Habanos S.A raising prices for Cuban Cigars | Effective Worldwide
Habanos S.A announced their price will be increased worldwide in early May, including all brands under their portfolio and no exceptions in regions. The company has stated that the main reason for price hikes is the growing imbalance between supply and demand.
We all know the demand of cigars has been rising recently, especially after the lockdown. The unstoppable demand has caused limited editions and highly sought-after formats always stay empty on shelves. Customers are fighting for a spot on the waitlists for Cuban cigars.
Cigar is a form of art that requires years to mature and a hundred pairs of hands to contribute to this ultimate handmade product. The production can’t be increased in just a snap. This luxury product’s supply chain is deeply affected by the pandemic. The factories in Cuban are forced to close or operate at about 50% of their maximum capacity due to preventive measures. The supply chains between countries are still disrupted by flight regulations. Making cigars harder than ever to arrive at your doorsteps.
Not to mention political instability issues inside the country, thus affecting the production & the manufacturing of the raw materials, tobacco leaves. This handcrafted product is facing an underproduction situation.
What brands and regions have been affected?
All brands under Habanos S.A will be affected, including Montecristo, Romeo y Julieta. Especially Cohiba and Trinidad. And the price of the selected brands will be set uniformly at a global level, even for Cuba’s retail stores.
“Habanos, S.A. has decided to reinforce this positioning and to set Cohiba prices uniformly at a global level. This decision applies similarly to the Trinidad brand, which consolidates its position among the elite of Habanos’ brands, becoming the boutique Habanos brand par excellence.”
Retailers are bound to follow the price indicated by the distributors. The price adjustment will be taken into effect shortly according to the local regions’ tobacco regulations.
What about the future?
The price hike indeed changed the buying behaviours of customers. More customers reach their hands towards premium New World cigars, such as Davidoff, Padron, Plasencia etc. . The roaring demand has already caused a shortage of several New World series. Would this force the New World brands to propose another price hike? This is an unknown.
So better stock up and age your favourite smoke. This might be a good investment when the cigars’ price goes up with ageing.