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Editorial: Lifting The Gates: The Good, Bad, and Ugly of Ending the Embargo

Since the current White House resident announced December 17 his plan to open doors to lift the Cuban Embargo the cigar world has been buzzing. There have been grumbles of everything from “finally we can get Cubans” to “there goes the industry.” One thing that we all need to consider is that the cigar industry is not the only industry that will be impacted and that not all impacts on the cigar industry will be positive at this time. Let’s break this down and take a look and some possible “side effects” of the embargo being lifted.

The Good

There are many positive factors surrounding the lifting of the embargo. Yes, we may be able to legally acquire Cuban cigars and other products in the U.S. More than cigars I am looking forward to Cuban coffee and rum. This also has the possibility to have a good impact on the economy of Cuba. There will undoubtedly be a large influx of money that will flow into the Cuban economy just in tourism alone. Sure, Canadians and Europeans have known Cuba as a vacation hot spot for years, but today’s generation of American has little to no knowledge of Cuban travel. Cuba is a country full of culture and lively with a population of people who are welcoming. Cuba has an old world charm that I for one cannot wait to experience. With the ability to purchase Cuban goods in the United States will mean that we will see blends of Cuban and Central American tobaccos on the shelves. Now, do not kid yourself and think that all those “Cuban” cigars are puros, there is plenty of tobacco from other countries going into those. What excites me more is the possibility of seeing what some of the blenders and manufacturers in Central America are able to do with even more tobacco at hand. Another key area that the lifting would be good for is the FDA. It would look awful bad for the government to lift an embargo on a country that has a large export of tobacco only to hurt that export by heavily regulating it. This may, and it is a stretch, but may help sway some opinion with the FDA. It all depends on how the critters in D.C. decide to play the politics of it.

The Bad

With the embargo lifted the call for Cuban cigars will eventually reach a level that Habanos S.A. will be unable to keep up with. The production quality is already suffering and struggling to keep up with European and black market demands as it is. If you think there are too many cigars plugged from that box of Cubans now, just wait. With the demand for Cuban tobacco we will also see a decrease in the quality of the tobacco from Cuba. As they work hard to keep up they will be pushing out lower quality leaf that is grown in soil that has not had time to regenerate and quantity will be the key. As the demand for Cuban cigars goes nuts, and it will until the newness wears off, the market for Central American cigars will suffer, thus meaning losses for those companies that have been supplying us all this time. The boutique companies that employ small numbers of people and rely heavily on loyal customer support will struggle. The trickle down effect will eventually reach the retailers and they could see their bread and butter lines producing less cash flow to keep them afloat. Counterfeit cigars will start popping up all over, more so than now. There will be fauxhibas to be found in all corners of the country.

The Ugly

As I look at this possible lifting of the embargo I ask myself why? Why now? What changed? This could be purely political move by a failing administration that is trying anything at all to gain some glory without regard to the entire political situation in Cuba . There are so many people that are killed every year at the hands of the communist regime in Cuba, these are those who speak out about the tyranny, those who may be suspected of planning a coup. Raul Castro, the current leader of Cuba and brother of Fidel, is supposedly one of the most violent and vile of the whole regime. This man is not having any change of heart in old age, he is also not about to step down from his power and allow a democracy of the people in. By lifting the embargo and pushing more money into Cuba we are not supporting those who are dirt poor and making $12 a week, we are making the Cuban government rich. The government owns everything in the communist country. They manage every aspect of the citizens of Cuba’s life, even groceries that people receive. Even as we look at this from just a cigar stand point, Habanos S.A. is the government owned corporation that owns every Cuban cigar brand and every factory. The government stole ownership from the private companies who built the brands and made the traditions and took them over. After all in a communist country no one can have any power, everyone must rely on the government for everything.

As we step back and look at the possibility of the Cuban embargo being lifted, our excitement must look at the whole picture. There are so many lives that will be affected, so many livelihoods at stake, a large amount to win or lose. I hope that we are able to see through the smoke and evaluate the good, the bad, and the ugly.

Click here for the news story.

Brandon K.

brandon@thecigarnut.com

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