There are no specific qualifications to be considered for this award. Typically, it seems like the award is given to the company who had the most “impressive” year, sometimes it ends up more as a most improved award.
Usually, that starts with considering whether a company really stood out for the new cigars it put out in a given year. This year, it doesn’t seem like anyone stood out in that regard. Nor was there a company that had some sort of revolutionary rebrand in 2020. It was 2020: most were just trying to figure out how to operate given the new complications and most of the big plans that companies had were thrown out the window.
When we vote on this award, we start by individually nominating companies and writing a few sentences about why we think they should be considered. At some point, it seemed like it was going to be a list of nominations about who did the most useful Zoom show, but then a different question was asked: which company did the most impressive thing in 2020?
COMPANY OF THE YEAR — IMPERIAL BRANDS, PLC ET AL.
Imperial Brands, plc; the mysterious Chinese companies that are “the buyers,” Habanos S.A., Altadis U.S.A, JR Cigar—everyone involved in this sale, you are the company(s) of the year.
The single most impressive thing a cigar company did in 2020 was Imperial Brands completing the €1.225 billion ($1.43 billion) sale of its premium cigar division, which includes half of Habanos S.A., as well as Altadis U.S.A., JR Cigar, Tabacalera de García and a host of others.
In 2019, Imperial announced that it was looking to sell the businesses after years of investor pressure to pay down debt. The British multi-national is primarily a cigarette company that is trying to prepare itself for a future away from cigarettes through brands like blu e-cigarettes and investments in marijuana companies. While trying to make this transition, it racked up £14 billion ($19 billion) in debt as of early 2020. As such, it was of no surprise to see the company trying to leave the premium cigar segment, something that wasn’t part of its core business, nor core future.
Given the size of the what it was trying to sell, it wasn’t clear who would be able to afford the more than $1 billion price tag. In the end, Imperial received a lot of interest—including from rivals like STG—but settled on still-unnamed Chinese buyers, who—likely for legal reasons—are buying the businesses in three separate transactions.
Gemstone Investment Holding Ltd will buy the company’s U.S.-based businesses for €185 million ($216.3 million), a deal that will include Tabacalera USA, which is made up of:
- Altadis U.S.A. — The company behind Montecristo, Romeo y Julieta and others in the U.S.
- Casa de Montecristo — A chain of high-end retail stores, some owned by Imperial and others owned by franchise operators.
- JR Cigar — The second-largest cigar retailer in the world.
Instant Alliance Limited, formerly Allied Cigar Corporation S.L., will pay €1.04 billion ($1.22 billion) for the rest of the premium cigar assets, including:
- 50 percent stake in Habanos S.A. — A joint-venture with the Cuban tobacco monopoly in the company that controls the sales and marketing of Cuban cigars worldwide.
- 50 percent stake in Internacional Cubana de Tabaco S.A. — A joint-venture which makes Cuban machine-made cigars.
- 50 percent stake in Promotora de Cigarros S.L. — A joint-venture which distributes Cuban machine-made cigars around the world.
- Flor de Copan — A cigar factory in Honduras.
- Tabacalera de García* — The world’s largest premium cigar factory, located in La Romana, Dominican Republic.
- VegaFina — A cigar brand primarily sold outside of the U.S.
- Stakes in local Habanos distributors around the world through a 50 percent share of Altabana S.L.
*The sale of Tabacalera de García is scheduled to be completed in 2021.
Imperial’s sale of its premium cigar division was far and away the most monumental thing any cigar company did in 2020, and probably the most monumental in at least a decade. As strange as it is to be presenting a cigar company this award for leaving the cigar industry, it speaks to the impressiveness that Imperial was not only able to get this sold, but also sold within the target price and relatively, albeit not completely, on time.
As such, it’s no surprise that Imperial et al.’s place as the top cigar company(s) of 2020 was unanimous across our four voters.
Honorable Mentions: Tatuaje, Dunbarton Tobacco & Trust, and La Flor Dominicana.