Mid­dle-class cre­ates red-hot mar­ket for cigars

China Daily (USA) - - TOP NEWS - By ZHU WENQIAN zhuwen­qian@chi­nadaily.com.cn Emma Gon­za­lez con­trib­uted to this story.

Sales of Cuban cigars are ris­ing in China thanks to a bur­geon­ing mid­dle-class who are wealth­ier and more con­cerned about qual­ity of life.

Ha­banos SA, the global to­bacco dis­trib­u­tor that con­trols Cuba’s cigar in­dus­try, said China is now its third­largest mar­ket af­ter Spain and France— and it still has sig­nif­i­cant growth po­ten­tial.

The com­pany, which started sell­ing its prod­ucts in China in 2000, ex­ported 300,000 units of cigars to the coun­try in 2014, up by 9 per­cent on 2013. The rise in Chi­nese out­bound tourists means more are buy­ing the cigars abroad, too.

Ha­banos said more cigars could be shipped to China, but the stor­age re­quire­ments limit the num­ber that can be sold.

“Peo­ple from smaller Chi­nese ci­ties and re­mote ar­eas are con­tact­ing us, as they are in­ter­ested in open­ing cigar bars, but those places may not have the cli­mate-con­trolled fa­cil­i­ties to store cigars,” said OmarLeon Sanchez, Ha­banos’ chief rep­re­sen­ta­tive in Bei­jing.

Un­like cig­a­rettes, cigars need to be stored at 18Cand in 70 per­cent hu­mid­ity, which can be ex­pen­sive for small re­tail­ers.

In China, cigars were tra­di­tion­ally lux­ury prod­ucts pur­chased by af­flu­ent mid­dleaged con­sumers. But as smaller, cheaper va­ri­eties have hit the mar­ket, cigars have be­come af­ford­able to a wider range of con­sumers, ac­cord­ing to Euromon­i­tor In­ter­na­tional.

De­spite the gov­ern­ment’s aus­ter­ity drive and anti-graft cam­paign, and a slow­ing econ­omy, sales of cigars have re­mained steady. New con­sumers in­clude young Chi­nese busi­ness­men, par­tic­u­larly those aged 25 to 35. A va­ri­ety of hand­made Cuban brands are pop­u­lar in China, such as Co­hiba, Romeo y Juli­eta, Mon­te­cristo, Bo­li­var and Parta­gas, with prices rang­ing from 500 to 5,000 yuan ($75 to $750) a box.

Shang­hai is the big­gest mar­ket, con­sum­ing about half of all cigars im­ported from Cuba and the Do­mini­can Repub­lic. Many cigar lounges have also opened in af­flu­ent ci­ties like Bei­jing, Shen­zhen and Guangzhou.

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