美国禁运如何影响古巴雪茄业？

Since 1962, imports of Cuban cigars have been banned throughout the United States. This ban was one of the many consequences of the embargo imposed by the U.S. government against Cuba. It is one of the longest unilateral sanctions ever enacted against a state, despite repeated condemnation from UN member countries.

The context of the embargo

The “embargo on all trade with Cuba” was decreed on February 3, 1962 by President John Fitzgerald Kennedy. It came in the context of the Cold War and following the decision by the Castro government to nationalize land holdings of more than 420 hectares. These nationalizations also affected American assets to the tune of approximately one billion dollars. A declassified 1991 U.S. State Department document reveals that the purpose of the embargo was to weaken Cuba’s economic life by refusing “to extend credit and supplies to Cuba in order to reduce real and monetary wages, with the objective of bringing about hunger, desperation and the overthrow of the government.”

At that time, the main Cuban products still imported into the United States were molasses, fresh fruits and vegetables, and tobacco. In 1960 alone, “approximately five million dollars’ worth of high-quality cigars were imported from Cuba.” With this decree taking effect, Cuban cigars were now banned. However, cigars rolled with Cuban tobacco and produced in other countries could still be legally imported into the United States, much to the frustration of American cigar producers, who themselves could no longer source Cuban tobacco.

The day before the decree took effect, JFK quietly asked White House press secretary Pierre Salinger to get him 1,200 H. Upmann Petit Upmanns. Salinger later reported that JFK did not sign the decree until he was certain that his request had been fulfilled.

The consequences of the embargo on the Cuban cigar trade

Before the embargo decree came into force, the United States and Spain were the world’s two main importers of Cuban cigars. According to Lopez Garcia, the former marketing director of Habanos S.A., the ban on exporting its cigars to the United States cost the Cuban state $540 million between 1964 and 1998. He adds that Cuba also had to spend more than $1 million on various advertising campaigns to promote the cigar industry in other countries. After the embargo, sales of Cuban cigars gradually shifted to Western European countries and the member states of the socialist bloc.

But the US sanctions decided against Cuba also impacted American cigar producers. After 1962, they could no longer source Cuban tobacco, while cigars made from Cuban tobacco but produced abroad were still legal on US soil. This situation deprived American manufacturers of about $27 million in annual imports of Cuban tobacco and led many factories to close, especially in the Tampa area of Florida. Following repeated complaints from the American Cigar Manufacturers Association, President Kennedy ultimately decided to extend the embargo to goods “manufactured or derived in whole or in part from any article that is the growth, production or manufacture of Cuba”.

The total ban on the sale of Cuban tobacco in the United States helped develop the domestic market, but also competing markets. After the nationalization of the land by the Castro government, many Cuban tobacco growers went into exile in neighboring countries such as Nicaragua and the Dominican Republic. Thanks to the embargo on Cuba, they were able to invest in a US market in strong demand. According to a recent report published by the Cigar Association of America “the United States imported 464.5 million premium cigars in 2022, an increase of 2.3% compared with 2021”. Nicaragua, the Dominican Republic and Honduras are the three main supplier countries, with 250.8 million, 128.9 million and 83 million cigars exported to the United States in 2022, respectively.

If these figures clearly show that the closure of the US market represents a very real loss of revenue for the Cuban cigar industry, they have not had the effect hoped for by the US government. In February 2023, Habanos S.A. indeed announced a 2% increase in Cuban cigar sales for 2022, for a record turnover of $545 million. According to Jorge Luis Fernandez Maique, commercial vice president of Habanos S.A, Cuban cigars “currently hold market shares on a global scale of around 70% in volume (by number of units sold) and 80% in value (by turnover generated)” in the premium category.

Europe is still Habanos S.A.’s main market, accounting for 53.7% of total sales value, followed by Asia-Pacific (19.3%), the Americas (15.3%), and Africa and the Middle East (11.7%). But it is now China that ranks first among the world’s importing countries for Cuban cigars. According to Wang Zheng, a Chinese specialist in habanos, the appeal of Cuban cigars for the Chinese lies in their quality and prestige, but also in their origin. According to him, the Chinese are more willing to consume luxury products from socialist countries than they would be with Western products. The US embargo has therefore produced contradictory effects, on the one hand causing Habanos S.A. to lose market share, and on the other enabling it to conquer new markets.

Toward the lifting of the embargo?

Despite the almost unanimous condemnations from UN member states for more than thirty years, the United States has always refused to lift the embargo on Cuba. In 2014, under Barack Obama’s presidency, the United States adopted for the first time measures aimed at easing the embargo by publishing “a list of goods and services produced by independent Cuban entrepreneurs that may be imported into the United States.” Cuban cigars and alcohol do not appear on this list, but American tourists are now allowed to bring back the equivalent of $100 worth of Cuban rum and cigars to US soil. That same year, the US Supreme Court finally gave Cubatabaco the right to challenge General Cigar’s filing of the Cohiba trademark in the United States.

In 2017, relations between Cuba and the United States cooled once again with Donald Trump’s decision to close the American consulate in Cuba. But in March 2022, the reopening of this consulate by the Biden administration once again signaled a desire to “normalize relations with Cuba,” albeit only to a limited extent. According to Mr. Fernandez Maique, lifting the embargo could allow Cuba to export “at least $250 million worth of cigars per year to the United States” and to “capture 25 to 30% of the American market, which accounts for two-thirds of global sales.” But for the time being, this embargo is still in force, and Cuba estimates the accumulated damage to its economy at around $150 billion since 1962.