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April,
2004

TOBACCO INDUSTRY NEWS

Cuba’s Cigar Company Wins Order Blocking U.S. Cohiba
General Cigar to Appeal Decision in Loss of Trademark Rights


NEW YORK-A judge in New York ruled on March 29 in favor of Cuban-government owned Cubatabaco in its lawsuit against General Cigar over trademark ownership of the Cohiba brand in the United States.

General Cigar, which manufactures the Cohiba brand in the Dominican Republic and markets it in the U.S., vowed to defend its rights and immediately appealed the ruling.

“We are obviously disappointed in the judge’s ruling,” said Edgar M. Cullman, Jr., president and c.e.o. of General Cigar. “Based on our long-standing U.S. registration of the Cohiba brand and Cubatabaco’s acquiescence for almost two decades, we marketed this brand with the confidence that we owned the mark. We intend to appeal this decision and feel confident that it will be overturned.”

General Cigar received its first registration of the Cohiba trademark in the United States in 1981, and obtained an updated registration in 1995. The company has been selling its Dominican Cohiba cigar in the U.S. for over two decades.

“Obviously, the right to reclaim our mark is very important to us,” said Kevin Walsh, the lawyer for Cubatabaco, which is also seeking undetermined damages from Swedish Match, the majority owner of General Cigar Co.

Cubatabaco filed the lawsuit in 1997 against General Cigar, claiming rights to the Cohiba name in the United States under U.S. law and international treaties, although Cubatabaco had failed to take any legal action against General Cigar for nearly 20 years.


Republic Group Acquires 49% of HTH Tabak B.V.

GLENVIEW, ILL.-Republic Tobacco L.P.’s affiliate, D.T. Tech (Spain S.L.) has purchased a 49% share of the Netherlands-based tobacco manufacturer H.T.H Tabak B.V. Founded in January 2003 at Denekamp, H.T.H. Tabak - also known as Holland Tobacco House - manufactures branded and private-label cigarettes, roll-your-own tobaccos, snuff, chewing tobacco, cigar filler, and pipe tobacco.

The acquisition reinforces Republic Group’s position as a prominent and creative force in the changing European market. Other affiliate holdings include Republic Technologies in Perpignan, France, manufacturer of cigarette papers including Job, OCB and Zig Zag; filter tubes and tips manufacturer Altesse Zigeretenpapier GmbH, in Furstenfeld, Austria; and Productos Technologicos Catalanes, a manufacturer of cigarette injectors and specialty items, in Barcelona, Spain.

“The healthy growth of the RYO and MYO tobacco categories in the past few years is very encouraging,” stated Republic chairman, Donald R. Levin. “We expect growth to continue and that the European market will take on new and exciting dimensions. Our group looks forward to continued expansion and investment in the European market,” Levin added.

The Republic Group also includes Top Tobacco L.P., the U.S.’s largest roll-your-own tobacco manufacturer located in North Carolina and Republic Tobacco L.P., the U.S. headquarters, distribution and marketing arm based in Glenview, Ill.


‘Herfboard’ Debuts on Cigarworld.com

NEW YORK—General Cigar Co. has launched what it calls the “first-ever, cigar-only event planning application online,” or simply, “herfboard” on its website at cigarworld.com.

Herfing, a colloquial term for social gatherings of cigar enthusiasts to enjoy cigars at store lounges, restaurants, and cigar bars, has gained in popularity in recent years thanks to informal postings on online message boards. General Cigar has taken the concept one step further with its “herfboard,” an online herf-planning application which enables enthusiasts to plan, publicize, and manage their own cigar events. It features a design gallery where consumers can create and send their own herf invitations. It will also track responses to those invitations.

Consumers specify the herf’s date, provide a brief description, enter a herf location (of their own, or one from Cigarworld’s cigar-friendly location finder), enter their guests’ e-mail addresses, and personalize the invitation by using one of the pre-formatted e-card designs. Once a herf been planned and registered, the details are posted both on Cigarworld’s discussion board and on the site’s searchable herf event listing page. Fellow smokers can search for a herf to attend by date and/or location.

“In the current environment of ever-increasing smoking restrictions, the ‘herfboard’ helps cigar smokers find cigar-friendly places to get together and enjoy a good cigar,”said Bill Chilian, Internet marketing director for General Cigar. General Cigar’s herfboard also includes additional functions, such as directional maps, an event-posting board, and a user-friendly photo gallery.


UST Settles Swedish Match Antitrust Claims
In $200 million Settlement, U.S. Cigar Sales Unit Will be Transferred to Swedish Match


GREENWICH, CT—U.S. Cigar sales will soon have the same corporate owner as New York-based General Cigar Co.

UST Inc. reached an agreement in March in a civil suit brought by Swedish Match North America Inc. against its U.S. Smokeless Tobacco Company (USSTC) subsidiary and other affiliated companies alleging damages under antitrust laws. Under terms of the agreement, UST will pay $200 million and will transfer its cigar business, Tampa-based U.S. Cigar Sales, to Swedish Match. U.S. Cigar Sales owns and operates a premium factory in Danlí, Honduras, producing and marketing the Don Tomas, Astral, and Helix brands, among others.

UST said in a statement that the transaction will allow the company to focus on growing the smokeless tobacco category. UST Inc. is a holding company for its principal subsidiaries - U.S. Smokeless Tobacco Co., producer and marketer of moist smokeless tobacco products including Copenhagen, Skoal, Rooster, and Red Seal; and International Wine & Spirits Ltd.

“We believe that USSTC and Swedish Match share a common interest in helping to advance the interests of the smokeless tobacco industry, particularly in light of the debate regarding the role that smokeless tobacco can play in a comprehensive tobacco harm reduction strategy,” said Vincent A. Gierer Jr., UST’s chairman and chief executive officer.

UST said it also recorded a charge of $40 million to resolve claims from consumers or “indirect purchasers.”


Brooklyn Native Wins La Gloria Cigar Rolling Contest

Pictured (L to R): Front row (kneeling): Leo Peraza, master roller, El Credito; Jermaine Gurvin, marketing coordinator, General Cigar; Anthony Santiago, Bloomfield, N.J.; Super Roll champion Ludwig Bauer, Brooklyn, N.Y.; Robert Ferreiro, tobacco supervisor, El Credito. Back row (standing): Gabriel Miranda, operations manager, El Credito; Gene Baker, Grand Rapids, Mi.; Zane Wright, San Antonio, Texas; third-place winner Steve Lawson, Las Vegas, N.V.; Dale Gospodarek, Vinton, Va.; Ernesto Perez-Carrillo, cigar master, El Credito; David Krantz, New York, N.Y.; second-place winner Clair Meske, Riverside, Calif; Chris Corec, Galloway, N.J.; Lee Blankenship, Nashville, Tenn.; and Michael Giannini, director of marketing, El Credito.
MIAMI, FL—The El Credito Cigar Company hosted ten finalists in the second annual La Gloria Cubana Super Roll cigar rolling championships, held January 22nd–26th at the El Credito Cigar Factory in Miami’s Little Havana district. The title of “2004 Super Roll Champion” was captured by Ludwig Bauer, a life-long resident of Brooklyn, N.Y.

Throughout 2003, hundreds of cigar enthusiasts from across the country competed to qualify for the Super Roll finals. The ten finalists who were chosen were given individual cigar rolling instructions from La Gloria Cubana cigar rollers before competing in the playoffs. Each finalist earned a box of La Gloria Cubana cigars with a personalized name band, in addition to a selection of cigars and accessories from La Gloria Cubana Cigars.

Cigar Master of La Gloria Cubana cigars, Ernesto Perez-Carrillo, awarded the grand prize to Bauer, who was inducted into the El Credito Cigar Factory’s Hall of Fame on January 25, 2004. To commemorate his victory, Bauer received the Golden Chaveta Award, made from a Vintage 1960s era El Credito Cigar Factory mold. Another Golden Chaveta Award inscribed with Bauer’s name will remain on display at the El Credito cigar factory.

As the grand prize winner, Bauer also won a handmade Italian humidor filled with 100 La Gloria Cubana cigars customized with a “Super Roll Champion” band. In tribute to his most staunch competitor, Bauer made arrangements to give half of his “Super Roll Champion” cigars to Clair Meske of Riverside, Calif., the competition’s second-place winner.

“I cannot believe how well these guys rolled cigars after one day’s worth of training. It takes years to learn how to roll cigars this well. Since La Gloria Cubana cigars are even more difficult to roll than the average cigar, it’s evident to me that these guys really became pros in one weekend,” he said of all of the contestants.



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