One big problem that would be caused by lifting the Cuban embargo is not a problem

[jmowreader]

We on this board have discussed the atrocity that is the Cuban embargo and, rightly, feel it should be lifted. Of course, one of the first questions that comes up is, "what about the Cuban cigar problem?"

In the very early days of the Castro regime, as we are aware, all the capitalists in Cuba hauled ass--especially the cigar barons. They took what they needed, mainly Cuban tobacco seed, to go back into business in Honduras or the Dominican Republic, and they took their brands with them. Now you've got a Por Larranaga that's made by Habanos SA in Cuba and one that's made by Altadis in Honduras. You've got a Romeo y Julieta that's made by Habanos SA, and one made in the Dominican Republic.

It turns out there are three major players in the world cigar industry: Habanos SA, which is the Cuban cigar monopoly; Alliance Tpbacco Distribution SA (ALTADIS) from Spain; and Swedish Match, which is based out of Sweden. (It is working now to create a Scandinavian tobacco conglomerate.) And Altadis owns half of Habanos SA.

What will probably happen if the embargo is lifted: The Scandinavian tobacco people will purchase the other half of Habanos SA and they'll run it as a joint venture. They'll then divide the cigar industry into "single-source" and "double-source" brands. A single-source brand is either an Island Cigar or not an Island Cigar. For instance, Macanudo has never been an Island Cigar--it was introduced in the 1960s. Double-source cigars are ones that started out as Cubans but were liberated during the first days of the Castro Regime. Punch is one. Double-source cigars will add the Cubans to the line: in the Punch brand, there will be Punch, Punch Deluxe, Punch Grand Cru, Punch Grand Puro, Punch Rare Corojo and Punch Habanos.