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June/July
2002

TOBACCO INDUSTRY NEWS

Felipe Gregorio, Pöschl Tabak Sign Joint Venture Distributor to Focus on Luxury European Brands

Alexandria, VA - Phillip Wynne, president of Felipe Gregorio, Inc., a U.S.-based premium cigar maker, has finalized a joint venture with the third-generation German firm of Pöschl Tabak, effective July 1, 2002. Under the agreement, the two have created a new joint-venture distribution company, Felipe Gregorio Tobacco World. It will distribute the wide range of Pöschl products in the U.S., including cigars, roll- and make-your-own cigarette tobaccos, and pipe tobaccos, as well as a quickly-expanding line of other European boutique brands.

"This new joint venture," reports Wynne, "means we can fill the tobacconist's needs for products that compete with the finest distributors."

Wynne recently entered into a joint venture with J. Cortes, owned by the 3rd-generation vander Marliere tobacco family of Belgium, naming Felipe Gregorio Tobacco World the sole U.S. distributor for J. Cortes high-quality machine-made dry cigars, as well as Neos aromatic cigars and cigarillos.

"We now have a doorway to compete in the high-end cigarillo market with Davidoff, Agio, and others," says Wynne. "We also will work to develop the American market for European-style dried cigars. I believe we are moving into a new way for foreign-owned tobacco companies to penetrate the U.S. market. We'll see more U.S. distributors, and less U.S. branch offices of foreign manufacturers. Having U.S.-based distributors will streamline the communications between manufacturers and customers."

Wynne's first move into international product offerings came earlier this year, after signing an exclusive U.S. distribution contract with OneOff Cigars, an Italian premium cigar maker.

"My goal is to present to the U.S. retail market an array of family owned manufacturers who have a passion for their products and provide the highest standards in their field," says Wynne. "We are building a dynamic team, based on the fundamental principles of service, accessibility, and accountability."

The company's vice president of national sales, Micky Pegg, is responsible for all Felipe Gregorio cigars and Felipe Gregorio Tobacco World products, which also include Thomas Radford and Golden Blend pipe tobaccos, Thomas Radford pipes (made by Nording of Denmark), and Francesco Lionetti humidors.

Marshall George, formerly general manager of Georgetown Tobacco, will support the company's field activities.

Felipe Gregorio Tobacco World, 2385 South Dove St., Alexandria, VA 22314, Tel: (800) 336-1181, Fax: (703) 519-7323.


Philip Morris "Retail Leaders" Suit Dismissed

New York - A U.S. District Court Judge Greensboro, North Carolina dismissed a suit filed by R.J. Reynolds, B&W, and Lorillard, which claimed that Philip Morris's Retail Leaders merchandising program is exclusionary and creates an unreasonable restraint of trade. The plaintiff's suit, filed in March 1999, alleged that the program offers stores financial incentives to display its products and has unfairly shut out the three plaintiffs' ability to display their own products. In 1999 a temporary injunction was granted against PM, saying the company could not prevent retailers from accepting competitors' promotions. The trial had been scheduled to begin May 7th.

American Western Acquires Brands from National Cigar

Cincinatti, OH - As part of an ongoing expansion program, American Western Cigar Co. has acquired seven cigar lines from National Cigar Co., located in Frankfort, Ind. The Dry Slitz, Emerson, Oden, Van Dam, Lord Clinton, Budd, and YB cigars will now be manufactured and packaged by House of Windsor, a sister company of American Western based in Yoe, Penn.

The marketing of these brands will be handled through the distribution channels of American Western. The brands will retain the current blends, but will now be available to a broader market.

American Western Cigar Co., 2575 Queen City Avenue, Cincinnati, OH 45238, Tel: (800) 870-3128, Fax: (513) 662-8808, email: AWCC@fuse.net.


Agio Appoints Importers / Distributors for Balmoral

Tampa, FL - Agio Cigar Company has appointed Arango Cigar Co. and H.J. Bailey Co. as importers who will jointly be responsible for the sales and distribution of the company's Balmoral Royal Selection and Balmoral Dominican Selection in the U.S.

"Both Arango and Bailey have been distributing our products since we entered the market here," said David Salem, president of Agio Cigars USA, "and we are delighted that we have been able to make the changes in a manner that will maintain and improve our level of service to the trade."

Balmoral Royal Selection is a range of hand-made, long-filler premium cigars, manufactured by Agio Caribbean Tobacco Co. in San Pedro de Macoris, Dominican Republic. Balmoral Dominican Selection, also made in San Pedro de Macoris, is a new range of popular-priced premium cigars, available in four sizes from cigarillos to coronas, in convenient, easy to carry packaging.

Arango Cigar Co. in Northbrook, Ill. can be reached at (800) 222-4427. H.J. Bailey Co. in Neptune, N.J. can be reached at (800) 424-4277.


Music City Marketing Wins Flavored Cigar Suit

Nashville, TN - A Dade County, Florida jury has awarded damages of $306,000 and interest for the past four years to Nashville, Tennessee-based Music City Marketing in their suit concerning distribution of premium cigars. The verdict came in a lawsuit brought by Southern Wine and Spirits of Miami, Florida and Hubbard Imports, headquartered in Cerritos, Calif.

Among other things, the suit alleged Music City Marketing sold defective cigars from the El Sublimado and El Incomparable lines of cigars.

"We're happy there's finally resolution in this case. We knew we would be vindicated, we did nothing wrong," said Music City Marketing president J.T. Thompson.

Thompson said Music City Marketing would file a motion in the near future to recover attorney's fees as well.

According to Thompson, the award came in a jury trial in 11th Circuit Court in Miami before Judge Michael Genden. "In simple terms, Southern Wine and Spirits and Hubbard misused and infringed our trade mark and tried to affect our goodwill and reputation in the cigar industry," said Thompson.

Music City Marketing is a privately owned wholesale distributor of pipes, smoking accessories, and gifts.


General Cigar Rolls Out New Website, New Features

General Cigar Company has completely redesigned its web site, www.CigarWorld.com, improving the way it looks while incorporating many suggestions from users to create a destination geared for "all cigar smokers, from the most experienced veteran to those just starting out," the company says.

Visitors can find cigar events near them, such as this year's Macanudo American Passion Tour which features the traveling Macanudo bus, and find out when the tour will be coming to their neighborhood. Visitors can win free cigars and other prizes in contests, take trivia challenges, and locate hard-to-find premium cigars with the help of the "Where to Buy" section, which directs consumers to General Cigar retailers. Sections for cigar reviews and discussion forums allow visitors to interact with other cigar enthusiasts.

General says it will continue to roll out new site features in the next few months, including the Punch Photo "Wall of Fame," new brand additions, new games, and more exciting ways to win cigars and cigar accessories.



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