 was the second best year on record for premium cigar imports into the United States, despite many obstacles. This favoritism for the premium handmade imported cigars will continue to increase if the trade ban is lifted on Cuban Cigars. The cigar traders are telling congress that “if you are about to lift the ban from embargo, you need to ensure that we also will have access to Cuban tobacco in good time, so that we then can make Cuban cigars and compete with anybody else here in the marketplace”.

Luckily for the cigar smokers, the industry is not in a panic because of the recession.  Remember, Cigars have survived the Easter Rising, two world wars, the economic depression of the 1980s and various smoking bans. There will always be demand for high quality cigars and there will always be people who want to treat themselves to a relaxing cigar. As one of the cigar shop owner says ‘‘a recession is not finality; it will lift and, when it does, you have to be ready. We will continue to offer the same service and, whether our customers get richer or poorer, we will still be here.”

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