Los Angeles – Tobacco distributor Lignum-2 was acquired on May 20 by Britain’s Imperial Tobacco for $22 million U.S. Based in San Leandro, California, Lignum-2 is a long-time player in both cigarettes and cigars, but Imperial’s interest was in the former, as noted in its comment on the acquisition in its half-year financial report:

"The company’s main brand is Rave which is positioned in the deep discount sector and sold as cigarettes and fine cut tobacco, with 3.4 percent of the fine cut tobacco market [in the U.S.]."

On the cigar side, Lignum-2 is best known for its Troya lines, an old Cuban brand which is still in production in Havana as a minor, machine-made line. In the U.S., Lignum-2 distributes three lines of Troya: the original Troya, introduced in 1985 as a high-quality Dominican-made cigar, re-blended in 2004 for a mild body; Troya Clasico, a medium-to-full-bodied blend introduced in 2007 and made by Pepin Garcia at his Tabacalera Cubana factory in Nicaragua (it’s a solid seller), and Troya X-Tra, also made in Nicaragua but introduced in 2004, Corojo wrapper and a full-bodied presence.

In addition, Lignum-2 offers Chairman’s Choice, a three-size brand from Honduras and owns the trademarks to two other brands, Adante and Legacy, neither of which is being sold at present.

The acquisition of Lignum-2 also increases Imperial’s ownership of U.S. trademarks for Cuban-made cigar brands to 11; the other 10 are all a part of Altadis U.S.A. or its affiliates: Cabanas, Gispert, H. Upmann, Juan Lopez, Montecristo, Por Larranaga, Quintero y Hermano, Romeo y Julieta, Saint Luis Rey and Trinidad.

>> Imperial’s half-year earnings release also included the first-quarter report from Altadis as a division of Imperial from January 25-March 31 for 2008.

Altadis’ cigar sales (net of tobacco taxes) totaled $226.46 million U.S. (converted from British pounds) for the 67-day period, pretty close to the 2007 full-quarter sales of $254.3 million (converted from Euro). Projecting the period’s sales for the full quarter and the Altadis cigar division increased sales to more than $300 million, which would be an increase even over the strong 2006 figure of $286.8 million.

Profits in the cigar division were $55.1 million (converted from pounds) for the 67-day period, which can be projected to $75.1 million for the full quarter, very close to last year’s $75.7 million first-quarter figure.

Imperial’s commentary, much briefer on cigars than Altadis’ reports, noted that "In the USA, we performed well despite a challenging background of increasing smoking regulations, economic slowdown and a market trend towards smaller cigars. Although our net revenues were impacted by the weakening dollar, excluding this, sales were up by just under 6 per cent in the first quarter.

"We did particularly well in the highly profitable premium and natural wrapper sectors, and initiatives underway since April 2007, including increased promotional activity and new cigarillo product introductions, continue to produce positive results."

Also noted were increased sales by five percent in Spain, a dip in France and "In March, we confirmed that the Habanos joint venture would continue and we will focus on enhancing this key relationship by seeking to grow these prestigious Cuban brands future in mature and development markets." Any questions concerning Cuban government acceptance of the Altadis acquisition by Imperial now appear to be over.

>> A new cigar brand which takes its name from the Spanish Inquisition has debuted in Florida.

"Devil’s Weed" is what some Spanish inquisitors called tobacco when Christopher Columbus returned with it from his first voyage to the New World. Nevertheless, it soon conquered Spain just as it had a hold on the natives met by Columbus’ lieutenant, Rodrigo de Jerez, on October 28, 1492.

This new brand is marketed by the Molina Cigar Co. of Pensacola, Florida and is not as fierce as the name suggests. Made in the Dominican Republic in a five-year-old boutique facility known as La Fabrica Don Leoncio, it’s mild-to-medium in body with an Ecuadorian-grown, Connecticut-seed wrapper and Dominican-grown binder and filler leaves.

Devil’s Weed is offered in six classic sizes: Queen Bess (7 x 48), Raleigh (5 x 50), Colon (5 1/2 x 48 perfecto), Jerez (6 1/4 x 46 torpedo), Nicot (5 5/8 x 46) and 515 (5 1/4 x 48), all in boxes of 25. Suggested retail prices (not including local tobacco taxes) range from $4.99 each for the 515 up to $6.35 for the perfecto-shaped Colon (made by just two rollers by the way, each producing not more than 75 cigars per day).

>> Short fillers: Find our latest tasting review, of four blends from the Carlos Torano empire, in our News & Views archives for May 23.

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Heard in the Humidor is a publication of Perelman, Pioneer & Company of Los Angeles, California, USA. Copyright 2007; All rights reserved.