Issue link: http://read.dmtmag.com/i/550307
38 tobaccoasia for more than 90% of the total sales of premium products in China. On the other hand, Habanos says that China has already replaced Germany to become the third largest consumer of Cuban cigars worldwide. An illustration of the changing attitude to ci- gars at the manufacturing level was demonstrated some years ago when China Tobacco Chuanyu, the current market leader, decided to rebuild the Great Wall cigar factory after it was badly damaged in the devastating earthquake that hit southwest China in May 2008. According to a story in the China Eco- nomic Review, Chuanyu spent €85 million on the plant and, in doing so, pushed the plant's capacity from 300 million annually to 2 billion cigar sticks. The new factory included some of the latest technologies introduced as part of co-operative ventures with Western companies, which also worked on projects related to raw material supply, new product development and building distribu- tion networks. But perhaps of even greater sig- nificance was the technical assistance provided by Altadis in relation to hand-made products, which included everything from cigar raw material stor- age and manufacturing all the way to final product conception. And, obviously, it isn't only the Great Wall fac- tory that has taken to hand-made cigars. The sec- ond festival staged by Cigar Ambassador included a cigar blending and rolling contest between par- ticipants from each of the four cigar factories. And during the Yellow Crane Tower gala dinner, China Tobacco Hubei introduced its Duke cigar, which was described by China Ambassador as being beautifully presented, elegant, and offering a pleas- ant aroma and perfect ash. But there are clearly some ways to go. The de- scription went on to say that the new product's filler perhaps needed to be a little more spicy and strong, the wrapper, perhaps, needed to be sub- jected to a little more fermentation, and, overall, the product needed to be a little more weighty. It is important not to get carried away here. Ci- gar smoking can be faddish even in countries with a cigar culture. Put the images of a celebrity or two smoking cigars on the front pages of glossy maga- zines and you're going to cause a blip on the sales graph. It also has to be borne in mind that high im- port tariffs and restrictive quotas mean that there are only a limited number of premium brands on the market, which, in turn, means that smokers are sometimes tempted to source their cigars abroad, through the Internet or even on the black market. And it cannot be forgotten that China now has a reasonably active anti-tobacco lobby that is starting to push for enforcement of public-places smoking bans. Such bans are normally aimed at cigarettes, but, of course, they sweep up cigars on the way. On the other hand, there are some factors in China suggesting that interest in cigars might continue for some time. An obvious one is the continuing high rate of growth in the numbers of people who can afford premium cigars, even given the high tariffs. Jin mentioned that accord- ing to China's official estimates, which are based on the existing quotas, Habanos account for 55% of China's volume cigar imports (though Imperial Tobacco puts this figure at more than 70%) under a long-standing contract with China, which allows Habanos to export specific sizes and brands of Cu- ban cigars to China and Hong Kong. An interesting byproduct of anti-smoking mea- sures has been the fact that in China cigarettes are often perceived as being exclusively targeted. This leads to cigarette smokers delving into alternative products like e-cigarettes and particularly cigars, which are often seen as a luxury alternative even to premium cigarette brands in spite of the cheap ma- chine-made cigars flooding the local market. What bodes particularly well for China's cigar market is Cigar Ambassador's data that show that while 65% of their Chinese cigar customers in 2012 were former cigarette smokers, the remaining 35% were people who never smoked or had not smoked for 5 years or more. It is also the case that Chinese people have a tra- dition of giving gifts, including cigarettes, to busi- ness associates and government officials, though the latter practise is being officially discouraged. This custom has now become so wide-spread that luxury tobacco products are also increasingly used as gifts for guests, friends, co-workers, partygo- ers and in many other less formal circumstances. With the increase in living standards that has taken place, cigars are starting to increasingly replace cigarettes as presents. In spite of the Chinese gov- ernment's recent efforts to limit smoking in public places, these trends aren't likely to reverse any time soon, as China's appetite for luxury goods contin- ues unabated. Cigar Ambassador * Shanghai-based Cigar Ambassador, which is run by Lily and Edward Jin, was founded in 2005 by a few cigar lovers for whom the word aficionado might have been invented. The founders were originally part of a larger group of people who gathered monthly simply to share their love of cigars. Over the years the group grew and eventually it was felt that there was a need for a platform beyond the monthly gatherings: the aficionados – the amateurs – were turning professional, if you like. So, in 2005, China Ambassador magazine was launched, and the following year, the first Cigar Ambassador shop opened its doors. Today, the group has four cigar shops and clubs in Beijing and Shanghai. But while it has grown its business, the group has had the foresight to realize that its future is bound up with that of China's wider cigar culture. So, over the years, it has helped with the establishment of more than 50 cigar venues across China of one sort or another by providing assistance with, for instance, venue design and staff training.