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[INDUSTRY NEWS]
Altria Group, Inc. agrees to acquire UST
In a move to broaden its position in the tobacco industry and to diversify revenues and operating income, Altria Group, Inc. announced on Sept. 8 that it entered into a definitive agreement with U.S. Smokeless Tobacco Company (UST) to acquire all outstanding shares of UST, the world’s leading moist smokeless tobacco manufacturer. This acquisition creates a total tobacco platform with premium tobacco brands that include Marlboro, Copenhagen, Skoal and Black & Mild.
“The combination of Altria and UST creates the premier tobacco company in the United States with leading brands in cigarettes, smokeless tobacco and machine-made large cigars,” said Altria Chairman and Chief Executive Officer Michael E. Szymanczyk. “This transaction is consistent with our growth strategy of making disciplined investments in adjacent categories. UST provides Altria with the leading premium brands, Copenhagen and Skoal, in the highly profitable moist category. We will also acquire Ste. Michelle Wine Estates, a premium wine business, as part of the transaction.”
The transaction is subject to UST shareholder approval and customary regulatory approvals, which Altria said would be pursued promptly. A copy of the agreement containing all the terms of the transaction was filed on Sept.8 with the U.S. Securities and Exchange Commission.
Under the terms of the agreement, UST will become a wholly owned subsidiary of Altria. Following the completion of the transaction, Murray S. Kessler will be named vice chairman of Altria, reporting directly to Szymanczyk, and will oversee the integration. “I look forward to working closely with Mike and his management team to integrate our outstanding brands and employees into the Altria organization,” Kessler said.
“We are pleased that Murray has agreed to stay on board during the integration period to help complete the transition,” Szymanczyk said. “U.S. Smokeless Tobacco Company is the leading and most profitable moist smokeless producer and marketer due to the efforts of Murray, his management team and employees. They have a deep understanding of the growing smokeless tobacco category. It is my pleasure to welcome UST’s talented employees to the Altria family of companies.”
Given the steady and projected decline of cigarette sales and the annual 7 percent growth rate of smokeless over the last four years, a Sept. 8 story in The New York Times noted that the move makes sense to industry analysts. Also, given the trend toward lower-tier tobacco products, the Times noted that Altria’s strength in marketing and distribution will undoubtedly help UST fight off increased competition. Altria’s acquisition of UST follows the acquisition of Conwood, second to UST in the smokeless category, by Reynolds American in 2006. TR
Kretek International purchases Tobacco Plus Conference & Exposition
Kretek International, Inc. announced in early August that it had acquired the assets of Tobacco Outlet Business LLC, a North Carolina company, which includes Tobacco Outlet Business Magazine, published six times a year, and Tobacco Plus Conference & Exposition.
Tobacco Plus Expo is an international trade show for the tobacco industry that is held annually in the United States. This important tobacco industry forum brings together manufacturers, wholesalers and retailers from the United States and abroad to meet and discuss tobacco industry issues, opportunities, products and build industry relationships.
Next year’s expo will be held May 6-7 at the New Orleans Convention Center in Louisiana. Show management of the 2009 event will continue to be handled by Reuter Exposition Services, LLC located in Branford, Conn.
Established in 1983, Kretek International, Inc. is a privately held company headquartered in Moorpark, Calif. The company is best known for the manufacture and distribution of clove cigarettes and a full range of tobacco and tobacco accessory products. TR
Tobacco industry loses a leader
Timothy Mann, the former President
of Swisher International, Inc., died on July 28 in Jacksonville, Fla., after a long illness. He was 66 years old and lived in Orange Park, Fla. A New Jersey native, he received a bachelor’s degree in business administration from Monmouth College in 1965, now Monmouth University, and later served as a long-time member of the university’s board of trustees.
After college, Mann joined the marketing department of The American Tobacco Company in Richmond, Va., to begin a distinguished 39-year career in the tobacco business. In 1970, he left American Tobacco to become an account supervisor at Cargill, Wilson & Acree, also in Richmond, before joining the Liggett Group in 1974.
In 1978, Mr. Mann left Liggett to join Jno. H. Swisher & Son, Inc., which was renamed Swisher International in 1992 and is now the largest manufacturer of cigars (by volume) in the United States. Starting as director of business development, he was subsequently promoted to vice president of marketing and senior vice president of marketing and sales before being elected Swisher’s president in 1986 and joining its board of directors in the same year.
During his 30 years at Swisher International, Mann not only worked to expand Swisher’s export business, traveling to more than 25 foreign countries in the process, but also took an active role in the cigar industry as a whole. He served as chairman of the board of the Cigar Association of America and on the boards of the Tobacco Merchants Association and the Smokeless Tobacco Council. The esteem in which he was held by the industry was evidenced by his receiving such honors as being named “Giant of the Industry” by the Tobacco Merchants Association, and “Dean of the Industry” by the American Wholesale Marketer’s Association.
In addition to his industry leadership, Mann provided substantial contributions to numerous civic, business and educational institutions in his adopted community and served on many boards. He was honored to be awarded the coveted Good Scout Award by the New York Council of the Boy Scouts of America, the National Brotherhood Award by the National Conference for Community and Justice, the National Humanitarian Award by the American Jewish Committee, and the Community Champion award by Gateway Community Services, Inc.
Mann is survived by his wife Margaret Ann; his three sons, Timothy Mann, Jr., Sean Mann and Devlin Mann; by two stepchildren, William Tyrie and Lisa Tyrie; by nine grandchildren, and by his brother Conklin and his sister Jennifer. TR
Cigar enthusiasts unite with Cigar Rights of America
Driven by increasing calls from cigar connoisseurs and enthusiasts, a consortium of cigar manufacturers and premium cigar retailers have formed Cigar Rights of America (CRA), a nonprofit organization formed to give cigar lovers across the United States a voice in the rising debate over cigar smoking rights for those who enjoy cigars for pleasure.
CRA is a membership organization dedicated to maintaining the personal freedom of individuals to enjoy cigars. Its activities are focused on education about handmade premium cigars, as well as opposing unfair legislation such as excessive state and federal cigar taxes, overly restrictive smoking bans, cigar sales restrictions and FDA regulation of cigars.
According to the group, published estimates show that approximately three to four million Americans regularly smoke premium, hand-rolled cigars. For many, a good cigar is a form of relaxation and many cigar enthusiasts consider themselves to be connoisseurs, similar to wine experts, they say. CRA membership believes the increasing number of anti-smoking measures—like proposed federal cigar tax increases of up to 6,000 percent and giving apartment property owners the right to tell renters they cannot smoke in their own homes—are encroaching on a personal freedom and the right to enjoy cigars.
The CRA launched a major membership drive on Aug. 19, “Freedom Tour 2008,” that kicked off with stops and rallies in five cites: New York City, Minneapolis, Milwaukee, Chicago and Orlando. Each stop included legendary cigar makers and experts who talked about the art of producing handmade cigars, encouraged membership and spoke about the crucial role CRA members can play in balancing the debate between anti-cigar advocates and those who enjoy cigars for pleasure. For most of these cigar makers, their companies are family-owned, small businesses, and producing handmade cigars has been their passion and family tradition.
Cigar enthusiasts and others who are interested in preserving freedom of choice can join Cigar Rights of America online at www.cigarrights.org/membership.htm. TR
CigarTower.com launches enhanced international online cigar community
During this year’s International Premium Cigar & Pipe Retailers show, CigarTower.com launched its revitalized social networking Web site for cigar smokers and businesses. The site www.cigartower.com works like MySpace or Facebook, but its feature set has been designed especially for cigar smokers and the cigar industry, creating a new opportunity for cigar retailers to connect and create a personal network with their existing and potential customers.
The intention of the new site is to strengthen the community-building aspect and to integrate the cigar businesses as a part of the network. The whole site was transformed into a social networking site, where not only cigar smokers and businesses can have their own profile, but the cigars also.
“We had a lot of positive feedback from the retailers at show,” said Project Manager Peter Agardi.
The international social networking Web site’s goals are to build the largest cigar community Web site for cigar smokers and businesses, to maintain the largest and most accurate cigar ratings database available, and to provide the latest cigar news to cigar aficionados worldwide. It has advantages for both cigar smokers and cigar-related businesses.
CigarTower is a cigar company located in Hungary, and is divided into three main sections. The first is the retail section, a high-end cigar shop located in the city center of Budapest, on the corner of the luxury hotel Kempinski. It was the first cigar shop in Hungary when it opened 10 years ago and has been the leading one ever since. The second section serves other cigar retail shops, hotels, restaurants and cafés with quality Cuban and non-Cuban cigars through its national distribution network. The third section handles all the CigarTower Web sites. Its job is to create and manage innovative software and Web solutions for the cigar world, on an international level.
For more information or to join the online community, visit www.cigartower.com. TR
Miami Cigar captures Brun del Ré
Brun del Ré founder and owner Carlo Corazza and Miami Cigar & Company Director Nestor Miranda met in Costa Rica some months ago, with conversations between them ongoing ever since. In mid-August, on a three-day trip from Costa Rica to Miami, Corazza met with Miranda and Miami National Sales Manager Rene J. Castaneda to finalize a distribution agreement between the two companies.
Brun del Ré is a result of Corazza’s fondness for cigars and his desire to produce a world-class, premium handmade cigar utilizing a Costa Rican wrapper. The cigars are presently distributed in Europe and Asia.
Brun del Ré is produced in three distinct lines—Premium, Gold and Colonial—and four sizes: corona (6 x 44), robusto (5 x 50), torpedo (6 x 54) and Churchill (7 x 48).
Brun del Ré Premium is produced using Nicaraguan fillers and binders and Ecuadorian Connecticut wrapper. With a sweet flavor and sumptuous aroma, this smooth smoking cigar has become a favorite of those seeking to first experience cigars. Gold’s blend, also with an Ecuadorian Connecticut wrapper, appeals to more experienced smokers and smokes with complexity and nuance. Colonial is the pièce de résistance of the Brun del Ré effort. A blend of Nicaraguan tobaccos in a lush, luxuriant Costa Rican maduro wrapper, this is a full-bodied cigar that will satisfy the most discriminating palate.
Miami Cigar & Company also distributes Don Lion, Don Lion 1989, Don Lion Africa, La Aurora, Leon Jimenez and Decades along with specialty smoker’s accessories. TR
GrillwithBIC.com provides outdoor entertaining expertise
BIC is targeting outdoor entertaining enthusiasts with its new Web site, GrillwithBIC.com. The site provides information on how to entertain outdoors to consumers who enjoy camping or tailgating before the big game with friends and family, or who like to barbecue on a sunny day.
In addition to highlighting BIC’s line of multipurpose lighters and where they are sold, the site offers barbecuing tips and recipes, lists of what to pack for a successful tailgate party and information on how to safely start and extinguish a campfire.
“This new Web site really speaks to many of our consumers,” said Sherri Gasparon, brand manager on lighters with BIC Consumer Products USA. “It offers helpful information for those who enjoy outside entertaining, whether at home, at a campsite or at a sporting event. BIC’s line of multipurpose lighters fits perfectly with all of these.”
BIC is a leading international distributor of stationery products, lighters and shavers in more than 160 countries around the world. For more information, visit www.bicworldusacom. TR
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