Why Cuban cigars are so expensive – Business Insider

Following is a transcript of the video.

Narrator: Cuban cigars hold a reputation as the world’s most opulent tobacco product. A box of good-quality Habanos can cost thousands of dollars. Every hand-rolled Cuban cigar goes through about 500 manual tasks from seed to cigar. But over the last 25 years, cigars made in other countries in the Caribbean and Central America have become comparable in quality, consistency, and cost. Worse still for American smokers, your Cuban cigar could be fake. Some experts suggest that up to 95% of all Cuban cigars in the US are actually counterfeit. So why are Cuban cigars so desirable? And is that why they’re so expensive? For more than 200 years, the culture of cigar making in Cuba hasn’t changed. In a process that takes about a year, tobacco leaves are grown, harvested, and hung in drying houses called secaderos before a slow fermentation occurs, which enhances flavor, aroma, and burning characteristics. Each leaf is inspected for its type, appearance, and quality and handed to a torcedor, a highly skilled cigar roller, greatly respected in Cuban society.

José Castelar Cairo: “My name is José Castelar Cairo. I work here in La Triada. I have been a cigar maker for 61 years. To make cigars here in Cuba, we depend on five types of leaves: a leaf that is called ligero, which is the one that gives strength in the cigar; another leaf that is called seco, the one with the aroma; another leaf is called volado, which is in charge of the combustion inside the cigar. It is followed by the binder that wraps the ligero, seco, and volado. And the last leaf is the wrapper, which is what I am doing, is the one that dresses the cigar, and the wrapper gives presence to the cigar.”

Narrator: The heartland of Cuban cigar production is in Pinar del Río, the westernmost province of the island, where 70% of premium cigar tobacco used by state-run cigar companies is grown. Cuban tobacco growers claim that the fundamental influence on quality is the region’s terroir, the unique environmental factors that affect a crop.

Richey Morin Rico: “The first thing to be considered as the best cigar in the world is that four factors make it unique. It is the soil where it is grown, the climate of the region where it is grown, the manual labor, and the variety of black tobacco used. I know that they have tried to take the strain many times, have tried to take the seed, and have tried to take the workmanship. Still, in all the places where they have put it with similar conditions, it has not been achieved in the same way.”

Narrator: But some cigar connoisseurs now argue that cigars from countries like Nicaragua and Dominican Republic, which the industry calls New World cigars, have become both desirable and reliable in the market.

Mitchell Orchant: The offering has become improved incredibly. The presentations are excellent, the blending is excellent, the construction’s excellent. In very general terms, New World cigars are better quality than Havana cigars because they have better quality-control procedures. Havana have been very much behind the curve on quality control. I would say, on an average box of Cuban cigars, 25 cigars, it’s not unusual to get three that are unacceptable in terms of quality, usually in terms of construction more than blending. Whereas on an average box of 25 New World cigars, I would expect all 25 to be absolutely perfect.

Narrator: Despite the flaws in quality control, Mitchell, who’s an expert in vintage Habanos, still prefers Cuban cigars.

Orchant: I would say I smoke eight Havana cigars to two New World cigars, and I absolutely adore Havana cigars. However, I very much appreciate New World cigars as well. It’s nice to mix it up because there really isn’t better, there’s only different. So, you know, it’s not a case of “Cuban cigars are the best.” They’re the best for me; they’re the best for a lot of people. But 40% of our customers, the best is New World for them. So it’s just personal preference.

Narrator: In addition to quality, there are a few fundamental factors that determine the price of all cigars. Firstly, the size, measured in both length and diameter. Generally speaking, the larger the cigar, the more expensive it is. Secondly, the vitola, differently shaped cigars which take extra time and consideration when rolling. Thirdly, the age. The longer a cigar has aged, intensifying the depth of flavor and aroma, the more precious it becomes. But lastly, and most importantly, is the branding.

Habanos is the corporation, part-owned by the Cuban government, that controls the worldwide commercialization of all Habanos cigar brands. All Habanos cigars are made in Cuba, but not every Cuban cigar qualifies as a Habano. The state-owned company issues Protected Denomination of Origin approval for a selection of brands whose cigars it claims are manufactured to the most stringent quality-control standards. To protect against counterfeiting, Habanos only exports to selected companies in each country.

The only nation it does not sell to is the United States, which hasn’t allowed the import of Cuban cigars since the 1962 embargo actioned by President John F. Kennedy, who just hours before signing the decree banning all Cuban products from the United States ordered his press secretary to buy over 1,000 Cuban cigars. Not only did this ban increase the desire for authentic Cuban cigars for American smokers, but it also created a booming black market for smuggled and counterfeit cigars.

Orchant: There’s just so many fakes around in the US. You can’t buy Cuban cigars and get them shipped into America. It’s illegal for the Americans. And therefore, I don’t know where they’re buying from, unscrupulous people. Maybe the fake situation has declined a little bit since Obama opened up that you could travel, purchase Cuban cigars, and bring them in personally if you’ve been on a holiday somewhere, you know, I think you could bring in up to $800, I think. And above that you can bring in whatever you want and pay a very small amount of duty. So it may have improved slightly, but I would say probably 95% of the cigars that are supposed to be Cuban cigars that I’ve observed, quite simply are very bad fakes.

Narrator: Despite being the only country that cannot legally import Cuban varieties, the US is still the top cigar-consuming country, by a considerable margin. The cigar industry has grown substantially worldwide in the last 20 years, and research has previously predicted the market would reach $21 billion by 2025. But cigar traders have long questioned Cuba’s supply capabilities, an issue made even more problematic amidst a global pandemic.

Orchant: Can Cuba continue to supply as much as we need to feed the demand of our customers, from agricultural problems to shipping issues recently due to coronavirus slowing down all the shipping lanes? Will that ultimately feed through to the market by prices increasing or discounts reducing? That remains to be seen, but I think that’s the more likely scenario.

Narrator: As with any consumable, taste and enjoyment are subjective. Considering its depiction as a status symbol in society for over a century, it’s reasonable to say that the allure of Cuban cigars is somewhat based on prestige. And although high prices are fetched for some Habanos, particularly where outlawed in the United States, in recent years all variety of premium cigar have become uniformly priced. Nonetheless, despite an increasing appetite for cigars from other countries, some connoisseurs will insist that the most authentic smoke comes only from Cuban cigars.