Sunday, October 15 2006
Trials have begun in the massive cigar counterfeiting
case in Miami, Florida which exploded last December with the seizure of enough materials to potentially float more than one million fake Cuban cigars on the U.S. market.
The defendants in the Federal Court proceedings include Juan Penton, who was charged with six counts of trafficking in counterfeit goods; Miguel Guerra and Filiberto Marimon, who were charged with eight counts of trafficking and one count of conspiracy to traffic, and Hugo Endemano-Portal and Lauro Perez, who were charged with six counts of trafficking and one count of conspiracy.
Altadis U.S.A., which brought the counterfeiting activities to the attention of the Miami-Dade Police Department last year, was heavily involved in the case and at one point offered to assist the police with advance money for "buys" of counterfeit goods, trucking and warehouse space and even payment of police overtime and other manpower expected. The Miami-Dade P.D. did use $17,750 of Altadis U.S.A.'s money for undercover purchases of cigars, of which about $4,000 was returned. And Altadis U.S.A. did help with transportation and storage of evidence.
It underscores the depth of efforts that Altadis U.S.A. has gone to stop sales of fake cigars using brand names for which it holds U.S. trademarks such as H. Upmann, Montecristo, Romeo y Julieta and others. According to Altadis U.S.A. officials, the counterfeit cigars were being passed off as authentic Cuban-made cigars of the same brand names.
One defense attorney has made the claim that since the sales of the counterfeits were of the Cuban-made versions, there is no trademark infringement against Altadis U.S.A. Unfortunately for him and his defendant, Altadis U.S.A. has the sole right to sell cigars under those brand names in the U.S., however packaged, under its trademark registration and a series of court cases dating back to 1969.
Cigar Advisor Editor's Note: Since this report was published, the jury reached a verdict in the Penton case. For the outcome of that trial, click here.
Meanwhile, Altadis, S.A., the French-Spanish tobacco conglomerate reported to investors that it foresees steady growth of 4-6% per year in the cigar sector. Already the world's leading cigar-sales company with 25% of the worldwide market, Altadis not only has a leading role in the U.S. market with its subsidiary Altadis U.S.A., but also a half-ownership in Habanos, S.A., the Cuban cigar distribution company.
Cigars are quite profitable for Altadis, with margins averaging 28.7% for last year. But of its $1.11 billion (U.S., converted from Euro) in cigar sales worldwide last year, only 28% came from premium, handmade cigars (about $248 million, converted from Euro). The majority (72%) came from machine-made and small cigars!
Don't be surprised when you see Montecristo cigarettes coming to a shop in Europe in the coming months. Altadis, which owns brands such as Fortuna (Spain), Balkan Star (Russia) and Gauloises (France), will introduce Montecristo in three styles in the super-premium category.
Short fillers: Another half-smoked Winston Churchill cigar was up at auction in England last month, but the stub of a cigar he smoked in 1953 drew no bids despite heavy pre-sale publicity. It sold afterwards to an individual collector for £80 or about $150 U.S. . . . With the start of the NHL season and the coming of the NBA season, the only in-arena smoking lounge in the U.S. may be the newly-refurbished Grand Reserve Club at Staples Center in Los Angeles. It seats 40 at one time, has a special menu, lots of flat-screen televisions and has a limited membership. One catch: you have to be a ticket holder in order to access the Club, on Suite Level A at Staples Center, home of the NHL Kings, NBA Lakers and Clippers and WNBA Sparks, among others . . . find our latest tasting review, of Ernesto Perez-Carrillo's La Gloria Cubana line, in our News & Views archives.
- Rich Perelman in Los Angeles
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Heard in the Humidor is a publication of Perelman, Pioneer & Company. Reprinted by permission.
Copyright 2006; All rights reserved.
