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TOBACCO BUSINESS INTERNATIONAL
MARCH/APRIL 2015
see it lasting even a year.”
Vitale adds, “But for some
manufacturers, if they don’t prepare
correctly, it could affect them negatively
for the long term.”
Retail Reality
On the retail side, Butt Hut of
America, based in Toledo, Ohio with six
stores, is one tobacco retailer in a state
of happy Cuban anticipation, according
to Don Stienecker, vice president of
operations. “A lifted embargo will make a
big difference to the industry and to us,”
he tells
TBI
. “With the Cuban name on
them—cigars we haven’t been able to get
since the ’60s—oh yeah, we’re going to
carry them!” And that’s what Butt Hut
has been relaying to customers who have
been buzzing about them.
“There are discussions being brought
up in our stores that if Cubans are allowed
freely back in[to] the U.S., are we going
to buy into them, and we’re quick to tell
them, ‘Absolutely,’” Stienecker relays.
In fact, Butt Hut has already begun
imagining how it will reconfigure its
stores to accommodate an expected
expanded inventory. “All of our stores
with humidors will be expanded—we
can knock a wall out and grow them
larger. It’s just like moving a cubicle—
we can expand them depending on the
market demand,” he says. “It will start
off at a low percentage of our cigar
mix and then performance will decide
what space they’ll ultimately get.
Every inch of our store is for sale; we
use our systems to judge and change
our product mix quarterly.”
Of course, the Internet will also add
a new level of competition for U.S.
retailers in the Cuban cigar market
should the embargo be lifted. While
they may experience an initial rush of
consumers knocking on their doors
looking for Cubans, retailers may find it
to be very short-lived once the Internet
opportunities for Cubans expand.
Industry experts advise tobacco
retailers to think about establishing
themselves as “authentic Cuban cigar
purveyors,” with corresponding plaques
and certificates posted on their walls as a
way to effectively compete and stand out
as legitimate. If and when the shipping
of Cuban cigars into the U.S. becomes a
reality, the corresponding black market
is expected to take off like a speedboat.
TBI