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UNDER
THE WRAPPER
Informed information about Cuban Cigars
January 2002 Issue #5
wrapper@ajaxcigars.com
Welcome
to Issue #5 of
UNDER THE WRAPPER
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IN THIS ISSUE
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=> Welcome
=> Feature Article - Counterfeit Cuban Cigars
=> Spotlight - Our Newsletter Special
=> Reader Feedback Invited
=> How to Be Featured as our Guest Columnist
=> Subscribe/Unsubscribe information
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WELCOME
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Prospero
Ano Nuevo!
In
this issue of Under The Wrapper I have decided to devote the
entire newsletter to the subject of Counterfeiting. There
is a
lot of ground to cover. I have scoured the internet and found
several good articles on the subject which I have used for
some
of my source material as well as drawing from my own personal
experience and sources and information. This is by no means
the
definitive work on the subject and in fact the information
changes
almost daily as new scams and techniques are developed by
the
counterfeiters.
I hope you find the material both informative and entertaining.
As always I invite your comments.
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FEATURE ARTICLE - COUNTERFEIT CUBAN CIGARS
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The
undeniable fact is that most "Cuban Cigars" that
Americans
smoke, are not Havanas at all. It has been estimated that
up to
90% of all "Habanos" sold to Americans worldwide
are out and out
fakes - counterfeit to the core. Its as easy as taking candy
from
a baby since most Americans have never seen, much less smoked,
a
legitimate box of Cuban Cigars. During my travels throughout
your
wonderful country I have never been offered a "Cuban"
cigar in a
Bar, Club or Restaurant that was legit. Countless times I
have seen
customers forking out $30-40 and herfing away on a "Cohiba
Esplendido", when, from 10 feet away, you can tell from
that pure
white ash that it's not a real Cuban.
While it's possible to buy Cuban Cigars in countries such
as Canada
and Mexico and then resell them in America, there is a minimal
profit
in buying a box say for $325.00 and reselling it for $400.
Tobacco
taxes usually nullify this third-country concept. Factor into
the
equation the risk of losing the cigars to customs, and it
becomes
clear that reselling real Cuban cigars bought abroad doesn't
make much
business sense.
Smugglers are only interested in making money and the preferred
method
is to buy boxes of counterfeit cigars for $25-50 and then
resell them
in the States for $400. Or another popular method done from
within the
US is to take bundled non-cuban cigars slap on a counterfeit
label,
box them up and sell them as the real deal. With the advent
of the
graphic computer, color laser printers and photocopiers -
it's not
that hard to do. I spoke with a guy from Florida who does
just that
and he told me that his cost per box was between $25-40 depending
on
the size of the cigar.
The potential profit from selling fake Cuban Cigars is immense,
and
don't think for a second that the less honorable in society
don't
take advantage of this fact.
So how do you keep the lowlifes from lining their pockets
with your
hard earned money? Here are some tips that may save you a
few bucks.
RESTAURANTS
AND BARS
Lets
do the easy one first. Your out for dinner or a few pops in
a
cigar friendly bar or restaurant. You ask your server if they
have
any Cuban Cigars (nudge, nudge, wink, wink) Now normally you
don't
carry a jewelers lope with you to examine the label so what
do you
do. Two things usually solve the problem quickly.
1)
Look at the cap wrapper. Cuban cigars are finished in such
a way
that the cap wrapper has 3 individual layers that you can
easily
see. No three layers - garbage.
2)
Scope the room. If you see others smoking cigars that are
said
to be Cuban, look at the ash on the cigar. Now if you've been
paying attention, I covered this one already. Cuban cigars
have
a distinctive ash color. Its a darker grey than most non-cubans
which tend to lean towards an almost white ash.
If
any one of these two don't fit, keep your money in your pocket.
My general rule is to forget it in this situation but hey
its good
information to know and an easy way to win a bet. Amaze and
mystify
your friends.
Have them put 4 non- Cubans and 1 Cuban in a row - no labels
and you
can pick the Cuban every time. Now the cap wrapper thing doesn't
work
with Torpedos - the end is wrapped different. Also Trinidads,
Cohiba
Corona Especiales and Cohibas Lanceros have a pig tail finish
on the
end of the cap wrapper.
CIGAR
SHOPPING IN A FOREIGN LAND
Everyone
has a story of a friend "smuggling" cigars back
from Mexico
or some exotic Caribbean nation (it just doesn't sound as
cool if its
from Canada). So your going on a well deserved vacation or
you want
to make the best of that business trip and buy some Cubans.
Now before you step into a shop with a big "M" in
the middle of your
forehead lets get you well prepared.
First
a few shopping rules.
If
It Seems To Good To Be True .... It Is.
Look
its going to cost you. You are looking to spend anywhere from
$100 - 500 per box depending on the cigar. Tales of Genuine
Cohibas
at $60 per box are just that. They don't exist anywhere, period,
end
of story. Anyone tells you that - take pleasure in telling'
them to
stick it where the sun don't shine.
If
You Can't Spot The Sucker .... The Sucker Is You.
In
my shop a great many of our American customers can't tell
the
difference between a Cuban and a Swisher Sweet. We always
give a
little tour through the humidor and explain the different
cigars,
and strengths. Try and buy from a Tobacconist and look for
an
authorized Habanos Sticker in the shop window. If your an
authorized dealer you are spot checked on a regular basis
and a
thorough investigation is done before the authorization is
awarded.
Avoid the small gift shops and corner stores - fakes abound.
Do a little research before hand and ask lots of questions.
Know your labels. A good collection of fake labels can be
seen on
the Cigar Aficionado site. And when you finally decide to
make a
purchase make sure that you are buying a cigar that suits
you.
By that I mean mild, medium, full bodied. Ask the Tobacconist
and
if you don't like the answers walk. The most important aspect
of your
shopping adventure is to find a shop where you are comfortable
and
have some trust in the humidor steward.
The
Hand Is Quicker Than The Eye
I
must confess that I got caught on this one myself. It's the
old
bait and switch. I picked a box of Montecristo #2 and took
it to the
counter to pay. The sweet young girl behind the counter took
the box
and switched it for a box of bogies while I was distracted.
Slick
and smooth and when I finally noticed - to late.
So
now that you have your game plan laid out lets get down to
some
details.
What
your looking for in a box of Cuban Cigars is an overall feel
that its correct. The reason I say that is because even in
real boxes
of Cubans I have seen mistakes. I remember that for a while
the
machine that cuts the half moon on the cedar separator sheet
that
goes between the two layers of cigars was broken. Yes you
heard
right only one machine. What are they going to do, shut down
the
entire production waiting for a new part? Therefore they had
some
guy cutting a diagonal instead of the half moon by hand. Not
a thing
wrong with the cigars. But there you go. I have also seen
the odd
date stamp missing on the bottom of the box. You see most
of the
functions are done by hand and therefore mistakes happen.
Inspecting
The Exterior Of The Box
Check
for the Warranty Seal. The Cuban tax/ seal stamp is
applied to all boxes of Cuban Cigars. In early 2000 an updated
Warranty seal started to appear. The new seal is on all the
boxes since 2000. So if the box was made before 2000, old
seal,
after 2000, new seal. The major differences between the two
seals is
easily seen.
The new seal has a set of serial numbers in red lettering.
Also the new seal has only 5 field workers in the little oval
picture. The old seal has no serial numbers and there are
nine field
workers in the oval picture.
Typically the seal is attached to the front left edge of
dressed boxes wrapping top to bottom with the first fold falling
within the oval coat of arms crest.
The Habanos Chevron will be on the upper right corner of dress
boxes.
On Cabinet boxes the Warranty seal and the Habanos Chevron
are placed on the sliding lid. The only way you can slide
open the
lid is by breaking the seals. I've seen them placed on the
lid in all
manner of locations therefore placement is not a factor.
On the bottom of the box there are three hallmarks or logos.
Habanos s.a. - the s.a. is in small letters not capitalized
HECHO EN CUBA - all capitalized encircled by a straight sided
oval
Totalmente a mano - written in script
The first two logos appear on all boxes of Cuban cigars and
the third
appears on all boxes of totally hand made Cuban Cigars. If
you are
buying a box that is pro-ported to be totally hand made it
must have
the 'Totalmente a mano' logo on the bottom. All of the logos
are
burned into the bottom of the box - not stamped with an ink
stamp.
You can feel the depth by running your finger over it.
Also on the bottom of the box you will find the factory and
date stamp. They are coded. The codes are available at Cigar
Nexus.
The NIVELACUSO and NETAGIDOCU codes are no longer used and
you will
see them only on boxes that bear the old Warranty seal. If
your box
bears the new Warranty seal then you will see the new code
which shows
the factory of production in a three letter code and underneath
that
the date code which comprises a three letter date for the
month (in
Spanish) followed by two numbers for the year. This is stamped
on
with an ink stamp.
Familiarize yourself with the different type of packaging
in
which Cuban Cigars are available. Various brands and sizes
are
packaged in certain styles of boxes. These include dress boxes,
polished boxes, varnished and unvarnished cabinets, semi boite
natural boxes, sliding lid boxes (SLB'S) commonly referred
to as
cabinet boxes and transit packs. The list is huge.
Finally, depending on where the box was distributed will
determine some other common box labels and stamps that are
present.
Canada Boxes from Canada currently have a Havana House sticker
applied to them. The older ones are green and white and
the newer ones are purple and white. There is no special
place on the box where they attached but you can't open
the box without breaking the seal. If you try and peel off
the seal it displays the repeating watermark VOID.
Also we have the lovely health stickers on our boxes.
Spain Boxes from Spain have the "Ministerio de Economia
y
Haceienda Espana" green/ blue seal on the right front
edge
of the box.
England Boxes from England have the Hunter and Frankau English
Market Selection "EMS" sticker on the top left corner
of
the box.
Holland Boxes from the Netherlands have a small beige "Sigaren"
seal applied to the right front edge of the box.
Germany These boxes feature the official German importer,
5th
Avenue Cigars, labeled on the bottom. The German tax
stamp also indicates the price per box and per cigar.
Australia The Aussie's have a simple white and blue Alexander
Group
importer stamp on the bottom front edge of the box plus
a dyed stamp AG serial number on the bottom of the box.
I
know that this seems like a lot of things to remember but
it
really isn't. It just looks that way when its written down.
Good
luck and I hope you find what your looking for. One last point
to
cover. Don't be surprised if you can't find the specific cigar
your
looking for. Its a supply and demand game and some of the
more
popular cigars are difficult to find. So I would suggest you
have
more than one item on your wish list.
CIGAR SHOPPING ON THE INTERNET
I
realize that there are hundreds of internet sites selling
Cuban
cigars out there. The vast majority are run by small hard
working
entrepreneurs. Its the minority who give a bad name to the
rest
of us. Its a hurdle that we are faced with on a daily basis.
Who knows how many potential customers are lost because of
insecurity.
You do not have to be a cigar detective in order to reduce
your
exposure to fake Cuban cigars. Your efforts are best directed
to
finding and honest and reliable supplier. Also its impossible
to
utilize any of the procedures outlined above, regarding examining
the box, when buying on the internet! So I figured the best
way to
approach this was to tell you what I would do if I was going
to buy
Cuban cigars on the internet. First and foremost I would go
to
www.ajaxcigars.com (hey I have to get a plug in now and then)
Here
are a few tips to help you in your quest.
Lets
say you have decided to buy from your neighbor and largest
trading partner - Canada.
The
first thing I would do is a search and pull up say 10 sites.
Visit them all and look at their polices regarding price,
shipping,
methods of payment etc. Pick any cigar - say Bolivar Gigantes.
Now write down all the prices in US dollars for that box of
Churchills. I checked out 20. Most prices fell within $485
- 589
per box. The two lowest prices were $285 and $300.
Tell you anything?
PRICES
Lets
say you wanted to buy a brand new Chevy. Gm sets up a wholesaler
in each country where they operate and the dealers buy from
the
wholesaler. Its the same in the Cuban cigar business. In Canada
the sole supplier of Cuban Cigars is Havana House. They set
the
wholesale price on Cuban cigars. Ours like any other is a
competitive
business and you will see a range of prices between sites.
But I
can tell you for a fact that the sites selling for $285 and
$300 are
selling the cigars below wholesale cost!!
Remember Rule #1 If It Seems To Good To Be True .... It Is
START
SMALL AND BUILD YOUR RELATIONSHIP
Once
you have decided to place an order. Start small. Build your
relationship. Discuss your requirement, likes and dislikes
of non
Cuban cigars or Cuban cigars you have tried. Order a sample
pack
which should include a range of both strengths and sizes.
By doing
this you get to find a cigar you like and test the quality
of the
product. The only way I would buy a full box, right off, is
if I
know my cigars and had been referred to the site by a friend
who
was satisfied. Your supplier should work hard to earn your
trust
and to keep it. Remember your the boss.
CREDIT
CARDS
This
is an excellent line of defense for the consumer. If you don't
get your order you can always dispute the credit card transaction
and
get a refund. Credit card rules are heavily favored toward
the
cardholder not the merchant. I have noticed that some of the
sites
that sell counterfeits insist on payment by money order.
Hmmm I wonder why?
Well to close the issue on counterfeiting I thought that it
would
be interesting to relay to you how the counterfeit trade works
inside
Cuba.
AN
INSIDE LOOK AT THE CUBAN COUNTERFEIT TRADE
Cuba's
present economic hardship has its people searching
endless new ways of making money. In the old days when
counterfeiting existed on a very small scale, it was
considered merely a "gentleman's offense". Today
however
the Habanos counterfeiting business is in full bloom.
This article will take you from the acquiring of the raw
tobacco to smoking in capitalism's fine salons.
First meet Jose who used to live in Pinar del Rio on a
Finca (farm) about 15 klick's from San Juan y Martinez. Mucho
trabajo y poco dinero or "much work for no money".
Jose didn't want
anymore so he moved from the Vuelta Abajo to the "city
of capitalism"
Havana. With an old Chevy pickup truck we head to Pinar del
Rio to
buy tobacco. After three hours we arrive in San Juan y Martinez.
Many Vegueros throughout Cuba hold back some tobacco for the
black
market, where they can get up to ten times the price paid
by the
state. First stop, nada. Now its off to San Luis, 20 minutes
away.
It is a poor region. Most of the Vegueros here own little
plantations
and anyone earning more than $100 per month is considered
rich.
The Vegueros leads us to the Casa del Tobaco. On the racks
are
thousands of leaves that look like hundreds of bats hanging
around.
In one corner are bales of tobacco that have been rolled in
palm
leaves. The tobacco is still light in color which means that
the
fermentation is not yet finished. Jose wants tobacco for 5000
cigars
and talks with the Vegueros about price. The deal is set at
filler
for $2.50 per kilo and a sheaf of wrapper, which contains
about
100 leaves for $4.00. Total cost $500.00 a small fortune in
Pinar
del Rio. Fully loaded we head back to Havana. Jose is sweating
and
is afraid of getting caught by the police. He hasn't been
in the
business very long.
The tobacco is stored in Nuevo Vedado, a section of Havana
where we meet Benito. He's a car mechanic with his own shop
- which
hides other things. Jose's tobacco will rest here for a few
days
before being distributed and processed further. He explains
that
this tobacco is reserved for an American (we'll meet George
later)
living in the Bahamas who has ordered 50 boxes of Partagas
Lusitanias,
50 Punch Double Corona,50 Hoyo de Monterrey Double Coronas
and 50
Cohiba Esplendidos. The American wants only the best quality
and is
willing to pay for it.
We spoke with another counterfeiter who buys his tobacco from
some of the worst regions, where tobacco for cigarettes and
other
tobacco products are grown, and sold only for domestic consumption.
The leaves are small and the fermentation shorter. This is
where the
smaller counterfeit organizations buy their tobacco.
Behind innumerable streets and corners where extremely poor
people live, we wind our way through the dark passageways,
staircases and doors of an old colonial place. Everything
is worn
and run down. Collapsed walls, a strong stench and begging
children.
Its like a garbage dump. In a small room sits a young boy
and an old
woman who can barely walk. She receives a monthly government
pension
of $2.00, an amount impossible to survive on. She learned
from a
neighbor how to roll cigars. The boy and the lady are rolling
"Churchill" style - maybe a future Cohiba Esplendido,
they don't
know. We test the quality of some of these cigars. Poorly
proportioned with both hard and weak spots. The cigars are
not cut
at the right length as this will be done later at the finishing
workshops. The cigars are like the garbage dump, partly rotten
and moldy. These people work day after day without a break.
One worker can make approximately 200 cigars per day. A man
enters
the room and requests unfinished cigars for 10 boxes of Cohiba's.
He is surprised by our presence but we persuade him to take
us to the
guy who makes the boxes.
In the back yard of Eduardo's house is a small workshop.
In between half built chairs and cabinets are vast amounts
of
cigar boxes. One worker puts the boxes together. In a corner
stands a hand press that imprints the brand labels on boxes.
The
stamps are either stolen or counterfeited by specialists.
"With
furniture you can make money" he complains. "The
Cubans are too poor
to buy such things." "We have to improvise but in
this way the
Cubans are world champions."
The next day we visit a Cuban in Centro Habana. His workshop
is his living room. Cigar bands, quality seals and other materials
are
everywhere. One one table are a lot of empty boxes. He puts
the
bands on the cigars and cuts them to length. He has them spread
across the sofa in piles of "good quality" and "bad
quality". When he
packs them in the boxes he makes sure the poorest are on the
bottom.
He tells us that he doe not sell the cigars to the tourists
- this is
done by the Jineteros or street hustlers. He told that he
spent a
year in jail when he was caught by the police with 10 boxes
of
counterfeits. The next time would mean several years - so
he leaves
it up to the Jineteros. He puts the tax / seal stamp and Habanos
label inside the box. He will attach the labels to the box
only
if the customer requests it.
The counterfeiting organizations work in small groups and
co-operate closely with each other. Their methods are simple:
at
the doors and in the immediate area of the cigar store and
factories,
stand the Jineteros offering reduced prices. From all sides,
they
try to persuade you not to buy in the shops. They always tell
the
same story - right from the counterfeiters manual. They have
a
brother, sister, cousin, uncle, aunt or nephew who works in
the factory
and brings them out for them. If this were true then the entire
production of the Partagas Factory would disappear on the
black
market - every day! Everything is the same, the brands and
the sales
pitch. The quality and the price however vary. The main counterfeit
cigars are the larger sizes and bear well-known labels. The
most
fraudulent of all are the Cohiba and Montecristo. Other brands
can be
delivered as well, without delay.
Now most would think that this is just an internal problem
within Cuba. Well here is where it gets interesting.
Every year thousand of tourists go to Cuba to buy the
Falsificaciones. Many of them do it intentionally, like Dieter
who
is an aficionado from Stuttgart. Twice a year he flies to
Cuba to
buy cigars in the official shops. He buys ten boxes for his
own
enjoyment. Another 10 boxes he buys on the black market for
$30
a piece. He in turns sells these in Germany at half the going
market price. With his earnings from the sale of the black
market
cigars he finances his personal cigar purchases. The black
market
cigars must be sold quickly because they have not undergone
disinfection like those in the factories. Therefore, within
a
short period of time the tobacco beetle is hard at work.
Hans, a dutchman living in Cuba, tells us that, for the
past three years, he has made his living from cigar smuggling.
Five to six times a year he flies to Amsterdam with 100 boxes
of
counterfeits in his luggage. We ask him to tell explain to
us how
he takes such large amounts out of Cuba without detection.
He says
that he knows "people" at the airport and pays them
$10.00 per box -
no questions asked. Then Hans offers us the opportunity to
join
him in business because, by the way, he is short of money.
He
shows us a business card and then laughs. It is card from
a well
known cigar shop in Amsterdam with subsidiaries all over the
Netherlands. Every time he goes to Amsterdam he claims he
sells
them all his cigars at Dfl 500 per box. "Its quick money"
he says.
George (he's the guy that Jose bought all the tobacco for)
lives in Tampa Florida but is a citizen of the Bahamas. He
owns a
yacht which he rents to tourists who want to go deep sea fishing.
On one of his charter trips to Cuba several years ago, George
got
the idea to smuggle cigars when he saw his passengers bringing
vast
amounts with them. Soon after, he once again sailed to Cuba
and
contacted counterfeiters. At first he brought only a few,
now
George smuggles around 2000 boxes a year to the states.
The cigars are loaded into Georges yacht and in a flash the
boat is
cleared for departure and heads for the Bahamas. He remains
there
for a few days and then travels under the American flag to
Miami.
In Miami a distributor pay $250 per box and the cigars leave
Miami
for fine cigar shops, restaurants, bar and clubs - from New
York
to Los Angles.
Tom and his buddy ordered 1000 cigars from a Torcedor
(roller). He pays the Torcedor a $1000. "Good quality
that we would
smoke as well" he says. Then a counterfeiter provides
the bands for
$60. They fly back to the US via the Dominican Republic. One
has
the cigars in his luggage the other has the bands in his.
In the USA
they declare the cigars as ' Dominican Seconds' and pay a
small duty.
Once back in Palm Springs they put the bands on the cigars
and fill
boxes that we keep on hand. They offer them under the table
at
in their smoking lounge. "For one Cohiba Robusto we get
$40. They
sell like hot cakes" he said.
In
the state owned media, tightening the black market
activities is constantly talked about. On the street,
however, it's a different story. On every corner, you
are offered cigars. It seems each household is selling
cigars. The police turn a blind eye. When we asked
the police why nothing is being done to stop this - we
are told that most of Havana would be in jail if action
were taken.
*-----------------HOT TIP------------------*
Don't forget to rotate your cigars in your
desk top humidors.
*-----------------HOT TIP------------------*
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SPOTLIGHT: THIS MONTHS NEWLETTER SPECIAL
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This section is devoted to specials for e-mail subscribers
to
UNDER THE WRAPPER.
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Your interaction will help make the newsletter work.
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Copyright 2001 Ajax Cigars
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