avocigar

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If retailers are feeling the heat from tobacco companies, the reasons are pretty clear. Trying to compensate for huge MSA-dictated payments and a steady decline in cigarette consumption--analysts are projecting another 2% drop in 2001--manufacturers have introduced five price hikes in the last two years. As a result, average wholesale prices are up 74% in the $50 billion U.S. tobacco industry. Each price increase opened the door a little wider for discount cigarette brands, whose market share crept up to 3.7% last year, according to the Maxwell Report.With the renewed pricing pressures, even category leader Marlboro is resorting to repeated discounts. "Marlboro never used to be on a reduced price for two months in a row," said one Midwest wholesaler." Now it''s on two months, off one, on two months and off ... I don''t think that hurts the strength of the brand because they can''t advertise like they could before, and the only way to grab market share is with price." Yet there''s an even more intense battle taking place: on the shelves. In the aftermath of the MSA, Philip Morris and RJR have increased cash rewards to retailers who give top shelf placement and prominent signage to their avocigar brands. Contracts often include extra "buydowns," cash manufacturers pay retailers for passing reduced prices on to consumers.

If retailers are feeling the heat from tobacco companies, the reasons are pretty clear. Trying to compensate for huge MSA-dictated payments and a steady decline in cigarette consumption--analysts are projecting another 2% drop in 2001--manufacturers have introduced five price hikes in the last two years. As a result, average wholesale prices are up 74% in the $50 billion U.S. tobacco industry. Each price increase opened the door a little wider for discount cigarette brands, whose market share crept up to 3.7% last year, according to the Maxwell Report.With the renewed pricing pressures, even category leader Marlboro is resorting to repeated discounts. "Marlboro never used to be on a reduced price for two months in a row," said one Midwest wholesaler." Now it''s on two months, off one, on two months and off ... I don''t think that hurts the strength of the brand because they can''t advertise like they could before, and the only way to grab market share is with price." Yet there''s an even more intense battle taking place: on the shelves. In the aftermath of the MSA, Philip Morris and RJR have increased cash rewards to retailers who give top shelf placement and prominent signage to their avocigar brands. Contracts often include extra "buydowns," cash manufacturers pay retailers for passing reduced prices on to consumers.

That night, John and I did the town. We ended up at the Comodoro, a disco run by the Cuban government, teeming with young prostitutes and foreign men. The girls stood at the edge of the dance floor without acknowledging you. They looked like college freshmen, but with a hard, cool expression. I bought a woman named Maria a drink. She talked to me about how the economy will change when Castro dies. "Oh, when is he going to die!" she said. In 10 days in Cuba, it was the most open discussion I had about the future, something everyone there is secretly concerned about.

CLICK HERE to view the selection of the most dependable and reputable cigar and tobacco retailers on the internet! Or talk to one of our very own cigar afficionados and find the perfect assortment of fine tobaccos for your personal collection.