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Nov/Dec
2002
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TOBACCO INDUSTRY NEWS
American Western Prevails in Trademark Disputes
Cincinnati, OH - A lengthy legal battle over trademark rights to the cigar brands Celestino Vega, Rum Runner, Island Amaretto, and West Indies Vanilla came to a conclusion on July 15, 2002 when United States District Court Judge Susan J. Dlott signed an order declaring American Western, Inc. the rightful and legal owner of the trademarks.
The judicial order arose out of a lawsuit over the trademarks initiated by Knoxville, Tenn.-based SJI Wholesale, Inc., the former owner and distributor of the brands which is now in bankruptcy. The order reaffirms Judge Dlott's earlier findings in favor of American Western, said Daniel J. Donnellon, attorney for American Western in the Cincinnati, Ohio trademark suit.
The Judge's decision gives American Western the exclusive right to use the trade names and trademarks Celestino Vega, Rum Runner, Island Amaretto, and West Indies Vanilla for cigars, tobacco products, and related accessories in commerce in the United States.
In connection with the order and other bankruptcy proceedings, American Western has also acquired SJI Wholesale's rights to additional trademarks and trade names including Calle Ocho, Free Cuba, and Signature Collection, all former premium cigar brands of the former Caribbean Cigar Co.
For additional information, contact American Western, Inc., Cincinnati, Ohio, Tel: (513) 662-8802 or toll-free at (800) 870-3128.
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Toraño Inks Sales Agreement for Spanish Market
Miami - Toraño Cigars has signed an agreement with WorldTobacco, a Spanish promotional firm, to sell its premium cigars into that country, continuing its penetration of international markets.
In Spain, the second largest cigar market in the world, distributors " although traditionally part of the commercial process " do not promote the product. Instead, they limit themselves to its physical distribution, once another firm has actively promoted it. "We have a very strong relationship with both our distributor, McLane Espa-a S.A., and our promotional company, WorldTobacco," states Toraño.
Under an exclusive sales agreement, WorldTobacco sells only Toraño cigars in Spain, and is presently focusing its efforts on the Reserva Selecta and Carlos Toraño Nicaragua Selection lines. The company, headquartered in Madrid, is headed by Jose Manuel Correa. Ten full-time salesmen cover the entire country.
"Our family's company has made a huge investment to establish our name in Spain," reports Toraño, "but it is already bringing in returns that exceeded our expectations."
The association with WorldTobacco became effective last January, and is fully operational now, with product, distribution, and a sales force in place.
"Our family weathered the slow period," reports Toraño, "and is now emerging as one of the leading brands of boutique cigars in the United States. We are especially gratified to see the same acceptance for our premium cigars by European cigar lovers."
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American Western Cigar, House of Windsor
Open New Western Sales Division
Cincinnati, OH - American Western Cigar Co. (AWC) and House of Windsor begin serving the western part of the country through its new satellite office in Custer, Washington as of October 1, 2002,
"This move will help us serve the Western Region customers more effectively as we continue to increase distribution," says Alfred Berger, president of AWC. This new sales division will be managed by Renee Wagner, newly appointed for the western region, and will be opened from 8:30 a.m. to 5:30 p.m., Pacific Standard Time.
American Western Cigar/House of Windsor now has three strategic locations across the country. For more information, retailers may call 1-800-237-4715 (Eastern Division/ factory), 1-800-870-3128 (Midwest Division/corporate offices), or 1-866-602-4427 (new Western Division).
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Comprehensive Private Brand Program from Tropical Tobacco
Miami - Tropical Tobacco, Inc, has introduced what it calls the industry's most ambitious and comprehensive private-brand cigar program, which encourages retailers to design their own private brand cigars and packaging. A full-color, 16-page catalog, describing the "Private Brand Kit" was released to the trade at the 2002 RTDA show.
The kit concept allows customers to select from 20 variations of three different wrapper tobaccos: Nicaraguan shade- and sun-grown Connecticut; Criollo 98; and Corojo 99. Cuban expatriate Pedro Martin, a 60-year veteran of the industry and master blender, has created two blends, depending upon which wrapper the customer chooses. "With so many wrapper and blend combinations, we could provide 15 tobacconists in the same city with private brands, and no two would be the same," says Martin's daughter Maria Martin, sales and marketing manager for Tropical. "Our customers will love the quality and flavor of these blends."
The broad scope of the program also allows customers to choose from six classic shapes: Toro, Robusto, Churchill, Corona, Torpedo, and an 8 1/2 x 52 Viajante. Packaging options are equally varied. "The customer can choose from 58 different die-cut bands," states Ms. Martin, "and has every color of the rainbow available, as well as embossed and foil bands. They can provide us with their artwork, or our graphics house can design the artwork for them."
The choice of boxes is also extensive, and encompasses 25 different shapes, sizes, and designs. Most are cedar, and include different finishes, gift packs, Cuban edge-taping, acrylic see-through lids, and more. The company can also stamp the customer's name and logo on the boxes.
The program was facilitated by Tropical's recent merger with Aganorsa, one of the largest tobacco growers in Central America. The company is a manufacturer of premium cigars in Esteli, Nicaragua. This alliance gives Tropical Tobacco access to some of the finest tobacco Nicaragua has to offer. "Aganorsa has several large farms in Esteli and the Jalapa Valley," explains Paul Palmer, vice president and a principal at Tropical, "and this provides us with the many variations in color and flavor that this program offers. The factory has a current production capacity of 40,000 premium cigars a day, so we can fill any customer's needs."
Palmer estimates the average wholesale cost for each box of Tropical's private brand cigars at $25 to $30, including 25 cigars, bands, and boxes. Private brands are also available in bundles, at a slightly lower price. Minimum initial order is 40 boxes or bundles, with lower quantities accepted in subsequent orders. Customers can expect a two -month turnaround from the time of order to shipment.
Tropical Tobacco, Inc., Miami, FL 33122, Tel: (800) 826-7030, Fax: (305) 592-3735,
Web: www.tropical tobacco.com.
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United Pipe Clubs of America (UPCA) Debuts
New York - In an effort to promote pipe smoking and represent U.S-based pipe clubs in the leading international pipe organization, several pipe clubs have formed the United Pipe Clubs of America (UPCA).
A prime goal of this new, not-for-profit social organization will be gaining membership in the Comité International des Pipe Clubs (CIPC), says UPCA acting secretary David Bull. As the first national federation representing U.S. pipe clubs, UPCA would then sponsor U.S. teams to participate in international smoking competitions.
The organization will also promote the hobby of pipe smoking, publicize pipe-related events, encourage the formation of local and regional pipe clubs in the U.S., and serve as a liaison between domestic and foreign pipe clubs. UPCA will also seek to promote interest in the art of pipe making by commercial entities, individual carvers, and artisans.
The founding member pipe clubs are The New York Pipe Club, Christopher Morley Pipe Club of Philadelphia, The Chesapeake Pipe Club, Capital Area Pipe Smokers (CAPS), Pocono Intermountain Pipe Enclave (PIPE), and Hudson Valley Pipe Club Exchange.
Membership is targeted primarily to organized pipe clubs in the U.S., with associate memberships available to commercial companies.
UPCA will make its public debut at the 2003 Chicagoland International Pipe & Tobacciana Show, sponsoring the first U.S.-based international pipe smoking competition under international CIPC rules. The event will be held on May 18, 2003.
UPCA, Email: pipes@unitedpipeclubs.org, Web: at www.unitedpipeclubs.org.
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CORPORATE BRIEFS
Star Posts $1.64m Q2 Loss
Chester, VA - Star Scientific, Inc. reported sales of $37.2 million in the second fiscal quarter, a $3.68 million increase from the first quarter. Operating expenses increased during the same period, from $7.46 million in the first quarter to $9.51 million, resulting in net income loss of $1.64 million. Christopher G. Miller, Star's c.f.o., attributed the loss largely to investments in the national distribution and marketing of the company's Ariva smokeless tobacco bits. Also cited was a decline in discount cigarette sales, due to the company's decision to concentrate sales efforts in the four non-MSA states, and intensified price competition, particularly from foreign manufacturers in those states.
UST Q3 Earnings Up 5%
UST Inc. announced that third quarter 2002 net sales increased 10.8 percent to $451.3 million, net earnings increased 5.1 percent to $130.5 million, and diluted earnings per share increased 2.7 percent to $.77 compared to the corresponding 2001 period. Smokeless Tobacco segment third quarter 2002 revenue increased 10.9 percent to $387.4 million and operating profit increased 8.2 percent to $224.2 million, compared to the year-ago quarter. Moist smokeless tobacco net can sales in the third quarter increased 8.0 percent to $170.8 million.
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SMOKESHOP - Oct/Nov 2002
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