Protesters In Nicaragua Block Pan-American Hwy, Stalling Cigar Shipments

June 12, 2018

By: Gregory Mottola - Cigar Aficionado

nti-government protesters in Nicaragua have put up several roadblocks along the country’s Pan-American Highway—a major shipping route—stopping an estimated 6,000 transport trucks and cargo vehicles headed to ports in Nicaragua and Honduras. As a result, cigar shipments have been delayed. 

“Container movements have been shut down,” said Jorge Padrón, of Padrón Cigars Inc. “They can’t move merchandise because there are roadblocks everywhere. There are barricades all over Nicaragua on the roads. It’s a huge problem to move things in and out.”

Drew Newman, general counsel for Tampa-based J.C. Newman Cigar Co., explains how shipping logistics normally work in Nicaragua.

“Cigars leaving Estelí generally travel north on the Pan-American Highway, cross the border into Honduras and leave via a port in Honduras,” Newman said. “Smaller shipments are sometimes driven to Managua where they depart via air. But air freight is equally difficult as well because the blockades around the Managua airport are preventing not only goods from getting to the airport, but also the workers who are needed to load the cargo.”

J.C. Newman Cigar Co. produces cigars at its PENSA factory in Estelí, Nicaragua. On average, it sends out a shipping container of premium cigars to the U.S. every week.

“Roadblocks have been delaying shipments,” Juan Martínez, president of Joya de Nicaragua, told Cigar Aficionado. "Some transport companies have not been able to bring trucks to Estelí. So, yes, some companies have suffered delays. In our case and many others, everything is being shipped by air and it’s happening also with delays. A truck can take up to two days to get to the airport [Augusto C. Sandino International Airport] and back. To be precise—shipments are happening with delays, but happening."

Cigarmaker and tobacco grower A.J. Fernandez is also experiencing difficulties, not just with outgoing shipments, but with employees getting to work as well as third-party collaborators from other companies.

“Many of our collaborators travel from places outside of Estelí,” Fernandez said. “At some point, due to the traffic jams and blockades by the protesters, they have not been able to reach our factory. It affects production and our ability to work together. Shipments have been delayed ranging from days to a few weeks, but we have not stopped sending to the U.S.”

Protests around the country erupted in April when President Daniel Ortega announced a tax increase and an overhaul to Nicaragua’s social security system. Most of the protesting took place in the capital city of Managua, but some of the violence spread to the cigar-making city of Estelí. 

For a while, the violence seemed to have died down and the premium cigar industry was not initially affected. Now, many reports have the death toll as high as 100 people, and the road barricades have disrupted the cigar industry’s ability to move product from factory to port. 

“The situation is very fluid and difficult right now,” added Newman. “Making matters worse, yesterday the president of the Trucking Association of Nicaragua (ATN), said that the large trucks that carry containers will not be operating in Nicaragua due to the lack of security for drivers and the fact that many drivers have been stuck on the Pan-American Highway for days.”

For the past two years, Nicaragua has been the largest supplier of premium cigars to the United States. Exports from Nicaragua grew steadily over the last decade. In 2017, Nicaragua exported 148 million premium cigars to the U.S.—more than any other country. 

Fernandez, whose company has helped to feed the U.S. appetite for Nicaraguan cigars, hopes for resolution soon: “We hope that all this will be solved in the shortest time possible, and normality will return to the country.”

Additional reporting by David Clough

Cano A. Ozgener, CAO Founder, Dies at 81

June 11, 2018

By: Charlie Minato - Halfwheel

Cano Aret Ozgener, the founder of CAO, passed away Saturday at the age of 81 following a long battle with cancer.

Ozgener was born in Istanbul in 1937, but moved to the U.S. in 1962 to attend Columbia University. He would study to become an engineer and worked for DuPont for nearly a decade. In the late 1960s he began selling modified pipes to friends and shops in Nashville.

In 1977, he would start C.A.O. as a pipe company. It would expand to include cigars, humidors, humidifiers and others, though the company wouldn’t have success with cigars until the mid-1990s.

The company’s cigars gained notoriety in the late 1990s with production moving from the Plasencia factory to Costa Rica to the Perdomo factory before eventually being made at CAO factories in Honduras and Nicaragua. While the factories had the CAO name, they were owned by the Toraño family and run by the Olivas family. CAO would also create a flavored line of cigars, called CAO Flavours, which would go onto be a massive commercial success.

In 2006, following a near-death experience while trying to treat cancer, Cano decided to sell CAO to Scandinavian Tobacco Group (STG). The deal was announced in early 2007, though Ozgener’s son, Tim, and their staff stayed. While the company had a new owner, STG wasn’t a large player in the American cigar market and as such, the operation remained in Nashville and looked largely the same as before, though the older Ozgener was less involved.

That changed in late 2010, when a merger between STG and Swedish Match’s cigar business was finalized. CAO was folded into the larger Swedish Match portfolio, which included General Cigar Co. and Cigars International. CAO’s Nashville operations were moved to Richmond, Va. and most of the staff, including Tim, would not move with the brand to General.

Cano and Tim founded OZ Arts Nashville in 2012 as a way to give back to Nashville. The family converted the former CAO headquarters into an art space for contemporary art. It not only conveyed the family’s bond to the city of Nashville but also Cano’s love of art. Since turning 70, Cano produced over 500 pieces of artwork.

“You always told me that in life there are two types of people: givers and takers. Well you were a great giver,” wrote Tim Ozgener on Facebook. “You gave to your family, your dearest friends, your city, and this country. Your hope to inspire other immigrants will and does not go unnoticed. Rest In Peace, dad – you changed and enriched the life of everyone who graced your presence – we all love you, always, and know that your soul will always be in each and every one of us.”

Ozgener is survived by his wife, Esen; his children Tim and Aylin; his sister and four grandchildren, all of whom were at his side upon his passing.

A celebration of life is planned for Sunday, June 24 at 3:14 p.m. Ozgener also had an affinity for pi. It will be held at OZ Arts Nashville.

Rocky Patel Defends Cigars on Fox News

March 20, 2018

By David Savona - Cigar Aficionado

Cigarmaker Rocky Patel appeared on "Tucker Carlson Tonight" on Monday evening. The Fox News show had a segment devoted to premium cigars, featuring a one-on-one interview between host Carlson and Patel, the owner of Rocky Patel Premium Cigars, which makes cigars in Honduras and Nicaragua. Patel, a tireless supporter of cigar rights, spoke about how the FDA is overregulating the cigar business. 

"Congress never intended premium cigars to be regulated," Patel told Carlson. "The FDA took it upon themselves to decide to [have a] one glove fits all size approach and start regulating the premium cigar industry. They didn't take the opportunity to investigate and understand the nature of the premium cigar industry."

Patel spoke about the nature of the premium cigar business, emphasizing how it is made up of many family owned businesses. "It's a cottage industry, a unique industry," he said. He compared cigar smoking to other adult pursuits, like drinking fine wine or premium Scotch. "You certainly don't see kids sitting around the schoolyard chain smoking cigars," he said. 

"These rules are so outrageous, they're so burdensome, they're impossible to comply with. It's basically de facto prohibition," he said. 

Carlson called the regulations "senseless."

Click here to view the entire video. 

Pathways to Growth for Tobacco Retailers

February 1, 2018

Learn the pathways to growth for tobacco retailers including educating employees and engaging customers through emails, social media and loyalty programs.

By: Tobacco Business 

The daily headlines might seem chock-full of both gloomy news and smug op-ed columns declaring the premium tobacco industry’s demise. While the industry is unquestionably changing, there are avenues that tobacconists can explore that might help them keep their profits rolling in, according to a panel of industry executives during the “Pathways to Growth” educational seminar at the 2018 Tobacco Plus Expo.The panel consisted of Rob Norris, the general manager at Altadis U.S.A.; Sam Morales, Drew Estate’s director of marketing; Justin Tarbell, senior vice president of strategy and business development for Ohserase Manufacturing; and Leonard Wortzel, vice president of marketing and product development for Scandinavian Tobacco Group/Lane Limited.
Panelists unanimously recommended that the best pathway to growth was educating employees on the products you sell and the lifestyles associated with them—and then making a commitment to engaging your customers through regular emails, social media platforms and a loyalty program.

Educating employees transforms your store from being just a commerce location into a trusted resource where customers make their purchases, rely on staff expertise and celebrate the lifestyle that accompanies premium tobacco products. A culture develops inside a store where customers feel a sense of belonging and become more enthusiastic about the products you sell. They not only want to make purchases at your store; they also want to spend some of their free time there.

Using digital media resources keeps those customers engaged in your business when they’re not in the store. Gather the email addresses of your customers through a customer loyalty program and use that database to send out regularly scheduled emails to the list of recipients. These emails, and the related social media posts, should not only announce deals but should also include interesting content that will remind customers of your store’s expertise. These emails and social media posts also reinforce the sense of community that surrounds your store.

While improving your efforts to engage your customers and educating your employees and empowering them to educate your customers are frontline tools that tobacconists can use to improve their business, participating in various manufacturer programs, such as the Drew Diplomat retailer program, can provide more attractive profit margins and access to exclusive benefits and products. These not only can add to your bottom line, but they can also increase your store’s reputation as being the area’s top premium tobacco retailer. Many manufacturers also offer services such as planograms to help retailers organize their stores better, or willingly share the market data they’ve gathered on top-selling products so that retailers can make better decisions on what products to sell.

While the industry is facing some of its most challenging years yet, tobacconists can still grow their businesses. According to the panel, all it takes is leveraging your product expertise and participating in partnership programs with your manufacturers. TB

 Story by Stephen A. Ross