Tobacco Manufacturers Impacted by Unrest in Nicaragua

Nicaragua Protests Rock Tobacco and Cigar Industry

For many tobacco businesses, Nicaragua is not only the location of tobacco farms and factories but it’s also home. This past week, Nicaragua found itself engulfed in an uprising as protestors have challenged Nicaragua’s President Daniel Ortega and a series of legislative and government changes that have caused and uproar within one of the most important countries in the tobacco world.

Protests have rocked Nicaragua for much of April 2018, beginning in Managua and spreading to other cities in the country. Calls for Ortega’s resignation have come from many after he issued a degree on April 16, calling for an increase in social security taxes and a cut in benefits. People were outraged to find they would be paying more and getting less from the government, leading to a revolt and protests and nearly 38 deaths. Ortega has come under fire before, including his treatment and protection of Robert Rivas–Nicaragua’s supreme electoral council president–who was accused by the U.S. Treasury of making a questionably large amount of money while on the government’s payroll. Ortega defended and protected Rivas, keeping his position and job safe and supporting a reform of the electoral laws though it went against what various citizen-run groups and other lawmakers wanted.

Ortega’s government has also drawn ire from its citizens for potentially seeking to censor its citizens by reviewing the use of different social media networks. The government also initially turned down foreign help in fighting a wildfire that destroyed 7,000 hectares of an area classified as a bio-reserve. His recent recommendation of changes and reform to Nicaragua’s pension plan has sparked outrage among the country’s citizens to the point of pushing many to protests, causing the country to witness change and a revolution it hasn’t seen since the 1990’s civil war. It should be noted that protestors aren’t just Ortega’s opponents–many of them are also members of his own political party.

In the face of sweeping changes, many tobacco companies based in Nicaragua have found themselves in the middle of the protests and witnessing a country they call and consider home transform before their eyes.

Juan Martínez, executive president of Joya de Nicaragua, commented on social media about the protests and its impact on Joya’s employees and business:

“Just as volcanoes and earthquakes have shaped the physical landscape here, social hardships and the path to overcoming them have shaped our society. In recent days, Nicaragua has been shaken, including our beloved city Estelí.

Thankfully, our people and their families are safe. We have not and will not stop making cigars, in order to guarantee the livelihood of all the families in Estelí and in other parts of the country.

One thing prevails, and that is the unity and spirit of the Nicaraguan people. Thank you for your support, and please stand with us as we forge our path to a new and better Nicaragua.”

Jonathan Drew, a strong proponent of Nicaragua’s people and its tobacco industry and the president and founder of Drew Estate, also commented on social media about the turmoil engulfing the country:

“Let’s all send our prayers and deepest heart felt thoughts to all of the people in Nicaragua, who are going thru the worst turbulence in recent times. We love you and wish you safety. Praying that things will be resolved soon in every district of the country. We love you Nicaragua!”

As citizens protested against the changes, the country saw contributions by workers and employers into the social security system increase. Pensions of retired workers also were reduced. Protests and unrest has since decreased following President Ortega rolling back the controversial pension reform resolution on April 22.

For more on the unrest in Nicaragua, click here for an in-depth article from the Bloomberg outlining the events that led to the protests.